Apple Inc. (AAPL, Financials) received a major policy boost in India after the government approved a tax exemption allowing foreign companies to supply manufacturing equipment to local contract partners without creating a taxable business connection.
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The new rule, part of India’s 2026 27 federal budget, applies through the 203031 tax year to companies operating within customs bonded areas designated export zones considered outside India’s domestic customs border. The change means Apple can fund high-end iPhone production machinery for its partners such as Foxconn Technology and Tata without incurring local income tax exposure.
Apple had lobbied New Delhi for months to revise the tax framework, arguing that ownership of imported machinery could otherwise be interpreted as taxable business activity.
Analysts say the move could accelerate Apple’s expansion of iPhone manufacturing in India and ease capital costs for its suppliers. India’s finance ministry said the exemption gives certainty to global firms investing in the country’s export manufacturing sector.