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Over 1,000 workers at Samsung Electronics' Chennai facility have gone on strike for the third week, demanding higher wages and union recognition. The rallies follow tensions about labour conditions at one of the company's primary plants in India.
Since 9 September 2024, employees have disrupted operations and camped outside the home appliances factory, which accounts for a large portion of Samsung's annual revenue in India, totalling USD 12 billion. The striking workers, coordinated by the Centre of Indian Trade Unions (CITU), are currently paid an average of 25,000 rupees (USD 300) per month, but they want an increase to 36,000 rupees (USD 430) over three years.
In a rare declaration on salaries, Samsung stated that its employees are paid 1.8 times more than those in identical roles at surrounding companies, including global heavyweights such as Foxconn and Dell. The corporation also stated that employees are eligible for overtime pay and numerous allowances, guaranteeing a safe and healthy workplace.
Despite these claims, the walkout tests Indian Prime Minister Narendra Modi's 'Make in India' plan, which wants to attract foreign investment and increase electronics manufacturing to USD 500 billion in six years. Labour Secretary Veera Raghava Rao has declared that talks are underway to resolve the conflict.
Samsung has cautioned workers that continuing to participate in the walkout may result in wage loss, worsening the situation while the business works to resolve the grievances and resume normal operations. The Samsung factory in Tamil Nadu is critical to the company's operations in India, and the current protests are one of the country's largest labour strikes in years.
Samsung has been operating its Sriperumbudur plant since 2006, employing over 2,000 workers who produce items like colour TVs, washing machines, and laptops. However, the strike led by the Centre of Indian Trade Unions (CITU) is now demanding a wage increase from Rs 25,000 to Rs 36,000 for blue-collar workers with seven to eight years of experience, in addition to official union recognition.
Notably, CITU is also pushing for union recognition at other major manufacturers in the area, including Foxconn, Flex, and Sanmina. If left unchecked, this unrest could severely disrupt Tamil Nadu’s electronics manufacturing sector, potentially affecting India's broader manufacturing industry.
Talking about the impact on foreign investment and the "Make in India" initiative, the report added that the ongoing strike could also hinder India’s broader goal of becoming a global manufacturing hub. Under Make in India, the country aims to triple its electronics production to USD 500 billion over the next six years. However, this ambition may be undermined if labour unrest continues unresolved.
Meanwhile, the Global Trade Research Initiative (GTRI) in a report stated that the unrest is escalating and poses a serious risk to the manufacturing ecosystem in the region, which includes major players like Foxconn, Sanmina, and Flex. It is casting doubt on India’s ability to maintain stable manufacturing operations, a key factor for investors and multinational corporations.
If the Tamil Nadu government does not intervene swiftly, the situation could mirror the closure of Nokia’s Sriperumbudur plant a decade ago, resulting in job losses and shifting manufacturing dominance to China," according to the report. The think tank recommended that India should establish industrial intelligence units to determine whether disruptions are influenced by foreign entities.
With the state contributing 34 per cent to India’s electronics exports, the economic implications are major as it threatens to derail years of effort to attract investment in Tamil Nadu’s electronics sector. GTRI predicted that delays in resolving the strike could lead to job losses, stalled development, and a significant decline in investor confidence. Both the state and central governments need to act quickly to prevent the spread of unrest to other key manufacturers in the region.
