Apple is reportedly lobbying the Indian government to amend income tax rules that could subject the company to additional taxes for owning high-value iPhone manufacturing machinery used by its contract partners, including Foxconn and Tata.
Apple executives have held several rounds of discussions with Indian officials, urging a policy revision to align taxation with global norms, according to a Reuters report.
While officials acknowledge the ongoing challenges, they are wary that any amendment could weaken India’s right to tax foreign entities, the report added.
India’s Tax Law Conundrum
Under India’s 1961 Income Tax Act, Apple’s ownership of manufacturing equipment could be deemed a “business connection,” potentially making a portion of its global iPhone profits taxable in India.
In contrast, Apple faces no such liability in China, where it owns but does not pay taxes on similar equipment.
Apple could face billions of dollars in tax exposure in India, potentially slowing its investment momentum.
Apple’s Growth Story In India
Apple has been shifting production away from China due to rising tariffs and geopolitical tensions. The tech giant reportedly aims to produce all iPhones for the U.S. market in India by 2026, with Tata and Foxconn leading the charge.
Currently, Foxconn accounts for two-thirds of iPhone shipments from India, while Tata produces the remaining one-third, a share expected to rise as Tata scales operations across its facilities in Tamil Nadu and Karnataka.
According to Counterpoint Research, India is projected to contribute around 26% of global iPhone shipments by the end of 2025, up from 20% at the start of the year.
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