New Delhi, October 16, 2025 – Apple lobbying the Indian government to revise a tax law that imposes duties on machinery imports for its local production lines. Sources say this Apple India machinery tax issue is hindering the company’s expansion plans in the world’s second-largest smartphone market. The lobbying efforts target a rule requiring firms to pay taxes on equipment if they fail to meet export targets.
This story matters in South Asia as India’s manufacturing push under ‘Make in India’ attracts global giants like Apple, but tax hurdles could deter investments and affect job creation in a region seeking economic diversification beyond services.
Details of the Apple India Machinery Tax Issue
Apple has engaged with Indian officials to change a provision in the country’s customs law. The rule mandates that companies importing capital goods under concessional duties must export a certain value of products or face penalties. For Apple, this creates an Apple expansion India tax hurdle, as its suppliers struggle to meet the export obligations tied to iPhone assembly.
According to sources familiar with the discussions, Apple argues that the tax law discourages scaling up production. The company aims to boost output in India to reduce reliance on China. In 2024, Apple’s India revenue reached $8 billion, up 33% from the prior year, driven by iPhone exports.
India’s finance ministry has not publicly responded, but internal deliberations are underway. The Apple lobbying for India tax law change seeks exemptions or relaxations for high-value tech manufacturing.
Government Stance and Economic Context
The Indian government introduced the tax incentive scheme in 2020 to promote exports. Firms like Foxconn and Pegatron, Apple’s key partners, benefit from it but face audits if targets are missed. Data from the Ministry of Commerce shows electronics exports hit $29 billion in fiscal 2025, with smartphones accounting for 40%.
Apple’s plea aligns with broader industry calls. The India Cellular and Electronics Association (ICEA) has urged reforms, noting that rigid rules impede growth. In a press release dated October 10, 2025, ICEA stated: “Tax structures must evolve to support domestic value addition.”
This Apple India machinery tax issue underscores tensions between fiscal policies and investment goals. Prime Minister Narendra Modi’s administration targets $500 billion in electronics manufacturing by 2030.
Implications for Apple’s Expansion in India
Apple began assembling iPhones in India in 2017. By 2025, 14% of global iPhone production occurs here, per analyst estimates. However, the Apple expansion India tax hurdle could slow this shift. Suppliers have invested $16 billion since the production-linked incentive (PLI) scheme launched in 2020.
A source close to the matter said Apple is pushing for a policy tweak to allow more flexibility in export commitments. Without it, firms might relocate to Vietnam or Thailand, where tax regimes are more lenient.
Government data from the Directorate General of Foreign Trade indicates 85% compliance among PLI beneficiaries, but tech firms like Apple cite supply chain disruptions as a challenge.
Broader South Asian Ramifications
In South Asia, India’s policies influence neighbours. Pakistan and Bangladesh eye similar manufacturing incentives. If Apple succeeds in its lobbying for India tax law change, it could set a precedent, boosting regional tech hubs.
Yet, critics argue exemptions erode revenue. India’s fiscal deficit stands at 5.1% of GDP in 2025, per budget documents. Balancing incentives with taxes is key.
Apple’s strategy includes diversifying suppliers. In September 2025, it announced partnerships with Tata Electronics for component manufacturing.
What’s Next
Officials may address the issue in the upcoming budget session in February 2026. Apple lobbying for India tax law change remains pivotal for its goal of 25% India-made iPhones by 2027.
Published in SouthAsianDesk, October 16th, 2025
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