Samsung Electronics may move part or all of its manufacturing operations out of Tamil Nadu if the ongoing labour strike remains unresolved, according to multiple reports.
This comes after key ministers from the Tamil Nadu government intervened but failed to resolve the deadlock at Samsung’s Chennai plant, where the labour strike is set to enter its second month on Thursday.
A source close to the situation revealed that the neighbouring state of Andhra Pradesh, along with Gujarat, has reportedly reached out to Samsung with incentives to establish manufacturing bases in their regions. Uttar Pradesh, which already has a Samsung smartphone manufacturing plant in Noida, is also among the contenders, according to the source.
Samsung India did not directly comment on whether it is in talks with other state governments or planning to shift operations from Tamil Nadu. “We will continue to work with the government of India and various states where we are present, to realise their vision of nation-building through investments in manufacturing, R&D, responsible citizenship, and transformational innovations. We are thankful to the Tamil Nadu government for its support,” a Samsung India spokesperson told FE.
Production at Samsung’s Chennai plant has been significantly affected, with over 1,500 workers, or more than 80% of the workforce, on strike since September 9. They are demanding better wages, improved working conditions, and recognition of their union. The plant, which manufactures consumer durables such as refrigerators, washing machines and air conditioners, is estimated to have accounted for about a fifth of Samsung’s $12 billion sales in India for FY23.
However, a management consultant noted that the reports about shifting the manufacturing base to other states could be a pressure tactic by the South Korean company to sway both the government and the workers in its favour.
On Monday, Samsung Electronics India signed a memorandum of agreement (MoA) with a workmen committee, offering a range of incentives, including a monthly Rs 5,000 ‘Productivity Stabilisation Incentive’ from October 2024 to March 2025, expanding air-conditioned bus routes from five to 108 and providing Rs 1 lakh in immediate assistance in case of a worker’s death.
This agreement followed marathon meetings led by Tamil Nadu industries minister TRB Rajaa and two other state ministers with Samsung’s management and a section of workers to end the labour unrest.
However, the Centre of Indian Trade Unions (CITU), which supports the protests, rejected the agreement, citing its failure to address a core issue—the recognition of the Samsung India Workers Union (SIWU). Rajaa stated that the government cannot intervene on the union matter since a case is pending in court.
E Muthukumar, CITU Tamil Nadu state secretary and president of the unrecognised SIWU, told FE that the strike continues as usual. He added that the workers have rejected the MoA, arguing that the workmen committee does not represent the entire workforce.
Meanwhile, hundreds of workers have gathered at a makeshift tent near the Sriperumbudur plant, where they have been protesting since September 9.
From: financialexpress
Financial News
