As Apple expands its footprint beyond China, the tech giant is now urging New Delhi to update a 1961 income tax law that could saddle it with hefty duties on the advanced machinery it supplies to contract manufacturers for iPhone assembly.
Counterpoint Research reports that iPhone’s share in India’s smartphone market has doubled to 8 percent since 2022. Meanwhile, India’s slice of global iPhone shipments has jumped from 6 percent to 25 percent in the same period, even as China still handles 75 percent of volume.
India is the world’s second largest mobile market, and Apple’s partners Foxconn and Tata have invested billions in five local plants. A major chunk of that investment goes into high-end production equipment—but under current rules, Apple would face new taxes if it keeps ownership of those machines on paper.
Under the Income Tax Act, such ownership creates a ‘business connection’, making Apple’s profits from Indian iPhone sales subject to local taxes. Industry insiders warn that could translate into billions of dollars in extra levies unless the law is amended.
Apple executives have held recent talks with Indian officials to tweak the legislation. ‘Contract manufacturers cannot put up money beyond a point,’ says one source. ‘If the legacy law is changed, it will become easy for Apple to expand … India can become more competitive globally.’
For Apple, a successful push could fast-track its strategy to diversify supply chains and tap into one of the fastest-growing smartphone markets—fueling efficiency, local jobs and India’s rise on the global tech map.
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Apple lobbies India to change tax law seen hindering its expansion
cgtn.com
