India is about to cut leeks again: After the eight apple production lines were moved from China to India, India took out a 1961 law saying that apples cannot only pay Indian taxes, and that the total tax on global turnover...
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Recently, Apple’s investment in India has encountered a major event that has caused the global tech community to start paying attention to “instability factors” in the Indian market.
The cause of the incident was that Apple moved eight iPhone production lines from China to India. I thought this was a good opportunity to diversify the supply chain and expand the Indian market. Unexpectedly, the Indian tax authorities suddenly came to the door and uncovered the 1961 Income Tax Law, which requires Apple to pay not only local taxes in India, but also taxes based on global turnover.
The transaction puts Apple directly in the face of huge tax charges of up to a billion dollars, almost three times as much as India had previously granted to Apple.
As a result, the shock is not only Apple, Google, Amazon, Microsoft and other multinational giants are also caught up, and the entire international business community is concerned about India's "new rules".
Apple's choice of India is no accident. The global industrial chain is being adjusted, Sino-US relations are becoming increasingly tense, and many companies are looking for a second production base.
In order to attract foreign investment, India introduced the "Made in India" policy, and accompanied by a series of incentives such as tax cuts, land subsidies, export tariff preferences.Apple looked at this environment, believed it was worth investing, and moved some of the production capacity from China, and plans to make all the iPhones aimed at the U.S. market "Made in India" by 2026.
At present, Apple has asked Tata Group to build two new full-process manufacturing centers in Tamil Nadu, and by the end of 2025 the production capacity of the Indian iPhone will increase from 35 million units per year to 70 million units.
But as Apple was busy expanding its capacity, India’s tax department came in. India pulled out section 66A of the Old Tax Act of 1961, which states that non-resident companies have a “significant economic presence” in India, and must include global income in the scope of Indian taxation.
In other words, as long as you have a factory in India, no matter what global market you make, as long as it is linked to Indian business, India can tax taxes.
In the past, the law originally targeted only indigenous companies in India, and later India continued to modify the terms, even allowing revenue to go back decades, which left Apple out of hand.
On the surface, it’s just a tax issue, but for, it means the entire investment logic is broken: investments were initially based on policies and commitments provided by the Indian government, and now the rules change in the middle, directly increasing costs and uncertainty.
Apple's woes aren't just about a big tax bill. The capacity and efficiency of India are far less than those of Chinese factories. At the peak of Foxconn factory in Zhengzhou, China, the daily output of iPhone can reach 500,000 units, while the annual output of Indian factory is only 5 million units, and the yield rate is only 80% of that of China.
To ensure high-end model production, Apple had to send engineers from China to guide the past, and core parts still depend on Chinese supplies.
A more intuitive figure is that 58% of the materials in Indian factories come from China, and US$830 million was paid in tariffs alone. This means that on the surface, Apple is produced in India, but in fact it relies heavily on China's supply chain, which runs counter to the original intention of diversification.
The Indian side obviously does not care about these actual situations. The tax department directly focuses on part of Apple's global revenue of US$297 billion to calculate taxes, but does not consider factors such as low profit margins and high costs of Indian factories.
Similar things previously suffered from Samsung, who in 2019 struck $2 billion in subsidies to build a factory in India, resulting in $6.2 billion in tax receipts in 2023.
Vodafone has also been taxed retroactively by India for more than a decade for overseas mergers and acquisitions. These cases show that India's policy implementation on foreign investment is full of uncertainty, making it difficult for companies to invest with confidence.
This kind of policy uncertainty directly affects foreign investment confidence. In the first half of 2024, India's net inflow of foreign investment fell by 98%, and Goldman Sachs even suspended the subscription of Indian technology funds.
In the long run, if India continues to "turn over old scores" in tax and investment policies, foreign-funded enterprises are likely to turn their investment to Southeast Asian countries such as Vietnam, Indonesia and Malaysia, which have flexible policies, transparent implementation, complete industrial facilities and relatively controllable risks.
India wants to rely on Apple to support the name of "Made in India", but high taxes and policy arbitrariness may scare investors, and manufacturing development goals are difficult to.
Compared to India, China's manufacturing advantages are obvious.China has a mature industrial chain, a stable supply system and improved infrastructure to ensure large-scale, high-efficiency production.
157 of Apple's 187 core suppliers are still rooted in China, and core components such as chips and screens all rely on Chinese supplies. In 2024, exports from China's central and western regions will reach US $630 billion, a year-on-year increase of 94%, showing industrial resilience.
Even if part of Apple's production capacity is moved to India, China is still the most reliable and mature production base in the world. A stable policy environment, mature talent team, and efficient industrial chain support make foreign-funded enterprises more willing to invest for a long time.
If India wants to become the "world's factory", the problem lies not only in tax rates or subsidies, but also in the stability of the system and environment.
The incident was a signal from India to global tech companies: on the one hand, emphasizing economic sovereignty, indicating that foreign companies can’t “leave to profit” and on the other, trying to gain more speech in international negotiations.
But for foreign-funded enterprises, the uncertainty brought by this approach may make India unattractive. Capital is profit-seeking, and enterprises will choose a more stable and predictable market for long-term investment. If India does not balance the relationship between attracting foreign investment and protecting local interests, it may shoot itself in the foot.
