Samsung India Faces Uncertainty in Tamil Nadu Amid Ongoing Labour Protests

Samsung Electronics is considering relocating some or all of its manufacturing operations from Tamil Nadu if the current labour strike remains unresolved, as reported by multiple sources. Key ministers from the Tamil Nadu government attempted to intervene but were unable to resolve the deadlock at Samsung’s Chennai plant, where the labour strike is approaching its second month on Thursday. 

A source familiar with the situation disclosed that the neighbouring state Andhra Pradesh and Gujarat have reportedly offered incentives to Samsung to establish manufacturing facilities in their regions. The source also mentioned that Uttar Pradesh, which already houses a Samsung smartphone manufacturing plant in Noida is also being considered. 

Samsung India did not directly address whether it is in discussions with other state governments or considering moving operations from Tamil Nadu. A spokesperson for Samsung India expressed gratitude to the Tamil Nadu government for its support and stated that the company will continue to collaborate with the government of India and in various states where it operates to contribute to nation-building through investments in manufacturing, R&D, responsible citizenship and transformative innovations. 

The labour strike at Samsung’s Chennai plant has had a significant impact with over 1,500 workers representing more than 80% of the workforce, being on strike since September 9. The workers are demanding improved wages, better working conditions and recognition of their union Centre of Indian Trade Unions (CITU). 

The Chennai plant, which produces consumer durables such as refrigerators, washing machines and air conditioners is estimated to have contributed about a fifth of Samsung’s $12 billion sales in India for FY23. However, a management consultant suggested that the reports about relocating the manufacturing base to other states could be a tactic by the South Korean company to exert pressure on both the government and the workers in its favour.