India has high hopes for the manufacturing industry and hopes to turn itself into another manufacturing center besides China. It is currently actively expanding iPhone production capacity for Apple. But whether India's ambitions succeed may depend on how the country and foreign investors solve a glaring problem: finding enough workers in the right places.
Workers on mobile phone production line in India
In China, hundreds of millions of migrant workers have played a vital role in China's emergence as the "world's factory". Some multinational executives want India to become another manufacturing hub, but they are waiting to see whether Indian workers are equally willing to leave their hometowns and families for long hours in jobs where dormitory beds are their only personal space.
“When we started production in Shenzhen, all the workers came from far away places, so it was necessary to build accommodation for them from the beginning,” said a person close to Foxconn. Foxconn, the largest iPhone maker, said its manufacturing ambitions in India have expanded into new products such as electric vehicles.
India’s working model is unsustainable
However, India is a different story. "In India, the main employment model so far is to use shuttle buses to pick up workers from their hometowns. But as the scale of production expands, this model is unsustainable." said the person familiar with the matter. Foxconn declined to comment.
The scale of dormitories to be built in India is likely to be huge. Taking China as an example, the Zhengzhou iPhone factory is Foxconn's largest factory in the world, employing as many as 300,000 people at its peak.
Foxconn Zhengzhou employed 300,000 people at its peak
Because women play a key role in electronics manufacturing, providing them with housing is a particularly pressing issue. In older manufacturing hubs such as China and Vietnam, women make up a large portion of the electronics industry workforce. In these countries, worker dormitories, along with regulatory issues such as trade tariffs and labor laws, are key concerns for companies.
However, fewer women work in factories in India than in most Asian countries, due to commuting safety issues and the stigma against women's work in Indian society. However, once the number of female workers increased, the problem of accommodation became particularly pressing. "A series of regressive social and cultural norms restrict women from working in industry. But this also means that a huge opportunity has been created for women to work here." Radhicka Kapur, a professor at the Indian Council for Research on International Economic Relations, said.
Foxconn's "big construction project"
In Tamil Nadu, the heart of India's electronics industry, Foxconn's main factory assembles iPhones for Apple. A local government agency is building dormitories to accommodate about 18,000 women, a local official said. According to people close to Foxconn, all of these dormitories are expected to be used by Foxconn. In the coming months, Foxconn expects to complete construction of another dormitory in Tamil Nadu that can accommodate more than 20,000 workers.
Foxconn plans to build more dormitories in India, underscoring the company's expansion in the country and the obstacles it may face in the future. As of June this year, the company's total employees in India were only 50,000, far lower than the 700,000 to 1 million employees in China.
On Monday, Foxconn announced that it would spend about 128 billion rupees (about 1.5 billion U.S. dollars) to increase factory capacity in India, which is consistent with the investment amount given by the company's chairman Liu Yangwei at an investor conference in August this year. Liu Yangwei said at the time that the company would invest "billions of dollars" in India.
It is difficult to copy China
However, some industry observers have expressed doubts that Apple and its key suppliers will be able to scale production in India, in part because of challenges they face in housing workers and securing jobs for women. A person familiar with Foxconn's plans said: "A key condition for scaling up production in India is to provide adequate housing for workers."
Meanwhile, executives at Foxconn and other contract manufacturers in Taiwan have repeatedly said it would be impossible to replicate the mass production structures they build in mainland China in India or Vietnam, largely because workers in India or Vietnam are less willing to leave their families and live in dormitories.
"Generally speaking, Indians want to commute to work from home and go home to have dinner with their families after get off work. This work model will limit the production scale of any factory to tens of thousands of units." said an executive from Pegatron, another iPhone OEM.