Apple Lobbies India to Change Tax Law Hindering Its Expansion | 15 October 2025

Apple Lobbies India to Amend Tax Law Hindering Its Expansion

Apple Inc., the U.S. technology giant, has urged the Indian government to amend provisions under the 1961 Income Tax Act, saying the current law could complicate its expansion plans in one of the world’s fastest-growing markets.

Apple has requested that the government clarify rules around the “business connection” clause — which treats foreign companies as liable for taxes if they own or lease machinery and equipment within India. The company argues that such ownership should not automatically create a taxable presence, especially for entities investing in local manufacturing through partners.

Apple fears that, under the current interpretation, it could face billions of rupees in additional tax obligations, potentially slowing its manufacturing and investment drive in India.

This move is part of Apple’s broader strategy to expand local production through partnerships with Foxconn and Tata Group, both of which assemble iPhones in India. The effort aligns with New Delhi’s goal of positioning the country as a global electronics hub and attracting major technology firms.

A senior government official confirmed that the Finance Ministry is reviewing the proposal carefully, balancing the need to attract foreign investment while preserving India’s tax sovereignty.

Industry experts believe the issue highlights a delicate policy challenge: encouraging multinational investment while ensuring clarity and fairness in tax administration.

The Indian Cellular & Electronics Association (ICEA) has supported Apple’s proposal, emphasizing that tax predictability is vital for global investors and India’s long-term competitiveness.

“Providing a clear framework under the Income Tax Act will boost investor confidence and accelerate manufacturing growth,” an ICEA representative stated.

If the government accepts Apple’s request, analysts say it could send a positive signal to other global tech companies considering large-scale investments in India. However, maintaining a rigid stance may risk slowing down Apple’s expansion and limiting India’s appeal as a preferred manufacturing destination.