Apple and Foxconn Win Labour Reforms in India to Increase Production
Apple and its largest supplier, Foxconn, recently scored a big win for their expansion ambitions in India as the state of Karnataka relaxed labour laws, allowing two-shift production for increased output — reports the Financial Times.
Karnataka, which has become something of a tech hub for India, last week passed an amendment to increase maximum shift lengths at factories from nine hours to 12. The change will enable round-the-clock production at Indian factories run by Foxconn (and others) with two 12-hour shifts.
Karnataka also softened rules on night-time work for women, who make up the bulk of the electronics production workforce in other Asian manufacturing hubs like China, Taiwan, and Vietnam. While maximum working hours remain capped at 48 per week under the new rules, the limit for overtime hours over a three-month period has been increased from 75 to 145.
Apple and Foxconn were among several companies backing lobbying efforts for the legislative changes.
Foxconn already produces Apple’s latest iPhone models in India at a plant in Tamil Nadu. However, the win comes as Apple’s primary assembly partner reportedly prepares to build another Indian factory in the state of Karnataka.
For Karnataka, the move to relax labour laws was spurred by an urgency to invite foreign investment in manufacturing as tech giants like Apple strive to reduce their dependence on Chinese production.
“India is due to become the next big manufacturing hub,” an unnamed Indian government official told the Financial Times. “When we compare India with other countries . . . we have to increase by a big margin our efficiency in terms of increasing the work output.”
According to a report from last month, Apple’s efforts to increase its production footprint in India have been experiencing some teething issues, particularly with production yield. The new legislative reforms could help with that.
“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 revamped labour laws could help bring India’s manufacturing potential on par with factories in China. “Being able to run production with two 12-hour shifts around the clock would be a big step to bring us closer to where we need to be,” the person added.
India is positioned as one of the prime destinations for the manufacturing efforts Apple wants to move out of China. Apple is reportedly also shaking up its top-level management to put more focus on India and making the country a dedicated sales region at the company.