Apple and Foxconn Labour Reforms Effort Results in 12-Hour Shift and Night-Time Work for Women in Karnataka State!
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Apple and Foxconn Labour Reforms Effort Results in 12-Hour Shift and Night-Time Work for Women in Karnataka State!
China’s loss is India’s gain!
The legislation led to the introduction of laws that now allows 12-hour shifts, as well as night-time work for women, similar to company practices in China, the report said. Apple has been shifting production away from China after the country’s strict COVID-related restrictions disrupted the manufacturing of new iPhones and other devices in the country and also to avoid a big hit to its business from tensions between Beijing and Washington. The report comes a week after the Karnataka government said that Apple Inc.’s iPhones would soon be assembled in the state and that a total of 300 acres have been set aside for a factory.
A Look at the Investment Plans!
Karnataka govt approves $968 mln investment from Foxconn unit
Foxconn, the world’s largest contract electronics manufacturer, has been in discussions with Indian states but had not announced any investment plans so far in Karnataka now from the latest development, it seems maybe they will narrow it down to Karnataka in all likelihood. The Apple supplier had won an order to make Air Pods and planned to build a facility in India to manufacture wireless earphones.
Foxconn’s Rs 8,000 crore mobile phone unit among 18 investments cleared by Karnataka’s high-level panel
The new plant that will come up on a 300-acre plot near the Bengaluru international airport will be Foxconn’s largest such unit in India and is expected to add about 100,000 jobs over the next 10 years.
Foxconn and Apple draw up plans to manufacture Air pods in India
As per officials aware of the details, the government is looking to provide some financial support to remove the disability that currently makes manufacturing Air pods in India much more expensive compared to China and Vietnam.
Bill to amend Factories Act set in motion
The state’s legislature last month passed a Bill to amend the Factories Act, 1948, proposing to increase the time an employee can work on the shop floor in a day to 12 hours from nine, with breaks. Without a break, it can be up to six hours a day.
Their successful lobbying for new legislation means two-shift production can take place in India, akin to the two companies’ practices in China, their primary manufacturing base. The law gives the southern state one of the most flexible working regimes in India as the country aims to become an alternative manufacturing base to China.
The state, a center for India’s tech industry, last week passed an amendment to its factories act allowing for 12-hour shifts, as well as night-time work for women, who dominate electronics production lines in China, Taiwan, and Vietnam, but are underrepresented 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.
Karnataka’s move is an attempt to seize the opportunity created by companies that are seeking to end an overreliance on Chinese manufacturing, following months of Covid-19 disruption that has shaken global supply chains.
The official said Karnataka had amended its labour law after “a lot of inputs” from Indian industry lobby groups and foreign companies, including Foxconn and Apple.
WAY FORWARD ….!
Notably, India has been making multiple exemptions for Apple in its manufacturing policies and all three major contractors of Apple have successfully applied for incentives under India’s PLI scheme.
Reports earlier this year stated that the Indian government may allow some of Apple’s Chinese vendors to set up manufacturing plants on a case-by-case basis in India.
It is also being said that due to the geopolitical tensions between China and the US, Apple has been steadily working towards moving most of its iPhone manufacturing to India.
Also, stringent COVID lockdowns in China that affected production at Foxconn facilities in China, which is the largest manufacturing unit for iPhones in the world, have also accelerated Apple’s plan to make a shift out of the country.
Noted Apple analyst Ming-Chi Kuo, last month, in a tweet, said Foxconn would accelerate the expansion of capacity at its India plant.
“As a result, iPhones made by Foxconn in India will grow by at least 150 percent on-year in 2023, and the medium/long-term goal is to ship 40-45 percent of iPhones from India (versus the current 2-4 percent),”
A report by JP Morgan in September said that Apple plans to shift 25 percent of its iPhone production to India by 2025 in a bid to diversify its manufacturing base which is currently depends heavily on China.
“Our ability to attract global value chains (GVCs) in electronics manufacturing is more a factor of our policies like PLI than just favorable geopolitics. Competitiveness including on tariffs, preparedness to build large-scale factories and accompanying labour reforms and ensuring investment sentiment remains high at all times are key to our success,” India Cellular and Electronics Association (ICEA) chairman Pankaj Mohindroo said.
“It’s a long haul,” he added. Apple is a member of ICEA,” said Mohindroo.
CONCLUSION – Launch of PLI scheme by the Indian Government.
The Indian government launched the PLI scheme for smartphones in 2020. It came around a time when US-China tensions were at its peak and several companies including Apple were looking for an alternative to China. It was then the three big Apple contract manufacturers successfully applied for incentives under this scheme
As per the guidelines of the scheme, global companies are required to make a cumulative minimum investment of Rs 1,000 crore over four years and are not required to make an investment in the last year.
Mere 10 days after the global launch, Foxconn’s factory in Tamil Nadu started manufacturing iPhone 14. Also, Pegatron is making the latest device in its production unit in Tamil Nadu.
In India, Apple is currently manufacturing iPhone SE, iPhone 12, iPhone 13 and iPhone 14 (basic) models. All the Pro models which are sold in the country are imported.
iPad production to move in India
Apple reportedly is looking to move the production of some iPads to India to keep its supply chain healthy amid Covid-related disruptions at its manufacturing unit in China.
A report by CNBC quoted sources saying that Apple has “talked to Indian officials about locating some iPad manufacturing in the country as US-China relations sour and China’s Covid crackdowns snarl supply chains.”
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Proprietary blog of Karma Global Tech Management LLC
This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection, and auto-generation from syndicated feeds and from various other sources, for its monthly newsletter Issue 10 of April 2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – Kush@karmamgmt.com / firstname.lastname@example.org