India is considering extending a tax break for foreign companies supplying machinery to contract manufacturers, potentially pushing the expiration from 2031 to 2041. This exemption shields these companies from Indian income tax solely due to owning equipment used by local contract manufacturers.

The extended tax exemption will cover manufacturers of mobile phones, tablets, laptops, hearing aids, and wearable electronic devices. It applies to facilities in customs-bonded areas, considered outside India's customs territory, making them attractive primarily for exports. Devices sold within India from these facilities will incur import taxes.

This move is a significant advantage for Apple, which actively lobbied for the original tax exemption. It follows recent Indian government decisions to remove import duties on smartphone manufacturing components. Data suggests India's role in iPhone production is rapidly expanding, with projections indicating it will produce 26% of the world's iPhones by 2026, a substantial increase from 6% four years prior.