The TLDR: When Apple manufacturer Wistron set up shop in Narasapura, Karnataka, local residents were excited and proud. But a worker riot has shattered those dreams, and many are now instead in jail. The clash at Wistron reveals the tension between aspiration and reality of an atmanirbhar Bharat that will supply products to the world.

Tell me about this riot

On December 12, workers went on a rampage, smashing windows, destroying assembly lines and burning cars at the factory. The police has since arrested 150 contract workers and are looking for 5,000 more—many of whom have gone into hiding. Wistron first claimed it had suffered Rs 4.37 billion in damage, but has since revised its estimate to Rs 260-520 million. 

Wistron is…?

The Taiwanese company is one of three Apple manufacturers in the country—along with FoxConn and Pegatron. It also manufactures products for Lenovo and Microsoft in India. The Narasapura factory was set up in July this year with an investment of Rs 30 billion. It makes iPhone SE models and employs 1,400 full-time employees and 8,500 contract workers. Wistron plans to eventually employ 10,000 workers at this factory. The riot involved only contract workers—who are enraged at the management.

Irony alert: Wistron’s India head was recently appointed as chairman of a newly formed committee of The India Cellular and Electronics Association—which aims to review labour policies “to achieve maximum benefit for both the employees and employers.”

Why did they riot?

The workers: Most were hired via word-of-mouth from nearby villages—whose residents have scrambled to take jobs at the “iPhone company.” Others are migrants from Andhra Pradesh and Tamil Nadu. As Mint notes:

“The promise of a steady job and Rs 20,000 in monthly salary was a dream come true for many such workers from poor families, educated in rural colleges and with parents working as daily wage labourers.”

The employers: It is important to underline the fact that these contract workers were hired not by Wistron but seven contractors who supply labour. And this detail has become key to the blame game. 

The working conditions: Two state department reports now confirm what the workers have long alleged:

• While promised Rs 20,000 as salary, the workers were paid far less—anywhere between Rs 8-13,000 a month.
• Salaries were not paid on time, and delayed by several months. 
• The work schedule was punitive: “We got just one thirty-minute and three 10-minute breaks in our 12 hour shifts,work six days a week.”
• They were promised an extra Rs 300 a day if they gave up their breaks or worked on holidays—but were never paid. 
• There are also reports that they were assaulted by company staff, and lathi-charged by the police as they queued up to punch in their attendance.
• Also this: “An inspection by local authorities on December 12 has found that staffing agencies had denied appointment letters, contracts and denied requests for salary slips among other findings.”

The blame game: Wistron says it had no knowledge of such issues at the factory, and has paid its contractors in full to cover worker wages. But the workers insist that they were given the runaround by both when they complained: “We went to the contractor on Saturday who then sent us to the company, and both were not telling us who was responsible for the discrepancies, which fuelled anger."

That said, initial reports suggest six of the seven Wistron contractors may have siphoned off the lion’s share of the wages paid to workers by the company.

What does the government say?

Responding to the violence, CM BS Yediyurappa has come firmly down on the side of Wistron, saying he will personally make sure that the factory is up and running in 15 days:

“These things (violence at Wistron) should not have happened and the Prime Minister is also very much worried about this development. We have given proper instructions (that) such things will not be repeated. We will give full support to that company, without any problem let them continue production.”

He has not said a word about the workers or their working conditions despite his own state departments’ findings.

Also this: The police’s entire effort is focused on tracking down and punishing the rioters. They have formed ten teams that are working overtime: “Police are using technology like mobile tower triangulation, WhatsApp group messages and examining footage from over 450 CCTVs to identify the culprits.” 

Why is this a big deal?

Because the Wistron factory is critical to both the state and Union government. 

Karnataka: In August, the government announced a New Industrial Policy that targets raising  the value of mobile manufacturing in the state to Rs 300 billion by 2023—which in turn is expected to create 1.2 lakh jobs. At the time, Wistron MD praised it as a “very forward looking policy which addresses several crucial labour reforms.” Key point: Wistron has promised to raise its headcount in the state to 20,000 by the end of the next fiscal year.

The Union government: In October, the government announced something called Production-linked Incentive (PLI) scheme—aimed at encouraging electronics manufacturing. 

• Sixteen companies were approved under this scheme. Of these 11 were mobile manufacturers, including the three Apple suppliers: Wistron, Foxconn and Pegatron. 
• The aim: offer revenue incentives to attract manufacturers who want to shift production out of China. 
• This will bring in foreign investment, create jobs, and boost ‘Made in India’ exports—as 60% of the products manufactured by these companies will be sold overseas. 
• The expected value of this boost in domestic production: Rs 10.5 trillion, of which, Rs 9 trillion will come from the mobile manufacturers alone.

The Wistron violence is therefore inconvenient for many reasons:

• It comes right on the heels of a big-bang PLI announcement—and may make other foreign companies skittish about moving to India at a time when the government wants to expand the scheme to other sectors like pharmaceuticals.
• The three Apple contractors plan to invest up to $850 million in India over the next five years under the PLI scheme.
• And the Taiwanese trade council has already signalled its displeasure to the government—demanding its support as the labour unrest has “caused a flutter among the investor community.”

The Apple angle: There is plenty of scepticism in Silicon Valley circles about Apple’s efforts to shift manufacturing to India. The Information notes that foreign companies are wary of India’s “legacy of protectionist trade policies and bureaucratic interference.” But labour issues don’t help either. 

Apple has launched an investigation into working conditions at Narasapura—to check if they meet its standards for health, safety and environment. Previous such investigations have not turned out well:

“For example, one Indian supplier Apple approached in 2018 was Superpacks, which operated a packaging factory in Bangalore. Apple sent auditors to assess whether its supplier responsibility practices were up to Apple’s standards. The audits revealed dozens of violations. The site had no safety measures for storing chemicals, lacked monitoring for noise and wastewater, and didn’t have several environmental and construction permits. It didn’t properly test drinking water for workers and the site lacked a fire hydrant system, according to a person close to Apple.”

Point to note: Apple suspended its relationship with Pegatron after uncovering similar labour violations in China. Interestingly, it has not affected its expansion plans in India: “This is unlikely to affect Pegatron’s India plans and the iPhone maker is still in deliberations with various state governments on where to set up its India manufacturing facility,”

Reading list

Mint has the best read on the riot and its fallout—plus this recent overview on iPhone’s ‘Make in India’ strategy. Indian Express explains why the government is worried about the riot in Narasapura. The Information offers a sceptical view of Apple’s plans in India. Ars Technica explains how Apple’s product strategy is designed to encourage labour exploitation. New York Times offers an overview of labour issues of Apple manufacturers around the world.