Foxconn, A Landmark In Modi’s “Make In India”
Taiwanese electronics giant Foxconn has committed to investing US$ 5 billion in manufacturing facilities and research and development units in Maharashtra, in what is not only set to be a landmark deal for the Narendra Modi government’s “Make in India” initiative but also among India’s biggest ever FDI announcements. Foxconn may not (yet) be a household name in India, but it has over the past few years established a global reputation as perhaps the most key supplier for Apple products, from iPhones to iPads. Foxconn, also known as the Hon Hai Precision Industry Company to give it its proper name, is the world’s biggest contract manufacturer for electronics by some margin, according to industry estimates.
For a company that works in the high-tech domain, its production model has been strikingly labour intensive (hence the one million-plus workers). What’s made Foxconn so successful is its scale and efficiency. Foxconn’s “factory town” model has, above all else, enabled its success, dependent on the stream of migrant workers who have over the past two decades joined China’s workforce from the countryside.
The success of this model has also been dependent on paying workers low wages, demanding long shifts and imposing what critics have described as an unforgiving work environment. Indeed, Foxconn has come under persistent criticism for its treatment of workers. More than a dozen suicides by workers two years ago brought global criticism and forced Foxconn to change its work environment. An audit by a labour rights association uncovered widespread violations of health and safety rules and working hours. Apple’s audits have also found similar violations, but the US company has also received its fair share of criticism for not exerting enough pressure on its biggest supplier to change its ways. Defenders of the Foxconn model counter that despite the bad press, it has remained a much sought-after employer for young Chinese joining the work force. As much as the Modi government might like to look at the Foxconn deal as a vote of confidence for its “Make in India” initiative, Foxconn’s decision is likely motivated in equal measure by pressures in China that are necessitating a change in the Foxconn factory town model.