India Extends Tax Breaks for Foreign Contract Manufacturers
India is set to extend tax breaks for foreign companies supplying machinery and equipment to contract manufacturers until 2041, benefiting companies like Apple. The move aims to attract exports and follows recent import duty reductions. The tax exemption applies to mobile phones, tablets, and other electronic devices manufactured in customs-bonded areas.
Key points
- India is moving to extend a tax break for foreign companies that supply machinery and equipment to contract manufacturers until 2031, with the initial exemption set to expire in 2031.
- The extended tax exemption will apply to manufacturers of mobile phones, tablets, laptops, hearing and wearable electronic devices.
- Factories and warehouses set up in customs-bonded areas will be eligible for the exemption, with devices sold within India attracting import taxes.
- The move is seen as a major win for Apple, which heavily lobbied the Indian government for the tax exemption.
- The Indian government has also removed import duties of 5% and 7.5% on several components used to manufacture smartphones and other electronic devices.
India is set to extend tax breaks for foreign companies supplying machinery and equipment to contract manufacturers until 2041. The move aims to attract exports and follows recent import duty reductions.
The tax exemption, which was initially set to expire in 2031, will now be extended for another decade. The exemption applies to manufacturers of mobile phones, tablets, laptops, hearing and wearable electronic devices.
Factories and warehouses set up in customs-bonded areas will be eligible for the exemption, with devices sold within India attracting import taxes. This makes such facilities attractive only for exports.
The move is seen as a major win for Apple, which heavily lobbied the Indian government for the tax exemption. The company has been expanding its manufacturing presence in India in recent years.
The Indian government has also removed import duties of 5% and 7.5% on several components used to manufacture smartphones and other electronic devices. This further cements India's role in Apple's global supply chain.
The extension of the tax break is expected to boost exports from India and attract more foreign investment in the country's manufacturing sector.
Sources
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