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Apple seeks changes in India labor laws in push to diversify beyond China

Apple Inc. is seeking changes in India’s labor laws as part of its effort to expand local production, and regional governments are yielding to its request as they are eager to snatch iPhone assembly from China.

India’s southern Tamil Nadu state, where Apple’s top supplier Foxconn Technology Group operates India’s largest iPhone plant, is considering passing new rules that will make factory shifts more flexible, people familiar with the matter said.

Executives from Apple and the Indian Cellular and Electronics Association lobby group — which represents the US company as well its suppliers such as Foxconn, Pegatron Corp. and Wistron Corp. — met with state government officials over six months to push for the reforms, the people said, asking not to be named as the discussions were private. The planned changes would bring local working hours on par with the iPhone factories in China, they said.

The moves are part of Apple’s effort to shift more production away from China to countries including India. Prime Minister Narendra Modi’s local manufacturing push, financial incentives and India’s relatively cheaper labor have led Foxconn, Pegatron and Wistron to ramp up in the South Asian nation.

Representatives for Apple, Foxconn and the Tamil Nadu government didn’t immediately respond to requests for comment. Pegatron and Wistron representatives declined to comment.

Labor law reforms in India are rare, and the country’s willingness to now accommodate Apple underscores how badly it wants to become an electronics manufacturing hub. The suggested changes include allowing factories to operate two shifts of 12 hours each, instead of the previous three shifts that each went on for eight hours.

Local officials are keen to attract the business and jobs that the world’s most valuable tech company represents. The envisioned changes could also encourage more women to work in factories. By having more flexible shifts, women could avoid commuting on night buses — often seen as an unsafe option. Apple and its suppliers are also in talks to build large working women’s hostels in and around factory complexes, which would reduce travel time, two of the people said.

“These reforms are overdue and at the heart of Make in India program’s policy objectives,” the ICEA lobby group said. “It helps bring more women with safety and comfort into work environment like never before.”

The state of Karnataka, which houses Wistron’s iPhone plant and where Foxconn is set to build a new $700 million facility, passed legislation in recent weeks to allow for labor rule changes. Financial Times earlier reported about Apple’s lobbying in the state. Bloomberg

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