When mentioning "Make in India," many people first think of low costs and cheap labor, which is one reason why global companies are setting up factories in India.
However, recently, Samsung's factory in India has encountered some unexpected challenges.
Strikes around the Samsung plant in Chennai have intensified, catching Samsung off guard.
Indian workers are demanding a monthly salary of $450 (approximately 30,000 rupees), a request that exceeds the wages of many factory workers in China.
If Samsung does not meet this demand, the workers threaten to conduct nationwide strikes.
Now, Samsung finds itself in a difficult position.
Faced with the Indian workers' demand for wages higher than those in Chinese factories, Samsung is under immense pressure.
Samsung's initial entry into India was not for high salaries and benefits but to take advantage of the local cheap labor.
However, this "cheap" advantage seems to be rapidly disappearing, as workers are now demanding significant wage increases.
If India truly wishes to become a developed country, a base salary of $450 is clearly insufficient.
A salary increase to $1,000 would only barely bring it to two-thirds of what Korean workers earn.
While this may seem distant, the ambitions of Indian workers should not be underestimated.
Today, they demand $450; next year, they might double that.
In light of this strong call for wage increases, multinational companies like Samsung must seriously consider their options—either pay higher wages or withdraw from the market.
This demand for higher wages reflects deeper issues.
The demands of Indian workers evoke the turbulence of global supply chains.
Once, it was thought that India replacing China as the "world factory" was just a matter of time, but Indian workers have now made it clear:
They not only want jobs but also expect incomes that reflect their labor, no longer willing to be seen as cheap labor.
The sudden rise in workers' wage demands is influenced by two significant factors: rising prices and increased living costs.
In recent years, India's inflation issue has worsened, with the prices of essentials continuously rising, putting increasing pressure on workers' lives.
Although a base salary of 3,000 rupees seems decent, for many workers, it merely maintains a basic standard of living, and may even fall short.
The workers' demands are quite simple: they seek not a luxurious life, but an income that can cover their family's basic expenses.
Moreover, Indian workers are also asking for a four-day workweek, no overtime, and a departure from the grueling 996 work culture, hoping to enjoy a standard of living comparable to that in Europe and America.
This undoubtedly poses a significant challenge for global companies.
In the past, foreign companies chose to invest in India because of its low-cost advantages, but now the insistence on "raising wages" has put Samsung in a difficult position, causing this advantage to gradually fade.
Although the skill levels and productivity of Indian workers are generally lower, their wage demands are continuously increasing.
If these demands are not met, companies will face the risk of collective strikes and production halts.
Some argue that this is a reasonable demand for workers' rights. In today's globalized world, who doesn't want to live better?
However, entrepreneurs undoubtedly feel immense pressure.
With every wage increase, businesses must recalculate how to maintain profits, after all, entrepreneurs' pockets won't easily be filled by workers.
Globally, the rise in labor costs is no longer an isolated phenomenon.
Whether in China, India, or Southeast Asia's Vietnam and the Philippines, the era of relying on low wages and low costs is slowly fading.
If companies want to remain competitive, they must upgrade automation equipment and improve productivity.
The push for higher wages among Indian workers is, in fact, a microcosm of the awakening consciousness of global industrial workers.
Today's workers are no longer "cogs in the machine"; they seek "dignified lives" and "decent incomes."
Through this wage negotiation, Indian workers are not only fighting for their rights but also setting a benchmark for workers globally.
In the face of this wave of wage increases, Samsung needs to seriously rethink its future development strategy.
After all, Indian workers are not just passive protestors; some past news reports about international companies' factories being vandalized or set on fire remain vivid.
If such situations occur again, Samsung will struggle to respond; if factories fall into crisis, withdrawal will not be easy.
Moreover, the challenges Samsung faces extend beyond worker salary issues.
The Indian government may take measures regarding tax policies, imposing new obstacles for foreign enterprises, potentially leading to unexpected burdens.
Past incentives and support policies may ultimately turn into a "trap," leaving companies in an awkward position after significant investments.
Additionally, India's port capabilities are severely inadequate, which complicates production and logistics for Samsung.
For multinational companies like Samsung, smoothly exporting products faces significant challenges.
Many goods are stranded at ports, with low logistics efficiency resulting in high transportation costs.
Until the wage issue is resolved, goods remaining at ports will continue to erode the company’s profits.
For Samsung, finding a new balance in its global factory layout will be a crucial challenge moving forward.
This wave of wage demands from Indian workers might just be the beginning of a global factory reshaping.
In summary, in the competitive landscape of global industrial chains, India sees itself as the next "world factory," but workers are no longer the cheap labor they once were.
They desire higher incomes, better benefits, and even seek a balance between work and life.
However, hoping to avoid overtime while earning high salaries and comparing themselves with Western workers is certainly not simple.
Regardless, the subsequent developments of this situation will be closely watched, and we await to see how Samsung navigates this predicament.
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