Strikes at Samsung in India Workers' strike at Samsung tests the "Make in India" initiative

Related Vendors

Samsung Electro Mechanics GmbH

Wuxi InfiMotion Technology Co., Ltd.

According to the Indian government, the country should establish itself as a manufacturing location for large corporations to diversify supply chains and reduce dependencies on China. However, days-long strikes at a Samsung factory are testing the dream of being a low-cost production country.

Since September 9, 2024, many workers at one of the two major Samsung factories in India have been on strike to protest for fairer wage payments. The factory near Chennai in Tamil Nadu in southern India primarily produces Samsung household appliances. The products coming from the factory contribute about one third to Samsung's annual revenues in India, which exceed 10 billion US dollars. Accordingly, the production downtime is likely to be painful for those responsible; at the same time, Samsung's securities are dropping in the stock market.

The latest headlines about the strikes won't help. As reported by Reuters, around 100 striking workers and union representatives were preemptively detained by Indian police on Monday (16.9.). The reason was plans for an unregistered protest march. “A senior police officer from the Kancheepuram district, Sankar Ganesh, told Reuters by phone that about 100 workers had been ‘preventively detained’, without further elaboration,” report the authors at Reuters. There are no details about this development. However, the protests themselves are testing the strategy of the Indian government under Narendra Modi.

Make in India

Under the label "Make in India," politicians abroad are promoting India as a production and manufacturing site to diversify supply chains and reduce dependencies on China. Since 2014, Modi's government campaign has been endeavoring to facilitate investments, promote innovations, enhance skill development, protect intellectual property, and build a robust manufacturing infrastructure.

The factory near Chennai is older than the "Make in India" campaign, but it is likely that the Samsung factory near Noida, close to New Delhi, was established due to government efforts; according to their own statements, it is the largest smartphone factory in the world. Although there are no strikes there, the work stoppages in Chennai highlight the fact that workers in India are often paid appropriately.

According to the report by Investing.com, the labor dispute was preceded by a letter from the CITU union to Samsung's management demanding higher wages. However, this letter reportedly went unanswered. "The average monthly wage of Samsung workers is 25,000 rupees (300 US dollars). The union is demanding an increase of 36,000 rupees (430 US dollars) over three years. Many employees, including long-term staff with up to a decade of service, earn only 23,000 rupees per month—a salary that barely suffices given rising living costs," state the authors from Investing.com.

The current strikes are considered pivotal for the "Make in India" campaign. On one hand, there are efforts to establish India as a global manufacturing site, which is why investments in the semiconductor segment were recently made public. On the other hand, workers are increasingly demanding fair wages and working conditions. (sb)