April is generally regarded as the start of summer – scorching at that every year – in India. This year, the month also witnessed two important events tied to the country’s avowed economic transformation.
The first event was the passage of legislation in Tamil Nadu that amended the Factory Act of 1948 to extend the working hours per day from 8 to 12. Similar legislation was passed in February in Karnataka. The passage of these legislations in the first place, which led to anger and outcry among trade unions and labour support groups, are attempts to weaken labour protections for the sake of attracting transnational corporations. However, following strong opposition by alliance partners and trade unions, the Tamil Nadu Chief Minister announced the withdrawal of the passed legislation.
The second event in April, publicised with much fanfare, was Apple’s opening of its first two retail stores in India – in Mumbai, followed by in Delhi – with Tim Cook himself in town. This follows his statement last year, expressing bullishness regarding the brand’s business prospects in India, trumpeted as a shot in the arm of India is well and truly in the race to parallel China, if not completely eclipse it.
In response to rising labour costs, supply chain disruption and labour unrest, Apple and Foxconn have tried to diversify their manufacturing facilities to other geographies away from heavy dependency on China. This China+1 strategy has seen India vying to host Apple-Foxconn, along with other electronics brands and Taiwanese suppliers such as Wistron and Pegatron.
From meetings with India’s prime minister to the central government coordinating with state governments to pull out all stops, laying out the Production-linked Incentive Scheme, to different state governments competing to offer attractive incentives and infrastructural resources, securing investment from Foxconn and other multinational companies has received top priority from the Indian government.
Foxconn has been able to embed itself in South India, with the state of Telangana being the latest entrant in the manufacturing map. For years, Foxconn has had a stable base in Tamil Nadu. And, as part of their Corporate Social Responsibility obligations, they have also made significant financial contributions to the state government’s educational initiatives. All these resemble the symbiotic relationship between Apple Foxconn and the government.
This reached a crescendo with the announcement of Foxconn’s collaboration with Vedanta through a joint venture to manufacture semiconductors, even though doubts persist on the capabilities and skills of both entities in this regard.
The nation-state narratives about India and China, centering on their geopolitical competition and itinerant border tensions, tend to emphasize differences and divergences more than convergences and parallels. There are admittedly vast differences in their political and social systems. But recognising points of convergence allows us to more fully explore their trajectories in all their complexities.
Under its Make in India initiative and the Production Linked Incentives scheme, the Indian government aims to turn the country into a manufacturing hub like China. Indian policymakers are increasingly looking to copy the China playbook to shape the country’s growth and development.
Indeed, fascination with China is a trend among the mainstream political left and right in Indian politics. For the left, China presents a ‘socialist’ alternative under the leadership of a communist party, and for the right, it sees the achievement of high-scale development through disciplining and repressing dissent.
Developmental Trajectories
It is worth tracing the two countries’ political-economic journeys as modern nation-states beginning in 1947 and 1949, respectively, the role of the state and adoption of public policies, economic transition through the adoption of pro-market reforms, state-society relations and their interface with globalisation. There are more similarities than often acknowledged.
From inheriting largely rural, agrarian societies, to seeking similar goals for their population in terms of development and industrial modernisation or adoption of command planning strategies, there are striking patterns of convergence between India and China.
One prominent aspect in this comparison is the global neoliberal turn from the latter half of the 1980s and the restructuring of labour.
The advent of market reforms, along with the state’s retreat from an interventionist role, is predominant in labour relations for both India and China. Despite minor variations, the changing nature of the state-labour relations and the declining power of labour as a political subject is conspicuous across the spectrum. Efficiency, competition, and profit maximisation undergird the neoliberal regime that is reflected in both countries’ economic systems.
Flowing from this, the state’s relationship with labour is very calculative and is rooted purely in the extraction of value. Furthermore, labour has been rebranded as human resources to suit global corporate ecosystems. Along with this, the increasing demands for investing in ‘human capital to develop a person’s full potential’ that are gaining currency are aimed at developing an employable workforce.1 These global changes have played out – and continue to play out – in both China and India.
‘Socialism with Chinese Characteristics’ may continue to hold ground as a political-ideological euphemism, but capitalism is living reality in China’s economic transformation. The Chinese Communist Party (CCP) – even while transforming from a revolutionary party to a governing party – has unfailingly kept reiterating its primary identity as the vanguard of the country’s working class to legitimise its longevity in power.
In both countries, the faultlines of breakneck economic growth and development have led to rising inequality and ecological degradation, thereby binding both countries. Both countries were also similarly ‘engaged in targeted interventions to provide safety nets for the poor’.2
Labour Restructuring
The intensity of the high-speed reform while recasting workplace relations and labour politics in China has led to high costs for labour. Precarity and exploitation have signified workers’ social lives and led to sharpening conflicts between labour and capital, both domestic and foreign. Post reforms, the ‘industrial citizenship’ has collapsed in China, and labour – once a fundamental class in the country – has been politically ‘disenfranchised’.3
Similarly, in India the onset of reforms from the early 1990s, while opening new opportunities and championing aspirations for the rise of a very mobile middle class, has restructured employment and workplace relations. Similar to the dismantling of China’s ‘Iron Rice Bowl’ – permanent employment with a range of benefits for the employees – the workplace ecosystem in India is replacing permanent employment with limited-term contracts.4
Furthermore, different work arrangements are now in place in not just labour-intensive manufacturing, service sectors and blue-collar work but even white-collar professions. In essence, informalization of employment has embedded precarity as a norm in Indian workplaces.
