Wage wars: Global electronics giants face the wrath of Indian workers
Country’s manufacture hub, Tamil Nadu, is witnessing a three-week strike by workers of Samsung’s appliances plant. This casts a shadow on government’s efforts to lure investors
A small town in the southern Indian state of Tamil Nadu has captured global attention as nearly 1,500 workers at Samsung Electronics India participate in a labour strike, compelling the world’s largest electronics manufacturer to come to the negotiating table.
Workers have been on strike for almost three weeks at Kancheepuram, on the outskirts of the state capital Chennai. Their demands include recognition of their union, collective bargaining rights, a three-year salary increase, and better hours.
The average monthly salary of a full-time worker is about 25,000 Indian rupees ($300), and the union is demanding staggered raises, to reach 36,000 rupees ($431) in three years.
Union power
The protesting workers are part of the Samsung India Workers Union-Centre of Indian Trade Unions (SIWU-CITU). Samsung’s Kancheepuram facility, which produces television sets, washing machines, and refrigerators, accounts for one third of the company’s 12 billion rupees ($144 million) in Indian revenue. The plant is one among two in India, the other being in Noida, in the northern state of Uttar Pradesh.
Samsung India Electronics has never had a union since production at the Kancheepuram facility began in 2007. The SIWU-CITU was formed in July 2024 and still awaits registration and company recognition, even though the Trade Union Act under Indian labour law mandates registration of a union within 45 days of its formation.
“The labour department has still not recognised the union despite the legal provision, and it has been taking sides with the company in delaying recognition,” A. Soundar Rajan, state president of CITU, told RT.
According to him, more than 1,500 workers out of a total of 1,723 are part of SIWU, but the company is trying to form a “namesake union” with a few workers from the management’s side. “The workers demand recognition of the newly formed union which has the majority of workers, but the company is not ready to consider the demand,” he insisted.
The union was formed in July and its first meeting coincided with the National Samsung Electronics Union’s (NSEU) labour strike in South Korea on July 8, 2024, involving 30,000 workers. The NSEU offered its support to the SIWU protest through an official statement.
Soundar Rajan said the company has been trying various tactics to break the protest, which has held up the facility’s production.
“The company people are contacting family members, threatening them indirectly, saying no work, no pay. All the union wanted was to initiate talks in the presence of labour department officials, which the company is not ready to do,” he said.
Some newspaper reports have claimed that most of the protesting employees returned to work after the company threatened no pay for non-attendance days. The company had also sent notices setting deadlines for staff to give an explanation, failing which action would be taken, the reports stated. But this claim was refuted by Soundara Rajan, who claimed it to be a company tactic to demotivate the protesting workers.
Escalation and legal action
More than 100 union members who went on a peaceful protest to submit a petition to the Kancheepuram district collector were detained by the police on September 16 and later released.
According to a report, Samsung India has filed a lawsuit against members of the union leading the protest, asking the district court to pass a temporary injunction to restrain the union and its members from agitating, and making speeches within a distance of 500 metres of the factory. According to the union leader, the protest site is situated about 2 kilometres away.
Third Week Lucky For Samsung Strikers?Union recognition & higher pay are the chief demands of the 1k+ workers on the picket line near Chennai, with the company still refusing to budge.A Samsung official told media that the South Korean giant are willing to speak with… pic.twitter.com/K5Xdko1uPl
— RT_India (@RT_India_news) September 26, 2024
The protest has entered its third week, having started on September 9, and even after five rounds of talks between the union, the company, and the government, no headway has been made.
When contacted, C.V. Ganesan, Tamil Nadu labour welfare minister, told RT that “a positive outcome is expected after the meeting on the 26th and the government is always concerned about the welfare of the labourers”.
According to Soundar Rajan, if the talks fail again as expected, the union, in its general meeting, has decided that if the issue is not resolved on October 1, members of CITU across the state will participate in a protest supporting the Samsung union workers.
Labour movement and investments
Tamil Nadu has witnessed several labour protests in recent years. Foxconn, Apple’s production unit in Sriperumbudur, experienced labour unrest twice — once in December 2021 and again in January 2024 — which was one of the biggest bouts of labour unrest at an Apple assembler in India.
Nokia, another electronics giant, made an exit from Indian operations a decade ago after it had to shut down its facility at Sriperumbudur due to a combination of tax issues and labour unrest.
Kamaz, Russia’s largest commercial truck manufacturer, started operations in India in 2009 through a joint venture with India’s Vectra Group and set up a manufacturing facility with planed capacity of 5000 trucks a year in Hosur, Tamil Nadu. However, the company subsequently encountered complications related to labor law compliance, and was hit with several protests. The project was eventually frozen.
According to several former employees from both the Russian and Indian sides, the company failed to understand the complexities of the Indian market, particularly in engaging with labor unions.
Tamil Nadu, already an important manufacturing hub, continues to draw significant foreign investment, and has managed to strengthen its position in niche sectors including global capability centres (GCC), R&D, and electronics manufacturing. It ranked fourth during 2019-2023 in foreign direct investment, which totaled 10 billion rupees ($120 million).
The state’s positive investment climate has been attributed to infrastructure development and the state government’s policies towards foreign investments. The global investors' meeting held in January in Chennai attracted more than 6 trillion rupees ($72 billion) worth of investment proposals, according to the government.
State chief minister M K Stalin signed MoUs worth 70 billion rupees ($838 million) with 18 US-based companies during his recent week-long visit to the country to attract investment.
Ford Motor Company which exited the state two years ago has agreed to revive operations after Stalin’s visit. Foxconn announced it was considering investing $1 billion in Tamil Nadu for a plant to assemble smartphone display modules.
“The labour unrest is a solitary incident with both sides having specific demands which hopefully will be resolved soon,” says Ajay Srivastava, investment analyst and founder of Global Trade Research Initiative, on the ongoing protests by Samsung Electronics workers.
“If this spreads to other companies then it would become a big issue. As of now, there is no need for foreign companies to worry,” he notes, adding that the central and state governments should “act immediately” to bring an end to the issue “amicably and beneficially to both workers and the company.”
