News / Protest at Samsung factory a stumbling block to India's export ambitions

Photo: © Ashish Kumar |

Hi-tech exports from India, as it looks to take market share from China, could face a challenge as labour tensions increase. 

Protests at Samsung’s plant on the outskirts of Chennai could harm India’s prospects, as its emerging economy vigorously positions itself as an alternative to China in the rapidly growing electronics manufacturing space.  

India expects to export some $14bn-worth of mobile phones this year – now its fifth-largest export commodity. 

The region in and around Chennai is now a major hub for industrial verticals diversifying into India.  

The plant in Sunguvarchatram – one of Samsung’s two production units in India — had to cut production severely over the past three weeks after a majority of the some-2,000 workers walked out and began protests and blockades outside the factory.  

According to sources, the striking workers are seeking unionisation rights as well as higher wages and better working conditions.  

The South Korean manufacturing conglomerate admitted having serious difficulty operating the production site due to the action and Samsung is said to have warned strikers of ‘legal consequences’ if they attempted to prevent others reporting to work, besides asking them to explain immediately why they should not face disciplinary action, including dismissal.   

“We have informed our policy to our workers based on relevant laws and regulations, and urged them to return to work immediately,” Samsung India said.  

“The safety and wellbeing of our workers is a priority. We remain committed to resolving this issue.”  

But the trade union spearheading the labour strike appeared to be firm on its demands being met, its leaders even considering a counter legal action against Samsung.  

“It is up to the court to decide whether the strike is illegal,” a union source said. T“The workers will continue to strike.” 

The striking workers have applied to establish a standalone Samsung India Workers Union with the local labour authority.  

Samsung argues that the formation of such a union entity would violate its trademark interests, alongside other potential business ramifications. But union sources shrugged off such claims, noting that most unions in India operated in that fashion.  

Samsung and rival Apple have high production stakes in India, targeting burgeoning consumer demand for digital products in the country.  

This year, Samsung unveiled a plan to start making laptops at its Noida plant in the north, as well as its premium Galaxy S24 mobile series for domestic sale and exports.  

Apple aims to produce a quarter of all its smartphone variants in India by 2025, including its latest iPhone 16 series for export. The sale of new variants began on a strong note in the local market, reporting a 25% gain over the previous round, according to reports.  

Amid the positive business signs, some industry observers believe the latest labour unrest, on a scale unknown for some time, has the potential to open the door to widespread unionisation of contract workers at electronics manufacturing or assembly facilities as trade diversification drives investments away from China.  

India’s much-publicised Make-in-India programme has tasted some success in recent months, on the back of an improved production-linked incentive scheme laid out early last year.  A semiconductor fabrication unit deal that prime minister Narendra Modi struck with US president Joe Biden yesterday is the latest notable gain on that front.  

New Delhi wants to hit $500bn by value in electronics manufacturing by 2030, and it is believed that harmonious industrial relations will remain critical, although production days lost due to strikes or protests have been significantly fewer in recent years amid evolving “gig economy” signals. 

A recent countrywide indefinite strike call by port workers was called off after negotiations with government leaders. 

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