The Indian government announced a policy change in the 2026-27 budget that boosts Apple’s manufacturing ambitions.
Foreign companies, including Apple, may now supply machinery and equipment to contract manufacturers within designated customs-bonded areas. They incur no tax risk on these assets for five years.
Previously, supplying high-end equipment created potential tax liabilities for Apple. This risk stemmed from the equipment being deemed a "business connection," potentially leading to taxes on iPhone sales profits. The prior structure forced manufacturing partners to bear significant capital expenditure.
The new rule removes this financial hurdle and remains effective until the 2030-31 tax year. The policy is expected to accelerate the scaling of electronics manufacturing in India. This change follows Apple's lobbying efforts to de-risk its manufacturing presence outside of China.