India’s New 2025 Tax Break Gives Apple a Big Boost in iPhone Production

Highlights

• The Indian government announced tax cuts on key iPhone components during the Union Budget 2025.
• The move will benefit companies like Apple and Samsung by $2.7 billion.
• The tax cuts include components for mobile phone assembly such as printed circuit board assembly, camera module parts and USB cables.

Apple is set to benefit from a new tax break in India, which will lower the cost of assembling iPhones in the country. The Indian government recently announced the change during the Union Budget 2025. We previously reported about these plans that are expected to provide at least $2.7 billion in benefits to companies like Apple and Samsung. Here’s everything we know about the development.

Indian Government Cuts Taxes on Key iPhone Parts

India has been gradually reducing import duties on electronic components to encourage local manufacturing. Now, it has extended this tax relief.

According to a Reuters report, the Indian government has announced tax cuts on printed circuit boards, which are one of the key parts of an iPhone.

The report reveals, “India has removed import duties on some components key to producing mobile phones, Finance Minister Nirmala Sitharaman announced in the annual budget on Saturday […] The list included components for mobile phone assembly such as printed circuit board assembly, parts of camera modules, and USB cables, which were taxed at 2.5% earlier.”

India Is Apple’s Second-Largest Production Hub

In recent years India has become Apple’s biggest iPhone assembly centre after China. There have been ambitious claims that by 2027, half of all iPhones could be made in India. However, progress has been slower than expected.

Things picked up last year. Back in April, Bloomberg reported that one in seven iPhones were made in India. However, Apple has always struggled to manufacture flagship models there due to the complex production processes involved. That changed with the iPhone 16, which started production in India just weeks after its launch.

The recent tax cuts will lower the cost of making iPhones in India and the government is betting that it will encourage Apple to shift even more of its production to the country.

FAQs

Q1. What tax cuts did the Indian government announce during the Union Budget 2025?

Answer. The Indian government announced tax cuts on components for mobile phone assembly, including printed circuit board assembly, camera module parts and USB cables.

Q2. How much benefit is expected for companies like Apple and Samsung due to the new tax break?

Answer. The new tax break is expected to provide at least $2.7 billion in benefits to companies like Apple and Samsung.

Q3. Why is India an important hub for Apple’s iPhone production?

Answer. India has become Apple’s second-largest iPhone assembly centre after China, and the recent tax cuts aim to lower the cost of making iPhones in India, encouraging Apple to shift even more of its production to the country.

Also Read: Apple to Start Assembling AirPods in India for the First Time: Report

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