Apple is reportedly in talks with the Indian government to change the decades-old tax law, which could otherwise require it to pay billions of additional taxes. The company’s ownership of expensive machinery used by its contract manufacturers could make iPhone profits partially taxable in India. Under India’s Income Tax Act of 1961, if a foreign company owns assets within the country that contribute to its business, that ownership can create what’s called a “business connection.” In Apple’s case, the high-end iPhone-making machinery it provides to partners like Foxconn and Tata could make it face local tax obligations.

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In China, Apple retains ownership of the same machines without triggering any local tax obligations and is trying to get th

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