India’s Union Budget 2026 delivers a game-changing tax exemption for Apple, clearing hurdles for direct equipment funding and accelerating iPhone manufacturing expansion through partners like Foxconn and Tata. This five-year relief until 2030-31 removes profit tax fears on machinery ownership in export zones, positioning India as Apple’s fastest-growing production hub.
Overcoming Key Investment Barriers
Earlier rules risked deeming Apple’s machinery payments a taxable “business connection,” forcing partners to fund billion-dollar setups alone—unlike seamless China operations. Revenue Secretary Arvind Shrivastava confirmed: foreign firms providing capital goods to Indian contract manufacturers in bonded zones face zero tax, enabling swift production ramps.
Apple’s lobbying paid off amid diversification from China, where India now handles one-in-five global iPhones—up from negligible shares—with over $50B exported since FY22. This slashes costs, enhances quality control, and speeds lines for models like iPhone 16 amid PLI scheme momentum.
Economic Ripple Effects
Budget aligns with PM Modi’s electronics vision, drawing giants via INR 40,000 Cr component incentives despite ending smartphone PLIs. Foxconn/Tata’s five factories gain edge, with Apple’s market share doubling to 8% locally and exports quadrupling.
Tax experts hail it as “deal-breaking risk removed,” fueling faster scale-up and investor confidence in India’s manufacturing rise.
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