As global manufacturing companies, especially Apple suppliers, are moving into India for diversified production, they are beginning to re-shape India as a regional production hub which requires a long list of reforms.
Since Narendra Modi was sworn in as India's prime minister in 2014, he has launched initiatives such as 'Make in India' and 'Atmanirbhar Bharat' (self-reliant India) to try to boost the manufacturing sector to account for 25% of India's GDP. However, World Bank data shows that manufacturing generated less than 14% of India's GDP in 2021.
Despite massive investments in recent years to capitalize on India's huge market and lucrative incentives amid the geopolitical tension between the US and China, India still has challenges to overcome before becoming the next world factory.
The development that Apple and Foxconn reportedly convinced the government of Karnataka to relax its labor laws to allow 12-hour shifts and permit women to work at night may be the beginning, according to Financial Times.
Suppliers of Apple, an ESG-focused company that periodically publishes its Supplier Responsibility report, may also help transform India, where most people work in the economy's informal and unorganized sectors, which lack effective regulation. Kartik Narayan, CEO of TeamLease Services, told The Economic Times that Apple and its suppliers are expected to generate 100,000 direct and 200,000 indirect jobs in India by fiscal year 2026 (April 2025 to March 2026).
India still has to revise its methodology of collecting and compiling industrial data. Bloomberg reported that India's statistics bureau has relied on a fixed set of companies for measuring its industrial output and has not refreshed its base year, currently fiscal year 2012, for calculation for years. The report notes that the data does not even include iPhone production, which started in 2017, and solar panel production, leaving the industrial data practically meaningless and out of sync with what is happening on the ground.
India must implement many reforms for it to rival China in manufacturing. Besides the labor market and the methodology for industrial data, CNBC reported that India's longstanding hurdles to overcome include a formidable bureaucracy, lagging infrastructure, and labyrinthine red tape.
