Written by Monsef Vengatil and Praveen Paramasivam
CHENNAI (Reuters) – A strike by workers in India that has disrupted production at a Samsung plant has put the spotlight on a politically backed labour group that has quietly rallied the South Korean company’s employees and is now planning to expand its efforts in the country’s electronics sector.
Samsung’s protests over low wages, now in their fifth day, are casting a shadow over Indian Prime Minister Narendra Modi’s plan to attract foreign investors to his “Make in India” campaign and triple electronics output to $500 billion in six years.
From Foxconn to Micron (NASDAQ: ), companies have been drawn to more business-friendly policies and cheap labor under Modi’s decade-long rule, especially as foreign manufacturing giants look to diversify their supply chains away from superpower China.
On Friday, hundreds of protesting workers wearing blue Samsung shirts continued to sit inside makeshift tents near the home appliance factory in the southern state of Tamil Nadu, wearing red caps bearing the acronym CITU.
The Centre of Indian Trade Unions is backed by India’s most influential hard-left political party, with 6.6 million workers. It advocates for measures on behalf of workers, though it has historically focused more on the auto sector and companies like Hyundai.
While employees at companies like Samsung can form their own union, partnering with groups like CITU, which began in 1970, is seen by some workers as a way to garner more national support and have their voices better heard by companies.
With the Samsung strike, the Central India Trade Union is now planning to enter the fast-growing electronics manufacturing sector, but companies are “not revising wages properly,” said S. Kannan, deputy general secretary of the Central India Trade Union Federation in Tamil Nadu.
“There is no chance for collective bargaining either,” he added.
A strike of this magnitude — and affecting production — is not uncommon in India’s electronics industry. Previous high-profile strikes include worker unrest at iPhone factories of suppliers Wistron and Foxconn in 2021, which were triggered by unpaid wages and a food poisoning incident, respectively.
Kannan said the CITU union plans to push for more worker rights at Apple (NASDAQ:AAPL) supplier Flex and electronics maker Sanmina, where it has been in talks with management over demands including union recognition and better wages.
Flex said in a statement that it adheres to the highest global standards of labor practices and believes in a respectful and collaborative environment.
The prime minister’s office, the federal IT ministry, Tamil Nadu’s labour ministry and Sanmina did not respond to Reuters’ queries.
The situation is dangerous
The Samsung strike is one of the largest industrial disruptions to have disrupted production at a foreign multinational company. The plant alone accounts for about a third of the company’s $12 billion annual revenue in India.
While the workers were protesting, Tamil Nadu Chief Minister MK Stalin has been on a tour of the United States since late August and held talks with companies like Nike (NYSE:) and Ford (NYSE:).
In Samsung’s case, the Central China Trade Union wrote a private letter in July – seen by Reuters – asking management to raise wages for workers it said were forced into a “miserable situation.”
When the company did not agree, the CITU trade union supported workers to go on strike this week, which also poses a challenge to companies that the group says pay low wages to poor workers.
The average wage for Samsung workers is 25,000 rupees ($300) a month, the All India Trade Union said, and they are demanding a raise of 36,000 rupees ($430) over three years. One worker outside the factory said he joined Samsung a decade ago and earns just 23,000 rupees a month, making life difficult amid rising living costs.
“Strikes could be reduced if the government ensures a mechanism for multinational companies to respect labour laws including freedom of association and collective bargaining,” said KR Shyam Sundar, an economist who has written about labour reforms in India.
In a statement on Friday, Samsung said it had begun discussions with its workers at the Chennai factory “to resolve all issues as soon as possible.”