Budget 2024: Jobs sops unlikely to help electronics manufacturers, smartphone assemblers unless they hire on their own

The PM’s package for employment and skilling is unlikely to help the likes of Foxconn or Tata Electronics (Wistron) as they rely on manpower firms to supply shop-floor employees, experts say.

For job creation in the manufacturing sector, the budget proposes incentives to both employees and employers in the first four years. But the budget announcement comes with the rider that the employee must be directly working in the entity paying salary. In other words, the companies in the manufacturing sector can claim benefits only for the employees on their rolls (in-sourced) employees, experts said.

The multinational companies who have chosen India as part of their China plus one strategy rely heavily on outsourced workers to overcome challenges on many fronts. In case a company needs more workers for a short-term or falls short of workers due to attrition, manpower firmly can quickly respond and meet the demand.


Workers in high-end electronics manufacturing typically work longer hours usually with two shifts of 12-hour cycles. The companies don’t go for organic hiring for certain categories of employees as cost of worker acquisition is high and the process itself is time-consuming, a senior executive at a manpower company said.

The large manufacturing companies usually avoid large-scale hiring as it involves compliance with multiple labour regulations, later.

Taiwanese giants engaged in iPhone assembly and electronics manufacturing Foxconn, Pegatron and Wistron as well as other Electronics System Design & Manufacturing (ESDM) manufacturers source workers from both large manpower companies as well as local outsourcers.

Andhra Pradesh, Karnataka, Gujarat and Tamil Nadu have been aggressively pushing for investments in high end ESDM manufacturing.