Apple Receives Tax Break In India To Boost iPhone Production

Apple is set to gain from a recent tax adjustment in India that will lower the costs for assembling iPhones domestically. This announcement was made by the government on Saturday.

Preliminary discussions regarding these plans took place last month, with expectations that they could deliver substantial benefits—estimated at over $2.7 billion—for companies including Apple and Samsung.

India Emerges as Apple’s Second-Largest Production Base

Following China, India serves as Apple’s second most important site for iPhone assembly. While there have been optimistic predictions suggesting that by 2027, half of all iPhones could be produced in India, the actual implementation has progressed at a measured pace.

Last year marked a notable acceleration in production. According to Bloomberg, as of April, approximately 14% of iPhones were assembled in India; however, the production of high-end models had lagged due to the intricate manufacturing requirements. The introduction of the iPhone 16 changed that dynamic, as its production began shortly after the official launch.

Tax Relief for Apple

The Indian government has been systematically reducing import tariffs on electronic components brought into the country for local production, and has now extended this initiative.

Per a report by Reuters, a tax on printed circuit boards is among the iPhone components that are now exempt from duties.

The Finance Minister, Nirmala Sitharaman, announced during the annual budget speech that India has abolished import duties on several essential components required for mobile phone manufacturing, including printed circuit boards, camera module components, and USB cables, which previously carried a 2.5% tax.

This initiative is intended to reduce the overall cost of iPhone assembly in India, with the government hopeful that it will entice Apple to shift a greater portion of its manufacturing operations to the country.