India has proposed extending tax exemptions until 2041 for foreign companies that provide machinery to contract manufacturers, reports Reuters. The draft bill still has to be passed by both houses of parliament.
If the bill passes, it hands a big win to Apple, who has long lobbied against being taxed on the high-end machinery it has in its Indian iPhone assembly plants.
Introduced in February, the exemption previously ran only until 2031.
India has been a key ingredient in Apple’s plan to diversify iPhone manufacturing beyond China, and the South Asian nation is set to produce 26% of the world’s iPhones in 2026, up from 6% just four years ago, according to Counterpoint Research.
As noted by Reuters, Apple had feared that tax laws in India could treat ownership of machinery supplied to its contract manufacturers as so-called “business connection,” exposing its iPhone profits to tax.
The extended tax exemption will apply to manufacturers of mobile phones, tablets, laptops, hearing and wearable electronic devices. India has also exempted from tax foreign companies’ income from storing and providing parts used to manufacture such electronics components to contract manufacturers until 2041.