Apple, Foxconn Reportedly Get Their 'China Way' In India After Lobbying For Flexible Labor Laws In Key State

Apple Inc AAPL and its Taiwanese manufacturing partner Hon Hai Precision Industry Co., Ltd HNHPF, better known as Foxconn, were reportedly among the companies that successfully lobbied for changes in labor law in Karnataka, India.

What Happened: The development means that two-shift production can now take place in the Southern Indian state, which is similar to the practice followed in China — the two companies’ main manufacturing base, reported Financial Times, citing three people familiar with the matter.

Last week, Karnataka reportedly amended its factories act allowing for 12-hour shifts, which were previously capped at nine hours. It also allowed women to work night shifts. 

“India is due to become the next big manufacturing hub,” said an Indian government official, according to the report. 

“When we compare India with other countries . . . we have to increase by a big margin our efficiency in terms of increasing the work output.” 

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Why It Matters: The change in law will give Karnataka one of the most flexible working hours in India as the country pursues its ambition of becoming an alternative manufacturing hub to China, noted FT.

India’s central government and the states are reportedly offering incentives to investors in electronics and other sectors to woo them away from China.
Foxconn operates an iPhone plant in Tamil Nadu and has talked of expanding operations in Karnataka but has not specified if it plans to manufacture for Apple there. Apple’s smartphones are also assembled by Taiwanese firms Pegatron and Wistron in India.

Price Action: On Thursday, Apple shares closed 1.5% lower at $150.59 in the regular session and fell 0.1% in the after-hours trading, according to data from Benzinga Pro.

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