Samsung strike threatens India's global manufacturing goals, warns GTRI
- In Reports
- 06:17 PM, Sep 24, 2024
- Myind Staff
The Global Trade Research Initiative (GTRI) based out of Delhi has warned that if the ongoing labour strike at Samsung's Sriperumbudur plant isn't resolved, India may lose ground in its quest to become a global manufacturing leader. The think tank underlined how important it is for industrial intelligence teams to determine whether foreign entities are behind these disruptions.
The GTRI issued a warning, stating that the present state of affairs might become a replay of the closing of Nokia's Sriperumbudur plant a decade ago, which resulted in a large loss of jobs and gave China the upper hand in manufacturing. Tamil Nadu is an important region for India’s manufacturing sector, accounting for 34% of its electronics exports.
According to The Economic Times, GTRI Founder Ajay Srivastava stated, "The unrest is intensifying and poses a serious risk to the manufacturing ecosystem in the region, which includes major players like Foxconn, Sanmina, and Flex." The strike, he continued, raises grave questions about India's ability to continue stable operations, which is crucial for both foreign companies and investors.
GTRI issued a warning, stating that Tamil Nadu's standing as a major centre for the production of electronics is seriously threatened by the strike. Extended postponements in addressing the crisis may lead to employment reductions, hinder progress, and weaken the trust of investors. The think tank recommended that the federal and state governments step in right away to stop the unrest from escalating and affecting other significant manufacturers in the area.
“The timing of this strike is especially concerning as India is in the midst of reviewing its Free Trade Agreements (FTAs) with South Korea and ASEAN nations. Any escalation could have a negative impact on these negotiations,” said Srivastava. In order to maintain stability in India's manufacturing sector, he emphasised the need for a fast-track dispute resolution mechanism for large firms, especially multinational corporations (MNCs).
The strike, GTRI added, might make it more difficult for India to achieve its larger objective of becoming a hub for global manufacturing. The country intends to triple its electronics production to $500 billion over the next six years under the Make in India initiative. However, the think tank warns that this ambitious goal could be seriously impacted by ongoing labour unrest.
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