The company’s suggested changes could be seen as challenging India’s authority to levy taxes on foreign firms.
India ranks among Apple’s largest markets, and the company has steadily invested in the nation through retail outlets, job creation, direct investments, and more. Despite this, Apple has faced limitations in fully expanding operations due to an older law it is eager to amend.
Apple is seeking modifications to the foreign equipment ownership rules under the 1961 Income Tax Act.
According to an exclusive report by Reuters, Apple is actively engaging with India’s IT and Finance ministries to introduce a tax-free framework for the high-end iPhone machinery it supplies to its contract manufacturers in India.
Apple argues that the current provision on foreign equipment ownership in the 1961 Income Tax Act is hindering its growth plans in India and forcing the company to reconsider its long-term strategy. Analysts also suggest that Apple could face losses amounting to billions in extra taxes if it attempts to restructure operations in India without securing amendments to the Income Tax law.
Reaching a mutual understanding at this stage is essential for both sides. Taiwan-based Foxconn Inc., which is India’s largest iPhone manufacturer, reportedly shipped iPhones worth $7.5 billion (around ₹63,000 crore) by August 2025, surpassing the $7.4 billion shipped in the entire year of 2024.
This demonstrates not only the sheer size of India’s iPhone market but also the growing global significance of “Made in India” iPhones. If Apple chooses to halt operations now, upcoming models, such as the iPhone 18 series, could become prohibitively expensive for Indian buyers.
At present, the Indian government has reportedly not altered its stance. The existing regulations mainly impact Apple, while other companies like Samsung remain unaffected due to their wholly owned manufacturing facilities in India. Therefore, any special concessions for Apple could potentially challenge India’s sovereign right to levy taxes on foreign firms.
