Apple lobbies to change India’s tax law hindering its expansion: Report
Experts caution that without legal revisions, Apple could face billions of dollars in additional taxes, unlike in China, where similar arrangements do not attract such tax obligations.
- Oct 15, 2025,
- Updated Oct 15, 2025 4:28 PM IST
Apple is reportedly lobbying India's government to revise a 1961 income tax regulation that treats foreign ownership of manufacturing equipment as a 'business connection'. This could make the firm's iPhone profits liable for Indian taxation if it continues its practice of providing high-value machinery to contract manufacturers.
According to a report in Reuters, executives have reportedly held talks with Indian authorities, seeking to avoid significant tax liability and expressing concerns that the regulations may impede its expansion. India's status as the world's second-largest mobile market, combined with Apple's growing manufacturing investments, has intensified debate over the legislative framework.
Experts caution that without legal revisions, Apple could face billions of dollars in additional taxes, unlike in China, where similar arrangements do not attract such tax obligations. In China, Apple supplies machinery to its contract manufacturers without incurring liability, but in India, these assets would create a 'business connection' under the Income Tax Act.
Apple's negotiations come as its India operations surge. Counterpoint Research notes that iPhone's market share in India has doubled to 8 per cent since 2022, and the country's share of global iPhone shipments has risen fourfold to 25 per cent. Foxconn and Tata, Apple’s contract manufacturers, have invested over $5 billion in five manufacturing plants, much of which covers the cost of advanced assembly equipment.
Apple has also launched several directly-owned retail outlets in India since 2023, signaling its long-term commitment. The report stated that Apple's concerns and lobbying activities are now under official review.
Smartphone manufacturing remains central to Prime Minister Narendra Modi’s economic agenda. India’s deputy IT minister previously indicated that other Asian nations could surpass India as smartphone export hubs due to their more favourable tariff regimes.
Apple is reportedly lobbying India's government to revise a 1961 income tax regulation that treats foreign ownership of manufacturing equipment as a 'business connection'. This could make the firm's iPhone profits liable for Indian taxation if it continues its practice of providing high-value machinery to contract manufacturers.
According to a report in Reuters, executives have reportedly held talks with Indian authorities, seeking to avoid significant tax liability and expressing concerns that the regulations may impede its expansion. India's status as the world's second-largest mobile market, combined with Apple's growing manufacturing investments, has intensified debate over the legislative framework.
Experts caution that without legal revisions, Apple could face billions of dollars in additional taxes, unlike in China, where similar arrangements do not attract such tax obligations. In China, Apple supplies machinery to its contract manufacturers without incurring liability, but in India, these assets would create a 'business connection' under the Income Tax Act.
Apple's negotiations come as its India operations surge. Counterpoint Research notes that iPhone's market share in India has doubled to 8 per cent since 2022, and the country's share of global iPhone shipments has risen fourfold to 25 per cent. Foxconn and Tata, Apple’s contract manufacturers, have invested over $5 billion in five manufacturing plants, much of which covers the cost of advanced assembly equipment.
Apple has also launched several directly-owned retail outlets in India since 2023, signaling its long-term commitment. The report stated that Apple's concerns and lobbying activities are now under official review.
Smartphone manufacturing remains central to Prime Minister Narendra Modi’s economic agenda. India’s deputy IT minister previously indicated that other Asian nations could surpass India as smartphone export hubs due to their more favourable tariff regimes.