India Proposes Extended Tax Breaks to Boost Electronics Manufacturing

India has proposed extending tax exemptions until 2041 for foreign companies that provide machinery to contract manufacturers, a move expected to benefit global firms such as Apple. The proposal aims to provide long-term tax certainty as India continues to expand its role as a global electronics manufacturing hub and attract investments beyond China.

The proposed tax relief will apply to manufacturers of mobile phones, tablets, laptops, wearable devices, and hearing equipment. It also exempts income earned by foreign companies from storing and supplying electronic components through customs-bonded warehouses until 2041, helping strengthen export-focused supply chains and reduce disruptions caused by global trade uncertainties.

The draft legislation also eases tax rules for foreign companies using Indian data centres by allowing local partners to lease facilities instead of owning them, lowering investment costs. In addition, the government has proposed a 15-year tax exemption for foreign diamond miners and traders selling rough diamonds through designated trading zones, further supporting India’s manufacturing and export sectors.

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