Apple and its manufacturing partner Foxconn were among the companies that implemented groundbreaking liberalization of labor laws in India’s Karnataka state last month, according to three people familiar with the matter.
Their successful lobbying for the new law means that two-shift production will take place in India, similar to the practices of both companies in China, their primary manufacturing base. Aiming to become a manufacturing hub, it gives the southern state one of the most flexible labor regimes in India.
Karnataka’s move is to seize the opportunity created by companies looking to end their over-reliance on Chinese manufacturing after months of COVID-19 disruptions that have rocked global supply chains. It is an attempt to
“India will become the next big manufacturing hub,” said a senior Indian government official who wished to remain anonymous. “Comparing India with other countries, we need to improve our efficiency significantly when it comes to making jobs more productive.”
India’s Electronics and IT Minister Rajeev Chandrasekhar said last week that a new 300-acre factory in Karnataka will produce Apple phones. Foxconn has not confirmed factory plans.
India’s hi-tech hub state last week amended its application of the Factory Act to allow shifts of 12 hours from the previous limit of 9 hours. It also relaxed the rules for night work for women who dominate electronics manufacturing lines in China, Taiwan and Vietnam but are underrepresented in the Indian workforce. Although limited to 48 hours, the number of overtime hours allowed has also increased from 75 hours before to 145 hours in 3 months.
The official said Karnataka had amended its labor laws after receiving “a lot of input” from Indian industry lobby groups and foreign companies such as Foxconn and Apple. Both Foxconn and Apple declined to comment.
“This is what we and our customers have been pursuing,” said a person close to Foxconn, referring to Apple. “This is an important adjustment to build efficient manufacturing here at scale.”
The person said India, which is set to overtake China as the world’s most populous country this year, is a promising market that Foxconn can no longer ignore, but a large gap remains in the investment climate between India and China. Said there was
“Being able to produce two 12-hour shifts around the clock would be a big step closer to where we need to be,” said the person.
Narendra Modi’s government is pushing for ‘Make in India’ to boost manufacturing, which still plays a modest role in India’s service-oriented economy.
The central government and Indian states, especially in southern India, are trying to offer incentives to investors in electronics and other sectors to attract manufacturers looking to diversify away from China.
Foxconn, which currently makes iPhones at a factory in Tamil Nadu, has spoken of expanding operations in Karnataka and neighboring Telangana, but has not detailed any plans to manufacture for Apple. But Foxconn chairman Young Liu visited the cities of Hyderabad in Telangana and Bengaluru in Karnataka last week in the clearest sign that the Taiwanese electronics group plans to expand operations in India. became one.
Apple also assembles iPhones at factories in India run by rival Taiwanese contract manufacturers Pegatron and Wistron.
Additional reporting by Patrick McGee in San Francisco
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