India states reportedly wooing Apple suppliers by potential labor code relaxation

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

Following the labor code change in Karnataka, Apple is reportedly lobbying for another relaxation in labor laws in Tamil Nadu amid the competition among Indian states to woo investments from global manufacturers.

Bloomberg quoted unnamed sources saying that Apple was seeking changes in labor laws in India, and the government of Tamil Nadu was considering passing new laws that may allow factories to operate two 12-hour shifts instead of three 8-hour shifts a day.

According to the report, Apple and the Indian Cellular and Electronics Association (ICEA), an industry body formed by manufacturers, brands, and service providers in the mobile and electronics industry, had met with government officials from the government of Tamil Nadu to close the gap in labor law for manufacturing between China and India.

The rumor follows a similar development in which the Karnataka assembly approved the labor law relaxation in February to allow for two 12-hour shifts and permit women to work at night.

Located in southern India, Karnataka and Tamil Nadu are neighboring states connected by an industrial corridor between the states' capitals. Karnataka and Tamil Nadu are also primary production bases for Apple products in India and are often competing with each other for foreign investments.

Tamil Nadu may not be alone in considering passing new laws for labor code relaxation. According to Bloomberg, local governments in India are yielding to Apple's request as they are eager to attract iPhone manufacturers to their states. Foxconn, the world's largest electronics manufacturer, has manufacturing facilities in Tamil Nadu and Andhra Pradesh, and it is planning to make new investments in Karnataka and Telangana.

Apple Insider reported that other Indian states such as Andhra Pradesh, Gujarat, and Uttar Pradesh may follow Karnataka and Tamil Nadu with labor reforms.

States competing in a similar manner for foreign investment also happened in their bid for India's first wafer fab. The Vedanta-Foxconn joint venture, an applicant and front-runner for India's INR760 billion (US$9.2 billion) semiconductor and display fabs incentive scheme, decided to invest in Gujarat in western India before talking with other states, including Karnataka.