The Indian state of Karnataka is changing its labor laws after lobbying by the companies that want to start making iPhones in the area. The Financial Times is reporting factories will be able to have 12-hour shifts, as opposed to 9 hours previously, and night shifts will be able to accommodate female workers. Production lines in China, Taiwan, and Vietnam are dominated by women, but that’s not the case in India. Maximum working hours at 48 per week, but overtime hours are expanded to 145 over a three-month period, from 75 previously.
There is an expectation that women workers on late shifts will receive secure and safe transportation to and from work, and even though this relaxation of labor laws is supposed to help companies like Foxconn, the company has not officially announced its intentions to make iPhone in the region, yet. Maybe it was just waiting for the working environment to match its expectations. It is also unlikely that Apple will have had no part of the legislative agenda for manufacturing in India, as sensitive as it is about perceptions about its business practices.
Foxconn and Apple may have worked things out on how to maximize productivity and drive workers without putting them in harm’s way. Disgruntled Indian workers may have more ways to resist unreasonable demands by an employer than those in China, but that’s going to vary by location and by the nature of the political climate. What will probably end up happening, as it did in offshore software and hardware development brought to India, is the market will be more competitive for talent, and that may create its own labor dynamics, something no law can stop.
In other words, while India is forging ahead to increase its manufacturing base, it is becoming ever more attractive for businesses looking to put their factories somewhere other than China. The country is a ground-floor opportunity today, but it won’t be for long. The Chinese may be diversifying their operations to avoid sanctions against China, and buyers like Apple are more than glad to support any moves, but it’s going to take time for the country to be competitive. Who knows what’s going to happen to Chinese manufacturing by then.
On the other hand, smaller, more nimble companies can use this opportunity to invest in a competitive workforce, a lot of tax breaks, and the ability to find offshore product lines that will probably match anything coming out of China.
