by India is quietly wresting more manufacturing of iPhones and other electronics from Apple from China.
It is happening in the industrial areas of southern India, on muddy plots that were once farmland.
In Sriperumbudur, people call Apple “the customer,” without daring to say the name of a company that values its secrets.
But some things are too big to hide. Two gigantic dormitory complexes are rising from the ground. Once completed, each will be a compact block of 13 buildings with 24 rooms per floor around an L-shaped hallway. Each of those pink-painted rooms will have beds for six workers, all women. The two blocks will house 18,720 workers each.
It’s a ready-made scene from Shenzhen or Zhengzhou, the Chinese cities famous for their iPhone production prowess. And no wonder.
Sriperumbudur, in the state of Tamil Nadu, is home to the expanding Indian stronghold of Foxconn, the Taiwan-based company that has long played the largest role in producing iPhones. And as recently as 2019, about 99 percent of them were made in China.
India, as part of a national manufacturing drive, is reducing that dominance, as many companies look to extend their work to countries other than China. An estimated 13 percent of the world’s iPhones were assembled in India last year, and about three-quarters of them were made in Tamil Nadu. The volume produced in India is expected to double next year.
But despite nearly 10 years of a “Make in India” initiative promoted by the country’s powerful prime minister, Narendra Modi, manufacturing as a part of the economy has stagnated. At around 16 percent, it’s a little lower than when Modi took office in 2014, and much lower than China, or Japan, Taiwan and South Korea when those Asian tigers took off.
India desperately needs more skilled jobs, and factory work creates them like nothing else. Last year, India overtook China to become the world’s most populous country, and its working-age population is advancing rapidly. But turning that population growth into a real advantage means making India’s workers more productive. Half of them still depend on small agriculture.
Tamil Nadu could point the way forward. The state of 72 million people is making achievements that India as a whole has not. The national government began subsidizing electronics manufacturing across the country in 2021, sparking a gold rush in places like Noida, next to New Delhi.
But for Tamil Nadu, that incentive is not an essential attraction. TRB Rajaa, Tamil Nadu Industries Minister, can recite the state’s inherent advantages: schools, transportation, engineering graduates.
“We never compare our growth with other Indian states,” he said. “We look at the growth of the Scandinavian countries and how we can overcome it.”
Rajaa and other Tamil Nadu boosters are proud of the human capital their state has accumulated, and especially its women. Many of them work in formal jobs, while few women in other states do: 43 percent of all Indian factory employees work in Tamil Nadu, where 5 percent of the national population lives.
Some parts of Tamil Nadu are already working as industrial champions. A long belt of automobile and spare parts manufacturers stretches along the coast from its capital, Chennai. In the western Coimbatore valley, factories specialize in die casting and pump manufacturing. There is a knitwear cluster in Tiruppur and the country’s largest matchmaker is in Sivakasi.
It is surprising that India is diving into high-end products like the iPhone. India has never become internationally competitive in making things like T-shirts or sneakers, and smaller, previously less developed countries like Bangladesh and Vietnam have cleared its clock.
This is not the first time this century that India was expected to rise in the ranks of high-value electronics manufacturing. It is also not the first time that Tamil Nadu has seemed the best launching pad. In 2006, Finland’s Nokia, then a mobile phone colossus, built a large factory in the center of the government-planned Sriperumbudur industrial estate. It was supposed to make millions of phones a year, for India and the rest of the world. The smartphone and the 2009 global financial crisis dashed those dreams.
But the roots never died. Sriperumbudur was initially attractive because of his experience in automobile manufacturing. Hyundai was set up in 1996, shortly after India opened its economy to more foreign investment and Tamil Nadu formed its first state development agency. Glass manufacturing and basic electrical products followed. After a hiatus, Salcomp, a local company that makes high-end power chargers, redeveloped the former Nokia site, now for companies like Apple. The plants of a dozen other known and rumored Apple suppliers have sprouted up around it, along with Samsung, Dell and most other large multinational electronics companies.
On Friday, India’s Republic Day, Young Liu, CEO of Foxconn, was in New Delhi to receive the Padma Bhushan, the country’s third-highest civilian honor. “Let us do our part,” he said, “for manufacturing in India and for the betterment of society.”
A flourishing network of small, medium and large businesses contributes to the success of Tamil Nadu. One of them is Sancraft Industries in Sriperumbudur, a company with about $5 million in revenue that makes molded plastic parts for a handful of companies that power the iPhone machine.
Company founder Amit Gupta said Nokia had “brought the ecosystem here” and its Finnish engineers had done a lot to introduce global standards. His experience working with one of his first clients, Schneider Electric, a French company, taught him how to integrate its operations with newer arrivals from South Korea, Taiwan and China.
As home to an international supply chain, Tamil Nadu has attracted restaurants and grocery stores that cater to West and East Asian tastes. “It’s like a small version of China here,” said Gupta, who worked in Shenzhen 15 years ago.
In India and abroad, there is no shortage of excitement at the prospect of India supplanting China in at least part of global supply chains. Last year, Apple CEO Tim Cook appeared in India with his palms pressed in namaste and a vermilion mark on his forehead, inaugurating the country’s first Apple stores.
In total, more than 130 Fortune 500 companies do business in Tamil Nadu.
Sriperumbur’s electronics campuses look remarkably similar. Landscaped grounds and parking lots filled with dozens of white buses separate the low-rise assembly plants. Buses transport thousands of workers to and from their homes in villages 30 to 60 miles away.
Inside an Apple supplier, workers dressed in blue scrubs and surgical masks walked past banks of white aluminum-clad machinery on paths marked with yellow arrows taped to the floor. Low ceilings, long clear sight lines and signs urging good behavior in English and Tamil completed the effect.
There is more to come. Corning, the American glass maker, is setting up a factory that could produce the iPhone’s Gorilla Glass displays, and Vietnam’s VinFast Auto has announced a $2 billion facility to make electric vehicles.
Rajaa, the state industry minister, also doesn’t stop at $1,000 smartphones. He and other Tamil Nadu officials are trying to attract more companies that also make things cheaper and in larger volumes. If the rest of the country could follow Tamil Nadu, India might be able to produce enough of the lower-skilled jobs that its young, growing population needs.
Rajaa spent the first week of January delighting foreign investors with plans that included a budding new industrial group, focused on non-leather footwear. About 140 miles south of Sriperumbudur, Nike, Adidas and Crocs are just starting to roll off the lines in Perambalur.
