Reward (or risk) for OEMs seeking India EMS manufacturing partners

By Staff

Indian EMS providers and Indian EMS industry both have their challenges. But partnering with the right Indian EMS providers can prove cost-effective for even the most demanding OEM executives.

As China loses some of its competitiveness for electronics design, manufacturing and PCB assembly, India and other Asian nations try to capture more contract electronics marketshare.

While India has direct labor costs competitive with China, Indian ESDM companies cannot claim this as an advantage for most OEM prospects because of India’s 200+ labor law constraints.

Employment and labor laws in India

For example, Indian government’s Industrial Disputes Act (IDA) says any Indian firms with more than 100 employees must seek government permission to re-assign or lay off even one employee. Some Indian states even require companies with 50+ employees to get government approval for assigning one employee from one task to another.

Click here or map image at right to request list of EMS providers in India


Indian ESDM inhibited by government
OEM best practices in EMS mfg RFQs and quotes


Also, India’s Trade Unions Act allows any 7 employees to form a union. This means any one Indian EMS provider can have several, different unions within the same factory that EMS management has to engage.

Labor-market flexibility of developing Asia v. other, larger economies (2018)

Flexibility of wage determination and hiring and firing practices for most emerging Asian countries (with the exception of Malaysia and Taiwan, which are in line with developed market standards) have further room for improvement.

Noting India’s relative placement below, and that results were partially derived from World Bank’s ‘Ease of Doing Business Rankings’, readers should note investigative journalists revealed the Modi government gamed rankings for World Bank’s ‘Ease of Doing Business Rankings’ by prioritizing minor institutional and procedural tweaks v. making bold economic reform as promised. See proximity matrix below.

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