The US-based tech giant Apple has asked the Indian government to revise certain income tax laws that the company believes could slow down its plans to expand iPhone production in the country, according to a Reuters report.
The issue revolves around the taxation of high-value machinery that Apple provides to its contract manufacturers, such as Foxconn and Tata.
India is the world’s second-largest mobile market. Apple’s contract manufacturers Foxconn and Tata have pumped in billions of dollars to open five plants, but millions of those expenses go into acquiring pricey machines for iPhone assembly.
India’s Growing Importance For Apple
Apple’s interest in India has grown sharply in the last two years. According to Counterpoint Research, India’s share of iPhone sales has doubled to 8 per cent since 2022. While China still leads iPhone manufacturing with 75 per cent share, India’s contribution has jumped to 25 per cent.
Under India’s 1961 Income Tax Act, if Apple owns these machines, the government could consider it a ‘business connection,’ making Apple’s profits taxable in India.
Talks With Government Underway
Sources told Reuters that Apple executives have held several meetings with Indian officials to find a middle ground. A senior government official confirmed that talks are ongoing but added that the decision will not be easy.
India needs investments. We have to find a solution,” the official said.
Tax experts warn that if Apple is taxed under current laws, it could face billions in liabilities. On the other hand, rivals like Samsung avoid such issues because they own and operate their own factories in India.
Industry bodies like the India Cellular & Electronics Association (ICEA) have also asked the government to bring more tax certainty for global companies.
Times Now Tech has reached out to Apple India for a comment and will update the story once we receive a response.