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Apple is urging the Indian government to revise its income tax law to prevent the company from being taxed for owning high-end iPhone manufacturing equipment provided to its contract partners.
Apple’s request comes amid its ongoing efforts to diversify beyond China, where it currently manufactures most iPhones. Counterpoint Research reports that Apple’s share of the Indian smartphone market has doubled to 8 percent since 2022, while India’s share of global iPhone shipments has jumped from 6 percent to 25 percent in the same period.
Apple’s contract manufacturers, including Foxconn and Tata, have invested billions of dollars in new facilities across India. However, much of that investment involves acquiring expensive machinery for iPhone assembly. Experts warn that Apple could face billions in additional taxes under India’s 1961 Income Tax Act if it continues to own such equipment without legislative changes.
In China, Apple retains ownership of manufacturing machines used by its contractors without incurring taxes. In India, however, such ownership could be classified as a “business connection,” making Apple’s local profits taxable under current rules.
Apple executives have reportedly held discussions with Indian officials over the past few months to seek amendments to the law. The company believes the existing framework could hinder future growth and limit India’s competitiveness in global electronics manufacturing.
One industry source noted that contract manufacturers have limited capital to fund further expansion. “If the legacy law is changed, it will become easier for Apple to scale production and make India more globally competitive,” the source added.
