India is considering extending tax exemptions for manufacturing machinery and component imports for foreign companies involved in iPhone production until 2041. This move aims to further bolster Apple's supply chain diversification outside of China.

A draft proposal, seen by Reuters, would extend a tax exemption initially introduced in February, which was set to expire in 2031. This exemption addresses taxes on iPhone machinery provided by foreign firms to contract manufacturers in India. The proposal also includes exemptions for storing and shipping components intended for export-only hardware, provided they are housed in customs-bonded areas.

These proposed changes, along with existing incentives like import duty cuts on select components, are designed to make India a more attractive hub for producing iPhones destined for international markets. The government is also exploring extending data center tax exemptions, allowing for leasing by Indian partners, which could offer Apple more flexibility.