States set to ease labour laws, lure multinationals

States, including Tamil Nadu and Uttar Pradesh, are likely to amend labour policies by allowing flexibilities such as 12-hour shifts and night-time work shifts for women, the official said on the condition of anonymity.

“Labour laws have been changed in Karnataka; some five to six other states like Tamil Nadu and Uttar Pradesh will also be making similar changes to their laws. This will facilitate companies like Apple," the official cited above said.

Last month, Karnataka amended its labour laws governing factories, allowing manufacturers to increase shift hours to 12 hours from the present nine. Women have been allowed to work night shifts; overtime hours have been nearly doubled to 145 over a three-month period, while maximum working hours have been kept at 48 a week.

The official added that central intervention is not required since states are taking action independently.

In March, Financial Times reported that Apple and its manufacturing partner Taiwan’s Foxconn were among companies pressing for alterations in legal frameworks to drive more productivity and efficiency in operations, similar to levels seen in production centres in China.

Flexible labour laws are among several demands by contract manufacturers like Foxconn, Pegatron and Wistron that assemble iPhones for the Cupertino-based smartphone maker in different locations. Foxconn’s manufacturing unit is located at Sriperumbudur in Andhra Pradesh, while Pegatron is located in the Kancheepuram district in Tamil Nadu, and Wistron is located near Bengaluru, Karnataka.

Apple chief executive Tim Cook, who is in India this week to open Apple’s flagship stores, is learnt to have reaffirmed the company’s commitment to invest in India and expand its manufacturing base here. The expansion in manufacturing could entail more units coming up in other states that offer a conducive environment and supporting policies, including that of investment and labour.

“If labour laws change, that means better prospects for more production because they (Apple’s manufacturers) have the capacity right in Tamil Nadu to make more iPhones and subsequently, that will add value and eventually, more numbers to contribute from India," said Tarun Pathak, research director at Counterpoint Research, which tracks handset and tech providers in India and globally.

Mint reported on Thursday that Apple has also sought support on continued policy predictability, to build suppliers and component ecosystems in India, and in employee skilling. During his meetings with top government officials on Wednesday, Cook is reported to have shared Apple’s business plans and plans to scale up local manufacturing.

Cook’s India visit marks an important milestone for the iPhone maker, which has pegged India as one of the leading growth markets and an increasingly important manufacturing base for its smartphones and a new base for making Airpods and even iPads, among other devices in the portfolio, as it attempts to reduce its dependence on China.

“Apple’s long-term strategy will not be just about iPhones. It will be more about iPads, Macs, AirPods and Apple Watches as well. So, this makes sense. The change of labour laws means more sync with other countries like China, where it is already doing round-the-clock production of its devices," Pathak added.

While Apple has been manufacturing in India since 2017, it has expanded the scale of manufacturing over the last couple of years while exporting nearly half of the total smartphone exports of approximately $10 billion to global markets.

Meanwhile, on Thursday, Tim Cook launched Apple’s second retail store in India at Select Citywalk Mall in Saket, New Delhi. The Saket store, though much smaller than the flagship store opened at BKC in Mumbai on Tuesday, houses all Apple products and facilities, including Apple Pickup and Today at Apple. The launch marked Cook’s fourth day in a week-long India tour plan.