Samsung labour strike poses serious risk to manufacturing ecosystem: GTRI

The labour strike at Korean electronics giant Samsung's Sriperumbudur plant in Tamil Nadu is escalating and it poses a serious risk to the manufacturing ecosystem in the region, think tank GTRI said on Monday. It said the Centre and Tamil Nadu governments need to intervene immediately in the matter.

"If the strike at Samsung's Sriperumbudur plant is not resolved soon, India risks losing significant ground in its quest to become a global manufacturing powerhouse," the Global Trade Research Initiative (GTRI) said in a statement. It added that the strike is quickly becoming a major crisis, and it will threaten the state's position as a leading electronics manufacturing hub.

"The unrest is escalating and poses a serious risk to the manufacturing ecosystem in the region, which includes major players like Foxconn, Sanmina, and Flex," GTRI Founder Ajay Srivastava said.

He said the unrest is casting doubt on India's ability to maintain stable manufacturing operations, a key factor for investors and multinational corporations. "India should establish industrial intelligence units to determine whether disruptions are influenced by foreign entities," he suggested.

Tamil Nadu contributes 34 per cent to India's electronics exports.

"Delays in resolving the strike could lead to job losses, stalled development, and a significant decline in investor confidence. Both the state and central governments need to act quickly to prevent the spread of unrest to other key manufacturers in the region," Srivastava said. He also said the current strike at Samsung evokes memories of Nokia's downfall in Sriperumbudur.

A decade ago, Nokia was one of India's most successful mobile phone manufacturers, he said.

He also said Tamil Nadu has long been a destination for global electronics manufacturers, particularly from South Korea and ASEAN (Association of Southeast Asian Nations) countries. "The timing of the strike is especially 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 negatively impact these negotiations," he noted.

India urgently requires a dedicated, fast-track dispute resolution mechanism for large firms including multinational corporations (MNCs), he said.