As Apple opens its first retail store in the country in Mumbai on Tuesday in the presence of its CEO Tim Cook, its factory in Chennai has emerged as the country’s largest employer in a single location in any sector, employing 35,000 people on the shop floor.
Operated by Vietnam’s Foxconn Hon Hai, the factory has achieved this feat in a short period of three years, as it was set up in 2018-19, and saw massive expansion after the smartphone production-linked incentive (PLI) scheme, which was announced by the government in April 2020.
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Company officials told FE that the average age of employees at the plant is 21-22 years, as for most of them this is their first job. The factory works in three shifts, which means every shift has more than 8,000 workers on the shop floor.
Cook, who will be meeting Prime Minister Narendra Modi during his visit starting Tuesday, is expected to apprise the PM of further scaling up domestic production of iPhones in the country. He will also be present during the opening of the company’s second retail store in Delhi on Wednesday.
Most other smartphone manufacturers such as South Korean major Samsung Electronics, Chinese firms like Vivo and Oppo, and Indian device makers such as Dixon, Lava and Micromax employ around 6,000-12,000 employees each. Samsung employs about 11,500 at its Noida factory.
The other key difference is that Apple has built its ecosystem in southern India, primarily Tamil Nadu and Karnataka, whereas other like Samsung, Vivo, Oppo, Dixon, Lava and Micromax, etc are, for the most part, located in the Noida/ Greater Noida region of Uttar Pradesh, bordering Delhi.
According to filings with the government — all PLI companies are required to file employment, production and exports data with the government to claim the PLI incentive — in the first year, Foxconn reached a total production of over Rs 7,500 crore. In the second year of the PLI scheme ended March 31, 2023, the factory produced iPhones worth over Rs 30,000 crore, of which nearly 50% were exported from India.
The factory is spread across 3 million sq ft with more expansion underway. Additionally, Apple also has two other vendors, producing iPhones under the PLI scheme — Pegatron in Tamil Nadu and Wistron in Karnataka. Together, the three companies produced over Rs 60,000 crore worth of iPhones, of which nearly Rs 40,000 crore were exported in FY23. Foxconn accounted for nearly 50% of the total production of iPhones.
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Apple’s expansion plans in India gained steam in 2020 with the announcement of the smartphone PLI scheme by the government during the year. However, soon, the government announced Covid-19 lockdowns which stretched from April to July that year. Since the five-year PLI scheme was to start in 2020 and end in 2025, Apple along with several PLI participants sought a shift in the scheme by an additional year owing to the lockdown. The government agreed, and the PLI scheme for smartphones is now valid for six years, of which the enlisted companies can pick up any five consecutive years to meet the incremental production and sales target and claim incentives. Apple’s vendors have picked up the 2021-2026 period.