Summary
- The 2026 Union Budget has brought a major relief for Apple in the form of foreign liability tax exemption.
- The foreign ownership of equipment clause in the Income Tax Act of 1961 has been revised, changing a 65 year old law.
- With the new tax relief Apple can accelerated its presence in India with new retail stores, direct investments and more.
India is one of the biggest markets for Apple and a major chunk of the brand's iPhone sales originates from the subcontinent. Hence, it is no wonder that the Cupertino brand has been lobbying the Indian Government for key tax exemptions for smoother operations. Now, its efforts have finally paid off in a landmark regulatory reform.
Apple granted relief under foreign ownership of equipment clause, 1961 Income Tax Act
At the 2026 edition of the Union Budget, Hon'ble Finance Minister Nirmala Sitharaman announced the first-ever reform to the Income Tax Act of 1961. The 65-year-old Foreign Direct Investment (FDI) Act has seen a major tweak under the Foreign Ownership of Equipment clause.
Under the updated framework, brands like Apple, Ashok Leyland, Dixon Technologies and more can now provide foreign machinery to local manufacturing units without attracting additional tax liability for up to five years.
It means that Apple iPhones can now be manufactured in India without Apple needing to shell out billions of dollars in the name of high-end iPhone machinery. This marks a huge win for Apple in general and consumers in India in particular.
Till now, every "Made in India" iPhone sold in India came with an additional tax markup to cover the domestic tax burden. It added to the final selling price of iPhones. However, with that tax liability now removed, iPhones could get potentially cheaper in India.
While the price reduction will not be extremely high, it will still be noticeable. However, given the current RAM price hike fiasco, it is hard to predict if this will even happen. However, given that the final production cost will reduce significantly, Apple could end up being the only brand to bring no price hike for the iPhone 18 series.
Either way, this is a win for consumers. Apple managed to ship $7.5 billion (approximately Rs 63,000 crore) worth of "Made in India" iPhones globally in 2025. With the latest tax relief, this number could potentially increase. It will also allow the iPhone maker to invest more in retail stores, direct investments and long-term government tie-ups.
Source
Reuters
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