Apple is increasing its manufacturing presence in India by ramping up hiring and investment to avail the benefits of the govt’s production-linked incentive (PLI) scheme.
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Apple And Partners Increase Hiring
Foxconn and Wistron, which manufacture for Apple, have surpassed their year one (FY21) investment target of Rs 250 crore each and have also scaled up hiring.
Both hired 7,500 workers each after August 2020 which is when the smartphone PLI scheme became active.
Further down the chain, Sunwoda, Foxlink, Salcomp and others provide inputs to Foxconn and Wistron.
They have accelerated their hiring as well, having inducted 5,000 new people to work in manufacturing.
All these figures combined takes Apple’s network of companies and employees hired to 20,000.
Pegatron, another of Apple’s contract manufacturers, has committed to hiring 6,000-7,000 new employees once it comes to India. .
It will also be eligible for benefits under the PLI scheme.
Issues
It has been said that contract manufacturers were planning on rapidly hiring, however these plans had to be put on hold due to the second wave of the pandemic.
It will resume as the vaccination drive progresses throughout the country.
Wistron was almost 9,000-plus employees strong by December 2020.
However they ran into trouble as their laborers protested against them and many were dismissed.
It began hiring again from March 2021 but struggled as the second wave hit India.
PLI Scheme Conditions
The govt said about the PLI scheme in April 2020 that it could create 2 lakh direct jobs in the next 5 years.
Indirect hiring could see a surge of nearly 3x the size of direct jobs.
Rs 15,000 crore is the limit if one is to gain the scheme’s benefits, whereas the minimum threshold is Rs 4,000 crore.
Companies Move To Govt
While these manufacturers met their investment target of Rs 250 crore in their first year, they failed to reach the incremental sales target of Rs 4,000 crore due to the pandemic.
The companies have asked the govt to declare the first year as zero year and extend the final year of the scheme from the end of FY25 to FY26.
They have pleaded to retain the outlay, investment, sales targets and incentive structure without any changes.
The govt will likely accede to their demands and may modify the scheme so that the companies do not lose out on the financial incentives due to failure of reaching the first year incremental sales target.
Samsung Only One To Achieve Targets
Presently, Samsung is the only one out of 10 others under the PLI scheme to have qualified for the incentives for the first year, which is Rs 900 crore (6% of Rs 15,000 crore).
This was aided by Samsung’s established manufacturing presence in India which helped them earn incremental sales of Rs 15,000 crore.
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