Tech regulation: Apple reportedly seeks changes to 1961 law; here’s why it matters

Latest developments and expert analysis

India, October 16, 2025 (Thursday)

The 1961 law that Apple reportedly wants India to change and why – The Times of IndiaEditionININUSEnglishEnglishहिन्दीमराठीಕನ್ನಡதமிழ்বাংলাമലയാളംతెలుగుગુજરાતીWeatherSign InTOITOI GamesLive VideosCityMetro CitiesmumbaidelhibengaluruHyderabadkolkatachennaiOther CitiesCityagraagartalaahmedabadajmeramaravatiamritsarbareillybhubaneswarbhopalchandigarhchhatrapati sambhajinagarcoimbatorecuttackdehradunerodefaridabadghaziabadgoagurgaonguwahatihubballiimphalindoreitanagarjaipurjammujamshedpurjodhpurkanpurkochikohimakolhapurkozhikodeludhianalucknowmaduraimangalurumeerutmumbai regionmysurunagpurnashiknavi mumbainoidapatnaprayagrajpuducherrypuneraipurrajkotranchithanesalemshillongshimlasrinagarsurattrichythiruvananthapuramudaipurvadodaravaranasivijayawadavisakhapatnamphotosWeb StoriesIndiafeaturedBihar Election 2025MaharashtraKarnatakaTelanganaWest BengalTamil NaduAndhra PradeshUttar PradeshGujaratRajasthanPunjabOdishaMadhya PradeshHaryanaTripuraUttarakhandBiharKeralaAssamArunachal PradeshManipurChhattisgarhJammu KashmirNagalandJharkhandMeghalayaHimachal PradeshWeb StoriesDigital ArrestOperation SindoorCancel PatriarchyWorldBusinessTechCricketSportsEntertainmentAstroTVEducationLife

& StyleWeb SeriesTimes EvokePhotosBlogsToday's ePaperNewsThe 1961 law that Apple reportedly wants India to change and whyThe 1961 law that Apple reportedly wants India to change and whyTOI Tech Desk / TIMESOFINDIA.COM / Updated: Oct 16, 2025, 12:22 ISTShareAA+Text SizeSmallMediumLargeApple seeks

changes to India’s income tax law. The company wants to avoid taxes on high-end iPhone machinery it provides to contract manufacturers. This issue is a hurdle for Apple’s expansion plans in India. The government is carefully considering the request, balancing

investment needs with sovereign tax rights. Industry bodies support Apple’s plea for tax certainty. Apple is reportedly lobbying hard with the Indian government to modify its income tax law. However, as per an exclusive report by news agency Reuters, Apple

wants the government to change a change a 1961 law to ensure that the company is not taxed for ownership of high-end iPhone machinery it provides to its contract manufacturers. The issue is reported to be seen as a hurdle

Key Developments

to the company's future expansion in India. Apple executives have held talks with the Indian officials in recent months to tweak the law as it could expose Apple to substantial tax liabilities if it were to directly own the specialized

equipment used by its contract manufacturers in India. as per a recent report, quoting official data, “In FY25, Apple through its vendors produced $22 billion worth of iPhones, of which 80% or $17.5 billion worth of made-in-India iPhones were exported.”

Industry experts predict Apple could surpass last year’s production and export figures by March 2026, though potential U.S. tariffs and trade restrictions may pose challenges. “At the current run rate, Apple is expected to cross the production and export figures

of last year.Why Apple wants India to change the lawCurrently, under India's Income Tax Act, a foreign company that owns equipment used by a local business is seen as having a "business connection." This connection would make Apple’s global iPhone

profits taxable in India, a financial burden that could run into billions of dollars.A senior government official and several industry sources confirm that this legal hurdle is a major roadblock to Apple’s ambitious plans. Moreover, “Contract manufacturers cannot put up

Key Developments

money beyond a point,” one industry source mentioned. “If the legacy law is changed, it will become easy for Apple to expand… India can become more competitive globally.”What is the rule in China, Apple’s biggest manufacturing baseIn China, Apple procures

the machines used to make iPhones and gives them to its contract manufacturers, and is not subject to tax even though it still owns them. But that's not possible in India as the Income Tax Act would consider such ownership

by Apple as a so-called "business connection", making the U.S. firm's iPhone profits liable for Indian taxes, reported a senior government official and two other industry sources.What’s at stake for India India needs to be cautious as China and Vietnam

could race ahead as major smartphone export hubs due to their lower tariffs on phone parts if electronic companies do not see advantage. A senior Indian official told Reuters that "discussions on taxation rules impacting Apple are ongoing", but government

is cautious as any changes to the law could diminish its sovereign right to tax a foreign company."It's a tough call," reported the official. Moreover, He at the same time highlighted that Apple's increased investments are equally important. "India needs

Key Developments

investments. We have to find a solution."The India Cellular & Electronics Association (ICEA) is reported to back Apple. as per the report, in a confidential representation to the government, ICEA has called for changes to the law, saying tax certainty

is "paramount for businesses seeking to expand and scale." "Typical CMs (contract manufacturers) are unable or unwilling to invest in such large quantities of specialized equipment … The cost of the equipment can rise to billions of dollars," ICEA reportedly

reported, without naming any company.About the AuthorTOI Tech DeskThe TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI

Tech Desk’s news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. In addition, Be it how-tos or the latest happenings in AI, cybersecurity,

personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.Read MoreEnd of ArticleFollow Us On Social Media Photostories From ‘Border 2’, ‘Ramayana’ to ‘Jailer 2’: 5 Indian movies set to dominate

Key Developments

20263 different types of Labradors: Which is the perfect Labrador breed for your family?5 weekend habits that keep you ahead in classBlurry vision? It might be sign of diabetes, high blood pressure, or brain problemWhat is Endometriosis: All about the

'painful' condition Victoria's Secret Angel Barbara Palvin suffered fromWhy waking up at Brahma Muhurta everyday can transform your lifeBroccoli vs. cauliflower: Which is healthier, the right way to cook, and 3 easy dishesA look back at last year’s most stunning

Diwali outfits: Janhvi Kapoor to Shraddha KapoorHow to train your brain to success: 5 simple tips, as per psychology7 foods that help lower cholesterol naturally123Hot PicksUAE Weather AlertRiyadh AirBihar Election DateGold rate todaySilver rate todayPublic Holidays OctoberBank Holidays OctoberTop TrendingUtah

MammothZach YadegariCanada Visa RulesCharlie Kirk SculptureBrittany MahomesAryna SabalenkaBavagutha RaghuramIndian Origin Truck Driver InterviewYoungest Indian BillionairesMalcolm Brogdon RetirementTired of too many ads?go ad free nowTrending StoriesIn SectionEntire WebsiteHarvard-trained gastroenterologist reveals bathroom mistakes that damage digestion and gut health; shares tips to

improve bowel movements and overall digestive wellness"You’d be clocking in to a 9 to 5 otherwise": Stephen Curry's wife Ayesha Curry sparks outrage for flaunting her expensive lifestyle amid her controversial remarks“Getting messy”: Taylor Swift’s gift to Teyana Taylor ignites

Key Developments

Keywords: India news, breaking headlines, business updates, politics, economy, daily news