In the global manufacturing competition, India is trying to attract more foreign investment, particularly from tech giant Samsung, through its cheap labor force.
However, recent violent strike incidents have cast a shadow over this effort.
On September 9, workers at the Samsung factory near Chennai in Tamil Nadu began a strike to protest low wages and excessively long working hours.
Established in 2007, this factory mainly produces home appliances such as washing machines, refrigerators, and televisions, contributing 30% of Samsung's revenue in India.
Despite its large scale, the average monthly salary for workers is only 25,000 Indian Rupees (approximately 2,117.5 RMB), which is below market levels.
Nearly 500 strikers are demanding a salary increase of 5,000 Rupees and a reduction in overtime hours.
Additionally, they are calling for the establishment of a union to protect their rights.
While Samsung has publicly stated it would address employee issues, in reality, it quickly replaced the strikers with other workers, causing production to plummet to just 25% of normal levels.
With the holiday season approaching, Samsung urgently needs to stock up, but the impact of the strike has made it impossible for them to achieve their expected profits.
Indian Prime Minister Modi hopes to triple the production of electronic products under the "Make in India" initiative within six years, with an anticipated output value of $500 billion.
However, the strike incidents pose a serious challenge to this plan.
Samsung's stock price has dropped over 6% within a week, and investor confidence in Indian manufacturing is starting to waver.
Although Modi appears innocent on the surface, he is not without blame.
Back in 2014, the Indian government heavily fined Samsung $200 million for tax evasion, and in 2023, it imposed another fine of over $10 million for environmental regulation violations.
These series of penalties have led to speculation that Modi's government is unhappy with Samsung's profits in India.
As the strike situation escalated, Indian police arrested over 100 workers on September 16, subjecting them to violent treatment during detention.
Although these workers were quickly released, the escalation of events has made the situation increasingly tense.
The pressure of high prices has made workers' wages particularly tight, with many families feeling the pinch of living difficulties.
The number of strikers continues to grow, with demands for wages to double within three years, a reduction of weekly working hours to 35, and company provisions for the families of deceased employees.
South Korean media have expressed concerns, suggesting that the strike may be manipulated by the Indian government for political purposes.
Due to the strike incidents, relations between India and South Korea have become strained.
Public opinion is calling for the Indian government to establish a systemic framework to ensure stability in manufacturing.
However, investors are questioning whether India can maintain stability in manufacturing, and if trust collapses, future investments will be severely impacted.
Recently, Samsung announced plans to produce laptops and high-end smartphones at its factory in Noida, and Apple also plans to shift a quarter of its smartphone production to India by 2025.
However, if the strike issue is not resolved, these plans are likely to fall through, and India’s “manufacturing dream” will face setbacks once again.
Analysts previously predicted that India would become the world's third-largest economy by 2027, but this remains a significant challenge.
Since the "Make in India" initiative was launched a decade ago, India’s share in global industry has only been 2%, a figure that has hardly changed since the last century. The dream of replacing China as the world's factory seems distant.
The gap with China lies in education levels; the average years of education for Chinese workers is 14, while for Indian workers, it is only 8.
Although there is an abundance of labor resources, there is a shortage of skilled workers. Many workers remain in low-end manufacturing, unable to transition to more advanced roles.
The employment ratio in the formal sector is only 10%, while the rest are trapped in low productivity industries, facing numerous obstacles to transition.
For example, Foxconn once announced plans to establish a factory in India but ultimately failed and still relies on the Chinese market.
While Foxconn has not explicitly abandoned the Indian market, the reality shows that India still has considerable gaps in corporate culture, worker quality, and the business environment.
The issues facing India's manufacturing sector need to be resolved promptly, especially regarding workers' rights and the labor market.
The strike incidents not only challenge the interests of low-level workers but also reflect the fragility of India's manufacturing sector.
It is hoped that in the future, fair wages and reasonable labor conditions can be achieved, preventing the exploitation of low-level workers while creating a favorable environment for the development of the country and enterprises.
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