India is planning to make changes to its labour regulations in order to facilitate global value chains to set up large manufacturing units that would employ between 40,000 and 100,000 employees.
The government is also likely to make changes to the production-linked incentives scheme for IT hardware in the next three months to attract more investments. This is part of concerted moves to ramp up domestic electronics manufacturing by over four times to $300 billion by 2025-26, including a 10-foldjump in exports.
“I discussed the issue of setting up manufacturing units, with a footprint of over 40,000 and up till 1 lakh, with the labour minister (Bhupendra Yadav) ,” communications & IT minister Ashwini Vaishnaw said.
The discussions have revolved around resolving labour, regulatory, housing and industrial zone issues. For example, such a large labour force cannot travel to work daily. It needs to be housed on campus, with the requisite facilities. Vaishnaw pointed out that campus housing as desired by the industry is not permitted under current laws.
In China, which is the hub of global electronics manufacturing, there are factories with as many as 400,000 living on the premises.
Vaishnaw said the labour ministry’s response was very positive. “The labour minister feels this is a highly doable thing and doesn’t require any major change in the legal framework or in rules,” he said.
Vaishnaw said he has received a commitment from Yadav that changes will be made to rules and regulations, or even the law, if required.
The industry has sought a housing/dormitory policy for such industrial units.
Also, the government needs to be mindful of potential law and order issues related to such a large gathering of workers, besides providing basic infrastructure such as hospitals. All this is required if India wants to scale up local electronics manufacturing to $300 billion worth of goods, from $67. 3 billion in FY20-21, says the industry.