The labour strike at Korean electronics giant Samsung’s Sriperumbudur plant in Tamil Nadu is escalating and poses a serious risk to the region’s manufacturing ecosystem, think tank GTRI said on Monday. It added that the governments of Central America and Tamil Nadu must immediately intervene in the matter.
“If the strike at Samsung’s Sriperumbudur plant is not resolved soon, India risks losing ground in its bid to become a global manufacturing powerhouse,” the Global Trade Research Initiative (GTRI) said in a statement. It added that the strike is fast turning into a major crisis and will threaten the state’s position as a leading hub for electronics manufacturing.
“The unrest is escalating and poses a serious risk to the region’s manufacturing ecosystem, which includes major players such as Foxconn, Sanmina and Flex,” said GTRI founder Ajay Srivastava.
He said the unrest is calling into question India’s ability to maintain stable manufacturing operations, a key factor for investors and multinational corporations. “India should set up industrial intelligence units to determine whether the unrest is influenced by foreign entities,” he suggested.
Tamil Nadu contributes 34 per cent of India’s electronics exports.
“Delays in resolving the strike could lead to job losses, stalled development and a significant drop in investor confidence. Both the state and central governments must act quickly to prevent the unrest from spreading to other key manufacturers in the region,” Srivastava said. He also said the current strike at Samsung evokes memories of the collapse of Nokia in Sriperumbudur.
A decade ago, Nokia was one of India’s most successful mobile phone makers, he said.
He also said that Tamil Nadu has long been a destination for global electronics manufacturers, particularly from South Korea and ASEAN (Association of South East Asian Nations) countries. “The timing of the strike is particularly worrying as India is in the midst of reviewing its free trade agreements (FTAs) with South Korea and ASEAN countries. Any escalation of the strike could adversely affect these negotiations,” he said.
India urgently needs a fast and dedicated dispute resolution mechanism for large companies, including multinational corporations (MNCs), he said.
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