03 Aug 2026
The government proposed extending the tax exemption for foreign firms supplying equipment to Indian contract manufacturers to FY2040-41, from the present 2031.
The draft bill covers mobile phones, tablets, laptops, hearing and wearable devices, and applies to factories and warehouses in customs-bonded areas that sit outside India's customs border. The original exemption was introduced in February and ran only to 2031. A ten-year extension changes the payback maths on plant that takes years to build, which is exactly what contract manufacturers price against.