A Balanced approach towards Workers’ and Manufacturers’ interests needed amidst Strikes: GTRI

Posted 07 Oct 2024

2 min read

In a recent Flagship Report, GTRI warned that Samsung Strike in Tamil Nadu risks repeating Nokia's Collapse a decade ago and called for prioritizing protection of worker’s rights while maintaining industrial stability.

A combination of tax disputes with Tamil Nadu government and mounting union pressures crippled Nokia's (one of India’s most successful mobile phone manufacturers) operations, leading to the plant's closure in 2013.
Reasons for the ongoing strikes by Samsung workers include demand for instant approval of proposal to form union, hike in wages, working time of 8-hours, among others.

Impact of these Strikes on Indian Economy

On manufacturing ecosystem: Hamper the ambitions of India in electronics manufacturing and lead to shifting of the manufacturing dominance to China. e.g., Nokia closure in 2013 shifted mobile manufacturing dominance to China.
- Instability due to strikes leads to losses for companies, supply-chain disruptions, and discourages investment by investors and MNCs.
On Labour force: May result in wage losses during strike periods and potential job insecurities.
On Government: India is in the midst of reviewing its Free Trade Agreements (FTAs) with South Korea and ASEAN countries. Any escalation of the strike could negatively impact these negotiations.

Measures to be taken towards resolution

Formulation of clear laws and formulation of SOPs: To protect workers, manufacturers' interests.
Role of state government: Encourage industry-wide policy discussions on wage benchmarking, safety, and welfare measures including all stakeholders.
Role of Industry: Samsung must address legitimate concerns of the workers by establishing a formal worker representation committee.
Fast-Track Dispute Resolution Mechanism: A proactive labour dispute resolution framework to help prevent labour unrest from escalating into full-scale strikes.