India Exempts Apple, Foreign Firms from Export Equipment Tax

• February 2, 2026

India’s 2026-27 Union Budget has introduced a new five-year income tax exemption period for overseas corporations such as Apple that supply capital equipment or tooling to contract manufacturers operating in customs-bonded zones. This move addresses a significant tax barrier preventing global electronics leaders from expanding operations in India.

Accelerating Smartphone Production for Export Markets

The policy revision—presented by Finance Minister Nirmala Sitharaman—primarily benefits export-focused manufacturers located in bonded areas legally considered outside Indian customs jurisdiction. While domestically sold goods from these facilities remain subject to import duties, the exemption dramatically reduces operational costs for importing high-value production machinery essential for manufacturing smartphones and semiconductors.

Advancing $100 Billion Electronics Export Goals

Designed to support major manufacturers like Foxconn and Tata Electronics in states including Karnataka and Tamil Nadu, this tax reform aligns with India’s broader economic strategy to become a global manufacturing alternative. Industry analysts describe the change as a crucial step toward achieving 20% of worldwide smartphone exports by 2030, enabling multinational corporations to invest confidently in advanced production infrastructure without tax-related ownership concerns.