While the public sector in India continues to hold privileged status and gaining employment within it remains highly competitive in view of the reduced size of the cake, management, on the whole, has been increasingly vocal about reducing labour costs – this is by altogether jettisoning the obligations of employment protection and discouraging non-production related encumbrances.
On top of it, the avowed demographic dividend of India that the government leaders and policymakers take immense pride in and keep their bets on is also losing its sheen. Due to the bleak employment scenario that has now turned chronic, disillusioned young people are quitting the job market altogether. The increasing precariousness of employment has also coincided with the declining political power of labour unions.
As a political democracy with constitutional guarantees of freedom of expression and organising, India has a multitude of labour and civil society organisations, including trade unions and other labour groups. Yet the Indian working class continues to wage defensive battles.
Pandemic as Labour Control and Resistance
The COVID-19 pandemic exacerbated the precarity, and the labouring masses bore its heavy costs. In addition to concerns and anxieties surrounding health and hygiene, economic slowdown and work stoppages due to lockdowns further heightened the financial distress.
The brutal national lockdown implemented at short notice during the first phase of the pandemic in India and the resultant exodus of migrant labour from Indian cities are heart-wrenching images memorialised in time. Similarly, the closed-loop system of production in operation in factories and industrial facilities in China – and workers’ fraying patience resulting in forceful breakouts – under the Party-state’s brutal Zero-Covid strategy is yet another lasting stark image of the pandemic.
During the first wave of the pandemic in 2020, the Government of India ramrodded the contentious labour codes through the parliament – the Code on Wages was passed in 2019 – without any serious, substantive social dialogue and consultation with the main stakeholders, the workers. This was after a series of dilutions in labour laws by different state governments during the lockdown.
The government’s stated rationale for amalgamating 29 national labour laws into the four labour codes – Code on Wages, Code on Social Security, Code on Occupational Safety and Health, and Code on Industrial Relations – is administrative streamlining and simplification of the purportedly complex regulations along with creating a business-friendly environment for investment and augmenting growth.
In effect, the four codes have weakened the labour protection architecture, and undermined collective bargaining. Moreover, the labour codes do not systematically address the migrant worker crisis during the lockdown, sidestepping its systemic and structural reasons.
In contrast to the overdrive in rushing through the legislative process, there has been lethargy and ad-hocism when framing rules and regulations under the laws. Furthermore, it seems that electoral and political compulsions have forced the government to delay the nationwide roll-out of the codes until the completion of the 2024 general election.
There has been substantial pushback by labour against onslaughts and anti-worker policies during the pandemic. It is well to recall that in some ways, the foundation for the protests against CCP’s Zero-Covid policy, forcing a roll-back, was laid by the workers at the Foxconn facility in Zhengzhou, Henan province. In both China and India, food delivery workers have strived to move the needle and challenge algorithmic bosses through innovative ways.
Mirror Images
As transnational corporations outsourced their production, there has been tremendous competition among countries in the Global South to attract these investments. Governments in the Global South provide companies with infrastructure, resources and incentives to embed their production facilities in their territorial jurisdiction.
China has had a first-mover advantage, with local governments competing to offer preferential policies to attract foreign capital. This led to the country becoming immersed in global supply chains for products ranging from apparel, footwear, electronics, consumer durables, and much more. Among these suppliers, the Taiwanese capital, in collaboration with leading global brands, has found its niche in the electronics industry. The success of Apple-Foxconn’s intertwined business model has found salience over the years.
It is hard to ignore the severe human costs borne by labour in these facilities in Mainland China. Regimented management systems, unsafe working conditions and severe labour disciplining to meet standards and tight timelines of Apple and Foxconn facilities heavily squeezes workers. In addition to physical hardships and exhaustion, there are the ‘hidden injuries‘ in the mental and emotional realms including strain and disruption of familial relations.
Given the production ecosystem is ubiquitous across geographies and irrespective of political systems, one can surely dread the impending costs for Indian workers employed in these facilities, especially considering how labour organising and unionisation on the factory floor are heavily clamped down. The faultlines vis-à-vis Taiwanese suppliers have been made visible in Karnataka in 2020 and Tamil Nadu in 2021. Rather than chartering a different path, India seems to be replicating the China model, and this should be regarded with some trepidation.
- Akçali, Emel, Lerna K. Yanik and Ho-Fung Hung. 2015. ‘Inter-Asian (Post)Neoliberalism?: Adoption, Disjuncture and Transgression’, Asian Journal of Social Science, 43: 5-21.
- Duara, Prasenjit and Elizabeth Perry. 2018. ‘Beyond Regimes: An Introduction’, in Prasenjit Duara and Elizabeth Perry (eds.) Beyond Regimes: China and India Compared. Cambridge, USA: Harvard University Press.
- Andreas, Joel. 2019. Disenfranchised: The Rise and Fall of Industrial Citizenship in China. New York, USA: Oxford University Press.
- Rajeev, Meenakshi. 2009. ‘Globalisation and Labour Market Flexibility: A Study of Contractual Employment in India’. International Journal of Development Issues 8(2): 168-183; Sapkal, Rahul Suresh. 2016. ‘Labour Law, Enforcement and the Rise of Temporary Contract Workers: Empirical Evidence from India’s Organised Manufacturing Sector’. European Journal of Law and Economics 42: 157-182.
