Share This Article
Apple and Foxconn, its primary manufacturing partner, played a significant role in the liberalization of labor laws in the southern Indian state of Karnataka. The landmark legislation permits two-shift production, a practice similar to that in China, where the two companies have their primary manufacturing base.
The law has provided Karnataka with one of the most flexible working regimes in India, allowing the country to become an alternative manufacturing hub to China.
The move comes as companies are looking to diversify their manufacturing bases away from China, following months of COVID-19 disruptions that have shaken global supply chains. Karnataka is seeking to seize this opportunity and has amended its labor laws after “a lot of inputs” from Indian industry lobby groups and foreign companies, including Apple and Foxconn.
The state, a center for India’s tech industry, has passed an amendment to its application of the factories act, allowing for 12-hour shifts, up from the previous limit of nine hours. It has also eased rules on night-time work for women, who dominate electronics production lines in China, Taiwan, and Vietnam but are under-represented in India’s workforce. The legislation caps maximum working hours at 48 per week but also expands the number of allowable overtime hours to 145 over a three-month period, from a previous 75.
“This is something we and the customer have been pursuing”, said a person close to Foxconn, referring to Apple. “It is an adjustment that’s crucial for building efficient manufacturing here at scale”.
The Indian government is trying to promote manufacturing, which still plays a modest role in India’s service-heavy economy, under a “Make in India” push. Both the central government and Indian states, especially in India’s south, are offering incentives to investors in electronics and other sectors in a bid to lure manufacturers seeking to diversify away from China.
Related articles
- Apple Supplier TSMC Ramps Up 3nm Production for iPhone 15 Pro and MacBook Models
- Chinese Apple Supplier Goertek Hit by VP Resignation Amidst Calls to Move Production
Apple and Foxconn are also making strides in India. Rajeev Chandrasekhar, India’s electronics and IT minister, announced last week that Apple phones would be produced at a new 300-acre factory in Karnataka. Foxconn has not confirmed any factory plans, but the company’s chair, Young Liu, visited the cities of Hyderabad in Telangana and Bengaluru in Karnataka last week, indicating that the Taiwanese electronics group plans to increase its footprint in India.
India, which is due to overtake China as the world’s most populous country this year, is a promising market that Foxconn can no longer ignore. However, significant gaps remain in the investment environment between India and China.
Apple already has its iPhones assembled in India at plants operated by rival Taiwanese contract manufacturers Pegatron and Wistron. With the new legislation in place, the company can now scale up production in India and reduce its reliance on China.
