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In a move championed by investors such as Apple and its contract manufacturer Foxconn, the southern Indian states of Karnataka and Tamil Nadu have amended their laws to allow for longer working shifts, increasing them from eight to 12 hours.
Karnataka, where Foxconn plans to establish a major plant in Bengaluru, also introduced legislation in February to enable two-shift production and facilitate night work for women, who play a key role in electronics manufacturing in this region of Asia. In April, Tamil Nadu, where Foxconn already produces iPhones for Apple, passed similar legislation.
These reforms are occurring at a time when India is being praised as an emerging factory hub, ready to serve as a viable alternative to China as companies diversify their supply chains. Narendra Modi’s government actively seeks high-tech investments similar to those made by Apple in China and Vietnam, where flexible working hours are an attractive feature.
However, the push for more business-friendly working hours in India has encountered resistance. Tamil Nadu Chief Minister MK Stalin announced on Labour Day that he was putting the state’s legislation on hold due to protests from trade unions and opposition political parties. In Karnataka, Apple and Foxconn faced political setbacks after the Indian National Congress, an opposition party, triumphed over Modi’s Bharatiya Janata Party in a state election and vowed to repeal the factories law amendment.
This presents a challenge for Apple, Foxconn, and other companies hoping to establish India as a primary manufacturing location alongside China. India is a democracy with a federal system and vocal interest groups, unlike China and Vietnam where the ruling party can easily enforce their will on the bureaucracy. While Indian unions do not hold absolute power, they do have a voice for workers in the manufacturing sector. As a result, the future for Apple and Foxconn in India may be less predictable compared to their experiences in other countries.
Anirudh Suri, author of “The Great Tech Game,” emphasizes the need to update India’s labor laws if the country wants to attract tech manufacturing and compete with East Asian rivals. However, the socio-economic and political complexities of India often slow down progress in achieving these ambitions.
Supporters of deregulation argue that India’s economy struggles to create enough jobs and that decent factory work should be valued in a country where underpaid and informal work is prevalent. Critics believe that the Indian government’s push for economic reforms has been thwarted by powerful interest groups in the past, as demonstrated by the abandonment of three farm bills due to mass protests.
In contrast to China, India lacks the necessary infrastructure, such as worker hostels, to support a significant shift towards formal factory work. The Modi cabinet initially passed four labor codes in 2019-20 to overhaul India’s working conditions but postponed their implementation after the backlash against the farm laws in 2021.
If reelected after the next general election in 2024, the Modi government may revisit labor market reforms cautiously. For now, the future of labor laws and manufacturing in India remains uncertain.
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