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NEW DELHI : Apple seeks India labor reform to diversify beyond China
NEW DELHI : Apple Inc is seeking changes in India’s labor laws as part of its effort to expand local production, and regional governments are yielding to its request as they are eager to snatch iPhone assembly from China.
Tamil Nadu state, where Apple’s top supplier Foxconn Technology Group operates the nation’s largest iPhone plant, is considering passing new rules that will make factory shifts more flexible, people familiar with the matter said.
Executives from Apple and the Indian Cellular and Electronics Association lobby group — which represents the US company as well its suppliers such as Foxconn, Pegatron Corp and Wistron Corp — met with state government officials over six months to push for the reforms, the people said, asking not to be named as the discussions were private. The planned changes would bring local working hours on par with the iPhone factories in China, they said.
The moves are part of Apple’s effort to shift more production away from China to countries including India. Prime Minister Narendra Modi’s local manufacturing push, financial incentives and India’s relatively cheaper labor have led Foxconn, Pegatron and Wistron to ramp up in the South Asian nation.
Representatives for Apple, Foxconn and the Tamil Nadu government didn’t immediately respond to requests for comment. Pegatron and Wistron representatives declined to comment.
“India wants to have global brands like Apple make the country a home for manufacturing and research and development,” India’s deputy technology minister Rajeev Chandrasekhar told Bloomberg News. “The federal government is liaising closely with states to develop competitive policies such as the labor, logistics and infrastructure, which will help accelerate the shift of electronics supply chain to India.”
Labor law reforms in India are rare, and the country’s willingness to now accommodate Apple underscores how badly it wants to become an electronics manufacturing hub. The suggested changes include allowing more overtime and permitting factories to operate two shifts of 12 hours each, instead of the previous three shifts that each went on for eight hours.
The envisioned changes could also encourage more women to work in factories. By having more flexible shifts, women could avoid commuting on night buses — often seen as an unsafe option. Apple and its suppliers are also in talks to build large working women’s hostels in and around factory complexes, which would reduce travel time, two of the people said.
Foxconn, Pegatron and Wistron together employ nearly 60,000 workers in India. A significant part of that number are women, aged between 19 and 24.
“In electronics manufacturing, thanks to the hygienic environment and the roles in the units, women are a natural fit,” ICEA said in the 36-page recommendation document it submitted to the Tamil Nadu government, which was seen by Bloomberg News. “Women have superior manual dexterity, which is necessary for high-precision electronics assembly.”
The state of Karnataka, which houses Wistron’s iPhone plant and where Foxconn is set to build a new $700 million facility, passed legislation in recent weeks to allow for labor rule changes. Financial Times earlier reported about Apple’s lobbying in the state.
Other Indian states such as Andhra Pradesh, Gujarat and Uttar Pradesh, home to Samsung Electronics Co’s smartphone factory, will also possibly follow Karnataka and Tamil Nadu, two of the people told Bloomberg News.