India's Major Tax Exemption On Foreign-Funded Equipment For Contract Manufacturers—Win For Apple?

In a potential win for Apple Inc. (NASDAQ:AAPL), the Indian government has granted a major tax exemption, which will allow foreign companies to supply machinery to their contract manufacturers in certain areas for five years without any tax liability.

India Exempts Foreign-Owned Machines From Tax

The Indian Finance Minister Nirmala Sitharaman, during the 2026-27 annual budget on Sunday, announced that it would amend its laws to prevent foreign companies from incurring taxes merely by owning machines.

This exemption will be in effect until the 2030-31 tax year and will apply only to factories in designated customs-bonded areas, which are technically considered outside India’s customs border.

The Indian government stated that income from supplying capital goods, equipment, or tooling to a contract manufacturer in India is eligible for tax exemption.

The move is expected to encourage Apple and other companies to invest more in the electronics manufacturing sector by covering the initial expenses for expensive machines, thus reducing the financial burden on their contract manufacturers.

Apple’s Big Growth Opportunity In India

Apple has ramped up its focus on India with “strong double-digit revenue” growth in the country. “It was a terrific quarter in India. We really like what we see here,” said CEO Tim Cook.

Cook, during the company’s Q1 earnings call, said that despite a strong growth record, Apple still held only a modest share in the market, and most customers purchasing iPhones, Macs, iPads, and Watches were new to those products, highlighting the significant opportunity ahead.

According to December reports, Apple had also been in talks with Indian chipmakers to assemble and package iPhone components in India, a move that could further strengthen its supply chain in the region. 

Apple posted Q1 revenue of $143.76 billion, surpassing the $138.42 billion analyst estimate, with over 2.5 billion active devices in its installed base.

Benzinga’s Edge Rankings place Apple in the 95th percentile for quality and the 71st percentile for momentum, reflecting its strong performance. Benzinga’s screener allows you to compare Apple’s performance with its peers.  

Price Action: Over the past year, Apple stock climbed 9.21%, as per data from Benzinga Pro. On Friday, the stock rose 0.46% to close at $259.48.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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