Apple to move half of its supply chain from China to India, employ 5 lakh people in 3 years

Apple, who have already created 1,50,00 direct jobs through its ecosystem, plans to employ about 5,00,000 people in the next three years. Image Credit: Apple

As it continues to distance itself from China and invest in India, Apple plans to relocate at least half of its existing supply chain from China to India over the next three years. In the process, Apple, will also significantly increase the jobs that it offers in India.

As per a report by the Economic Times, Apple aims to employ at least 5,00,000 people directly in India’s ecosystem of component makers and suppliers, marking a substantial increase from the current level.

Currently, Apple is responsible for just about 1,50,000 blue-collar jobs in India, the highest by a single company.

The move away from China is part of Apple’s ongoing strategy to reduce its reliance on China and increase local value addition from its Indian suppliers. The strategy is famously called the China Plus One policy.

Among all countries, it is in China that Apple has the highest domestic value addition in the world, which is 28 per cent. The value-add in India currently is about 11-12 per cent which is expected to go up to 15-18 per cent.

Experts predict that India’s growing importance as a market for both exports and local sales of Apple products will catalyse a vibrant supplier ecosystem and potentially position the country as a hub for research and development for Apple, especially in software-to-silicon design.

Neil Shah, vice president at Counterpoint Research, noted that India’s current local value addition to iPhone manufacturing stands at 14%, compared to 41 per cent in China. However, with the right investments and expansion, Apple could increase this figure to over 20 per cent, as per the ET report.

Apple’s suppliers in India, include Tata Electronics, Salcomp Technologies, Foxlink, and Sunwoda. All of these companies have emerged as top job creators, with estimates suggesting that at least 1,50,000 direct jobs and an additional 3,00,000 indirect jobs were created since the production-linked incentive or PLI was introduced in August 2021.

Contract manufacturers such as Foxconn, Wistron, and Pegatron, which produce iPhones in India, have also significantly contributed to job creation in the country.

Last year, these manufacturers collectively created over 77,000 direct jobs, and have plans to hire more than 10,000 additional employees during peak production periods.

Apple’s increased focus on manufacturing in India is evident in its production numbers, with iPhones worth over ₹1 lakh crore produced in India in the previous year, a substantial increase from previous years. Tim Cook, CEO of Apple, highlighted the company’s strong performance in emerging markets, including India, during the recent earnings call, emphasizing robust double-digit growth and record-breaking sales figures in several countries.