In a significant move to solidify its position as a global manufacturing hub, India has proposed extending tax exemptions until 2041 for foreign companies that supply machinery to contract manufacturers. This policy shift is widely viewed as a major victory for tech giants like Apple, which has been actively lobbying for greater tax clarity as it shifts more of its iPhone production away from China. By ensuring that foreign-owned equipment provided to local partners is not classified as a "business connection" subject to heavy taxation, the government is effectively removing a key barrier that previously deterred international firms from investing deeply in the Indian supply chain.

Beyond just machinery, the proposed legislation broadens these incentives to include the storage and supply of electronic components within customs-bonded zones. This expansion is designed to streamline supply chains for mobile, tablet, and laptop production, making it easier for global brands to operate locally. Furthermore, India is loosening regulations surrounding data centers by allowing foreign entities to lease infrastructure rather than requiring local ownership. Combined with new tax concessions for the diamond trade, these moves signal a broader effort to slash operational costs and administrative hurdles, positioning the nation as an increasingly competitive and stable environment for international businesses.