Apple of the manufacturing eye: iPhone manufacturing biggest blue-collar job generator

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If India is dovetailing its policies to become a manufacturing destination of choice of nations, it is not without demonstrable reason. According to a report by The Economic Times the manufacturing system that has been set up for manufacturing of Apple products in India has generated direct employment for more than 150,000 people since the start of the production-linked incentive (PLI) scheme for smartphones in August 2021.

Significantly, it has also turned into the country’s largest blue-collar job generator.

Incidentally, a recent report by International Labour Organisation has emphasised the primacy of the manufacturing sector in India as a means to offer livelihood to the huge number of youth who would join the growing labour force in the country.

The majority of the youths are first-time job seekers and they are in the age group of 19-24 years, government officials told the newspaper. According to estimates, apart from direct employment, the Apple network has benefitted about 300,000 persons indirectly. The numbers are quantified since the companies that become eligible for the PLI scheme have to submit job generation data to the government.

Apple has provided direct employment to about 3,000 persons in India, while the iOS app development supports more than 1 million jobs, officials claimed. Besides this, a lot of employment is also provided by contract manufacturers and suppliers. “Overall, the Apple ecosystem is likely to have created over 4 lakh jobs (directly and indirectly) in the last 32 months,” an official told the newspaper.

India has become one of the focal points of Apple. After suffering a decline in the US and China, Apple has increased its focus on India, the world’s second-largest smartphone market. It had kicked off the manufacturing journey of iPhones in India quietly in 2017 and subsequently scaled up output in step with the PLI scheme. Its suppliers are contract manufacturers Foxconn, Wistron and Pegatron. The Apple ecosystem also consists of a rising number of components that are also manufactured in India.

The India unit of Wistron marked the entry of the Tatas into contract manufacturing for Apple. The Tata group took over the Wistron unit from its Taiwanese owners. These three contract manufacturers created more than 77,000 direct employments. Foxconn was the leader with 41,000 jobs. Wistron absorbed 27,300 and Pegatron 9,200. Foxconn and Wistron are in the third year of the PLI scheme, Pegatron is in its second year.

Experts projected that iPhone factories are set to employ more than 10,000 people directly in the peak June-September period, when production will swell to full three shifts to meet global demand for the next model.

The company launches new models typically in September. Production of iPhones in 2023-24 was valued at more than Rs 1 lakh crore in February. But the market value of these phones would amount to Rs 1.6 lakh crore, inclusive of the taxes and dealer margins.

Apple has not only complied with its PLI targets but far exceeded them, said the report, perhaps turning the brand into the largest phone manufacturer in the country by value. Apple’s strategy appears to be building a big ecosystem of suppliers and manufacturers in India in order to engineer a long-term decrease in dependence on China, where the largest number of iPhones are currently manufactured.

The suppliers are based across the states of Karnataka, Tamil Nadu, Uttar Pradesh, Haryana and Andhra Pradesh. Apart from the three contract manufacturers, over 70,000 new direct jobs have been created by this fast-growing Apple supplier ecosystem, officials added.

According to data submitted to the government Apple suppliers including Tata Electronics, which makes enclosures for iPhones at its Hosur facility, and Salcomp Technologies, which produces enclosures and power adaptors are big employment generators. This list also includes Foxlink and Sunwoda that manufacture cables and batteries for iPhones. Apart from these, several thousand new jobs have been created by Avary Technologies, CCL Industries and Flex – all of which supply iPhone sub-assemblies and components.