India Exempts Apple, Foreign Firms from Export Equipment Tax
- ByStartupStory | February 2, 2026
India’s 2026-27 Union Budget introduces a five-year income tax exemption for foreign companies like Apple providing capital goods, equipment, or tooling to contract manufacturers in bonded zones, eliminating a major tax risk that deterred global electronics giants.
Boosting Export-Led Smartphone Manufacturing
The policy change – announced by Finance Minister Nirmala Sitharaman – applies to factories in customs-bonded areas treated as outside India’s customs territory, primarily benefiting export-oriented units. Domestic sales from these facilities still attract import duties, ensuring revenue protection while slashing costs for high-value machinery imports critical for iPhone and semiconductor assembly.
Unlocking $100B Electronics Export Ambitions
Targeted at Apple’s Foxconn and Tata plants in Karnataka and Tamil Nadu, the exemption accelerates Prime Minister Modi’s “Make in India for the World” strategy amid intensifying China+1 diversification. Tax experts call it a “deal-breaker removed,” positioning India to capture 20% of global smartphone exports by 2030 as firms confidently deploy billion-dollar production tooling without ownership-based tax liabilities.
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