Exclusive-Apple lobbies India to change tax law seen hindering its expansion, sources say

Core Viewpoint - Apple is lobbying the Indian government to amend its income tax law to avoid taxation on high-end iPhone machinery it provides to contract manufacturers, which is seen as a barrier to its expansion in India [1][5]. Group 1: Apple's Market Position in India - Apple's presence in India is increasing as it diversifies from China, with iPhone's market share doubling to 8% since 2022 [2]. - While China accounts for 75% of global iPhone shipments, India's share has quadrupled to 25% since 2022 [2]. Group 2: Taxation and Business Practices - India is the second-largest mobile market globally, and Apple's contract manufacturers, Foxconn and Tata, have invested billions to establish five plants, incurring significant costs for expensive machinery [3]. - If Apple alters its business practices without a change in the 1961 law regarding foreign ownership of equipment, it could face billions in additional taxes [3][4]. - In China, Apple can own the machinery used for iPhone production without incurring taxes, but this is not the case in India due to the Income Tax Act [4]. Group 3: Government Discussions and Concerns - Apple executives have engaged with Indian officials to discuss potential changes to the law, expressing concerns that current legislation may hinder future growth [5]. - The Indian government is cautious about amending the law, as it could affect its sovereign right to tax foreign companies [7].