India wants to keep Apple building. The government has proposed extending a tax break for foreign firms that supply manufacturing equipment to contract manufacturers, a change drafted with iPhone assembly squarely in mind.

Under a draft bill reviewed by Reuters, the exemption would run until 31 March 2041, well beyond the 2031 cut-off set when the measure was introduced in February.

It spares overseas suppliers from Indian tax on the high-end machinery they hand to assemblers such as Foxconn and Tata.

The move is the latest in a run of incentives India has used to pull electronics production onshore, from a 5-year manufacturing subsidy aimed at iPhone and Samsung makers to broader industrial support. The through-line is the same, to make it cheaper to build phones in India than to import them.

The specific problem the draft fixes is a familiar one for contract manufacturing. Assembly plants often run on equipment owned by a foreign parent or partner, and without an exemption that arrangement can trigger a tax charge in India, the kind of friction that makes a company think twice about where it puts a line.

The bill goes further than phones. It also covers tablets, laptops, and wearables, and adds exemptions for storing and supplying components in customs-bonded zones that sit, technically, outside India’s customs border.

There is a data-centre sweetener too. Foreign firms would be able to lease rather than own data centres in India while keeping their tax exemptions, an allowance drafted to run as far out as 2047.

The payoff India is chasing is visible in the production numbers. The country made about 6% of the world’s iPhones in 2022 and is on track for roughly 26% in 2026, a shift that has turned it from a side bet into a core part of Apple’s supply chain.

That move out of China is the whole point. Apple has spent years relocating iPhone output away from a single country, pushed by tariffs, geopolitics, and concentration risk, and India has been the biggest winner from the reshuffle.

Apple now assembles a widening range of iPhones in India, including higher-end Pro models that once stayed in China.

A large share of that output is exported rather than sold at home, which makes the country a manufacturing hub and not just a market.

India is not the only country chasing the work. Vietnam has taken a growing slice of Apple’s assembly, so the incentives are as much about holding ground as gaining it, and a decade-long tax horizon is a hard offer for rivals to beat.

New Delhi has been happy to help it along. The government recently scrapped import duties on electronics and battery inputs, and has pledged $20 billion to build up domestic chips and smartphones, part of Narendra Modi’s long-running push for a home-grown manufacturing base.

The February version already let foreign firms fund equipment for Indian plants without a tax hit, a fix Apple had pushed for. Extending it to 2041 turns a short-term concession into something suppliers can plan a decade of spending around.

Analysts read the extension as a signal as much as a subsidy. Riaz Thingna, a partner at Grant Thornton Bharat, framed the certainty it offers as the real value, giving suppliers the long horizon they need before committing to expensive kit.

Apple’s Indian supply chain is scaling fast enough to have its own headaches. A recent Tata data leak exposed an iPhone supplier list, a reminder that moving production also moves the risks that travel with it.

The bill still has to pass. It needs parliamentary approval before any of it becomes law, so the timing rests on New Delhi’s legislative calendar rather than Apple’s product one.

For Apple, the direction is the reassurance. India has spent two years making itself the easy place to build an iPhone, and the latest draft is another sign it does not plan to stop.

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