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Apple Wants Changes In India's Labour Laws To Diversify Its Factories Beyond China
Allowing more overtime and allowing factories to run two 12-hour shifts instead of the previous three eight-hour shifts are among the proposed changes
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Apple is requesting changes to India's labour laws as part of its effort to increase local production and regional governments are acceding to its request as they compete with China for iPhone assembly.
According to people familiar with the situation, India's southern Tamil Nadu state, where Apple's top supplier Foxconn Technology Group runs the country's biggest iPhone plant, is contemplating new rules that will make factory shifts more flexible.
Executives from Apple and the Indian Cellular and Electronics Association lobby group — which represents the US company as well as its suppliers such as Foxconn, Pegatron and Wistron — met with state government officials over a six-month period to push for the reforms, according to the people, who did not want to be identified because the discussions were private. They claimed that the planned changes would put local working hours in line with those at Apple's Chinese factories.
The changes are part of Apple's attempt to shift production away from China and towards countries such as India. Foxconn, Pegatron and Wistron have increased their presence in India as a result of Prime Minister Narendra Modi's local manufacturing push, financial incentives and India's comparatively lower labour costs.
“India wants global brands like Apple to make India a home for manufacturing and R&D,” India's deputy technology minister Rajeev Chandrasekhar told Bloomberg News. “The federal government is working closely with states to develop competitive policies in areas such as labour, logistics, and infrastructure, which will aid in the acceleration of the shift of the electronics supply chain to India,” he added.
Labour law reforms are uncommon in India and the country's readiness to accommodate Apple now demonstrates how desperately it wants to be an electronics manufacturing hub.
Allowing more overtime and allowing factories to run two 12-hour shifts instead of the previous three eight-hour shifts are among the proposed changes.
Changes in the works could also inspire more women to work in factories. Women could avoid travelling on night buses, which are frequently regarded as dangerous. According to two of the sources, Apple and its suppliers are also discussing the construction of large working women's hostels in and around factory complexes, which would decrease travel time.
Foxconn, Pegatron and Wistron employ roughly 60,000 people in India. Women aged 19 to 24 make up a sizable proportion of that total.
“In electronics manufacturing, women are a natural fit due to the hygienic environment and the roles in the units,” ICEA said in a 36-page recommendation document seen by Bloomberg News that it filed to the Tamil Nadu government. “Women have superior manual dexterity, which is required for high-precision electronics assembly,” says one expert.
The state of Karnataka, which is home to Wistron's iPhone plant and where Foxconn plans to construct a new USD 700 million facility, recently passed legislation allowing for labour rule changes. The Financial Times previously reported on Apple's influence in the state.
Other Indian states, including Andhra Pradesh, Gujarat and Uttar Pradesh, which are home to Samsung Electronics’ smartphone factory, may follow Karnataka and Tamil Nadu, according to two of the individuals.