Source: Apple lobbied India to amend tax laws, saying the law hampers its expansion plans 2025-10-15 18:41
Please click "Follow" in the upper right corner of the officials to facilitate your discussion and sharing. Thank you for your support!
Recently, Apple’s investment in India has encountered a major event that has caused the global tech community to start paying attention to “instability factors” in the Indian market.
The cause of the incident was that Apple moved eight iPhone production lines from China to India. I thought this was a good opportunity to diversify the supply chain and expand the Indian market. Unexpectedly, the Indian tax authorities suddenly came to the door and uncovered the 1961 Income Tax Law, which requires Apple to pay not only local taxes in India, but also taxes based on global turnover.
The transaction puts Apple directly in the face of huge tax charges of up to a billion dollars, almost three times as much as India had previously granted to Apple.
As a result, the shock is not only Apple, Google, Amazon, Microsoft and other multinational giants are also caught up, and the entire international business community is concerned about India's "new rules".
Apple's choice of India is no accident. The global industrial chain is being adjusted, Sino-US relations are becoming increasingly tense, and many companies are looking for a second production base.
In order to attract foreign investment, India introduced the "Made in India" policy, and accompanied by a series of incentives such as tax cuts, land subsidies, export tariff preferences.Apple looked at this environment, believed it was worth investing, and moved some of the production capacity from China, and plans to make all the iPhones aimed at the U.S. market "Made in India" by 2026.
At present, Apple has asked Tata Group to build two new full-process manufacturing centers in Tamil Nadu, and by the end of 2025 the production capacity of the Indian iPhone will increase from 35 million units per year to 70 million units.
But as Apple was busy expanding its capacity, India’s tax department came in. India pulled out section 66A of the Old Tax Act of 1961, which states that non-resident companies have a “significant economic presence” in India, and must include global income in the scope of Indian taxation.
In other words, as long as you have a factory in India, no matter what global market you make, as long as it is linked to Indian business, India can tax taxes.
In the past, the law originally targeted only indigenous companies in India, and later India continued to modify the terms, even allowing revenue to go back decades, which left Apple out of hand.
On the surface, it’s just a tax issue, but for, it means the entire investment logic is broken: investments were initially based on policies and commitments provided by the Indian government, and now the rules change in the middle, directly increasing costs and uncertainty.
Apple's woes aren't just about a big tax bill. The capacity and efficiency of India are far less than those of Chinese factories. At the peak of Foxconn factory in Zhengzhou, China, the daily output of iPhone can reach 500,000 units, while the annual output of Indian factory is only 5 million units, and the yield rate is only 80% of that of China.
To ensure high-end model production, Apple had to send engineers from China to guide the past, and core parts still depend on Chinese supplies.
A more intuitive figure is that 58% of the materials in Indian factories come from China, and US$830 million was paid in tariffs alone. This means that on the surface, Apple is produced in India, but in fact it relies heavily on China's supply chain, which runs counter to the original intention of diversification.
The Indian side obviously does not care about these actual situations. The tax department directly focuses on part of Apple's global revenue of US$297 billion to calculate taxes, but does not consider factors such as low profit margins and high costs of Indian factories.
Similar things previously suffered from Samsung, who in 2019 struck $2 billion in subsidies to build a factory in India, resulting in $6.2 billion in tax receipts in 2023.
Vodafone has also been taxed retroactively by India for more than a decade for overseas mergers and acquisitions. These cases show that India's policy implementation on foreign investment is full of uncertainty, making it difficult for companies to invest with confidence.
This kind of policy uncertainty directly affects foreign investment confidence. In the first half of 2024, India's net inflow of foreign investment fell by 98%, and Goldman Sachs even suspended the subscription of Indian technology funds.
In the long run, if India continues to "turn over old scores" in tax and investment policies, foreign-funded enterprises are likely to turn their investment to Southeast Asian countries such as Vietnam, Indonesia and Malaysia, which have flexible policies, transparent implementation, complete industrial facilities and relatively controllable risks.
India wants to rely on Apple to support the name of "Made in India", but high taxes and policy arbitrariness may scare investors, and manufacturing development goals are difficult to.
Compared to India, China's manufacturing advantages are obvious.China has a mature industrial chain, a stable supply system and improved infrastructure to ensure large-scale, high-efficiency production.
157 of Apple's 187 core suppliers are still rooted in China, and core components such as chips and screens all rely on Chinese supplies. In 2024, exports from China's central and western regions will reach US $630 billion, a year-on-year increase of 94%, showing industrial resilience.
Even if part of Apple's production capacity is moved to India, China is still the most reliable and mature production base in the world. A stable policy environment, mature talent team, and efficient industrial chain support make foreign-funded enterprises more willing to invest for a long time.
If India wants to become the "world's factory", the problem lies not only in tax rates or subsidies, but also in the stability of the system and environment.
The incident was a signal from India to global tech companies: on the one hand, emphasizing economic sovereignty, indicating that foreign companies can’t “leave to profit” and on the other, trying to gain more speech in international negotiations.
But for foreign-funded enterprises, the uncertainty brought by this approach may make India unattractive. Capital is profit-seeking, and enterprises will choose a more stable and predictable market for long-term investment. If India does not balance the relationship between attracting foreign investment and protecting local interests, it may shoot itself in the foot.
Source: Apple lobbied India to amend tax laws, saying the law hampers its expansion plans 2025-10-15 18:41