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samsung electronics' india factory strike enters third week as 'make in india' ambitions suffer a serious setback

2024-09-25

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india's ambition to build a "make in india" business card and triple the size of its electronics industry to $500 billion in six years has been caught off guard by the strike.

south korea's samsung electronics said on tuesday that the strike at a samsung electronics factory near chennai, india has entered its third week. the average monthly salary of full-time manufacturing workers at the factory is not low, 1.8 times the average salary of workers at other companies in the region. samsung hopes that the workers can return to work as soon as possible.

according to citu, the organization leading the largest strike in india this year, the average monthly salary of samsung workers is currently 25,000 rupees (about 300 us dollars), which is not enough to maintain a normal life. the workers are now demanding an additional salary of 36,000 rupees per month for three years. in addition, samsung also needs to recognize the union organization of the factory.

veera raghava rao, the labour minister for the indian state of tamil nadu, said on tuesday that efforts were being made to resolve the dispute, but samsung had warned last week that workers would not receive a single cent of salary if they continued the strike.

samsung's chennai plant has seen production cut since a strike began on september 9, with 1,300 of the plant's 1,800 employees taking part. on tuesday, the state government initiated a reconciliation process between the union and management.

frustrated ambitions

the strike at samsung's factories in india is not only a headache for samsung, but also a critical test for india's manufacturing industry. chennai and the surrounding areas have become an important hub for india's industrial diversification, and the workers' actions at samsung may force overseas manufacturers to reassess their development prospects in the region.

samsung electronics pointed out that the strike has had a serious impact on the operation of the production base, and the jobs provided by samsung have guaranteed the highest standards of health, safety and welfare for workers. the chennai factory accounts for one-third of samsung's annual revenue of $12 billion in india.

earlier, samsung announced plans to produce laptops and its high-end galaxy s24 phone series at its noida plant in northern india this year. its rival apple aims to produce a quarter of all its smartphones in india by 2025.

but analysts point out that the recent labor disputes in india may prompt contract workers in local electronics manufacturing or assembly factories to form large-scale unions, which will become a disadvantage for investors and business owners.