India's Budget 2026: Apple Wins Tax Relief for Manufacturing Equipment Funding

• India's government has allowed foreign companies, including Apple, to fund equipment for contract manufacturers without tax risk for five years.
• This change addresses Apple's concern that funding machinery for Indian contract manufacturers like Foxconn and Tata could lead to a "business connection" and impose taxes on iPhone sales profits.
• The new rule, part of Finance Minister Nirmala Sitharaman's 2026-27 budget, applies until the 2030-31 tax year and only to factories in customs-bonded areas.
• The exemption aims to promote electronics manufacturing in India, making it easier for global players to scale up operations and increase confidence.
• This decision supports Apple's strategy to diversify manufacturing beyond China, as India's share of global iPhone shipments has quadrupled to 25% since 2022.

Why It Matters: India's new tax exemption for foreign firms funding manufacturing equipment boosts electronics production and Apple's expansion.