Budget Boosts Apple's India Manufacturing: Tax Relief for Contract Manufacturers

• Finance Minister Nirmala Sitharaman's Budget allows global electronics companies, including Apple, to provide machinery to local contract manufacturers for up to five years without triggering tax exposure.
• The policy clarifies that mere ownership of manufacturing equipment by a foreign entity will not constitute a taxable "business connection," addressing Apple's concerns about its India expansion.
• Previously, Apple's partners like Foxconn and Tata Electronics had to invest heavily in machinery due to tax uncertainties, a situation not faced in China.
• The exemption applies to units operating in customs-bonded areas and is primarily export-oriented, effective until the 2030-31 tax year.
• Industry experts view this as a catalyst for export growth, reducing margin pressure and capital constraints for equipment, and strengthening investor confidence.

Why It Matters: Budget tax relief for contract manufacturers will significantly aid Apple's India manufacturing expansion and supply chain diversification.