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CITU’s Samsung Protests: A Trojan Horse For China’s Manufacturing Dominance?

The Commune
CITU Samsung Protests: A Trojan Horse For China's Manufacturing Dominance?

The ongoing labour unrest at the Samsung Chennai plant, spearheaded by the Centre of Indian Trade Unions (CITU), is raising eyebrows and concerns far beyond the factory gates. As the protests stretch into their fourth week, industry experts and government officials are beginning to question whether these actions are merely about workers’ rights or part of a more complex geopolitical game.

With Tamil Nadu contributing 34% of India’s electronics exports, the protests threaten not only Samsung but also broader manufacturing ambitions in India, with some fearing a repeat of past industrial closures. The timing, coinciding with India’s Free Trade Agreement reviews, has fueled suspicions of geopolitical motives aimed at undermining India’s rise as a global electronics hub.

The Curious Case Of Selective Protests

A glaring inconsistency is the absence of similar protests at factories run by Chinese smartphone giants like Xiaomi, Oppo, and Vivo. This selective targeting has raised questions about CITU’s real motives. We have never heard of protests at Xiaomi, Oppo, or Vivo factories. In contrast, CITU created chaos at the Taiwanese Foxconn plant in Chennai in 2010, fought a five-year legal battle in court, and temporarily shut the plant. Interestingly, after Chinese Xiaomi entered an agreement with Foxconn to produce at the same Chennai plant in 2017, CITU disappeared.

Samsung’s Commitment vs. CITU’s Agenda

It’s worth noting that Samsung has shown commitment to its India operations, even during challenging times. A former employee points out that, “Even during COVID, Samsung gave a 15% increment to its workers. The firm expanded its Chennai plant by 1,588 Crores by adding a new compressor unit too after COVID. Now they are manufacturing compressors as well in Chennai. But what seems to be the CITU’s problem is that what was brought from China should be sent back to China itself. Sounderarajan was nowhere to be seen for hte past 11 years. Only after the compressor plant came here, he can be seen and these protests begin. In 2011, he was doing protests like this and then he went underground. Now since India is a growing electronics manufacturer, he is using his old formula to shut down companies through protests and send them back to China. I worked for 7 years at Samsung. The welfare benefits given by Samsung to its workers is one of the best in the industry. Employees know that and seem to be threatened and misled by the CITU members. My humble request is that patriotic Indians please come forward and put an end to CITU at the earliest. Otherwise, this will blow up into a bigger problem and we will not have any industry or jobs in the country.”

Another employee, speaking to a media channel said, “I have been working here for 12 years. What I want to ask everyone is that employees asked for salary hike. But now it seems unclear if they want salary hike or a Union. They have agreed to give us a hike. So why do we need a Union. If we work in the general shift, it is for 9 hours out of which 1 hour is for break and we work for 8 hours. Those working in a shift only work for 7hours including break. During peak season, there is over time also. Those interested can do it an those who do not want to do it are not compelled either. If you work for 2 hours overtime, you get paid for it also. I do not understand what the problem is. This helps us in the form of a double salary. The main salary is received in teh first week and the overtime salary comes about 2 weeks later so there is money always in the bank through the month. The company has only done good for the people.”

A Threat To India’s Manufacturing Ambitions

Tamil Nadu contributes a whopping 34% of India’s electronics exports. If left unchecked, the prolonged unrest at Samsung could have far-reaching consequences not just for the South Korean tech giant but for India’s entire Make in India initiative.
It seems as if CITU is looking to derail investments, especially in electronics, pouring into India and divert them to China. This sentiment is echoed by many who fear a repeat of the Nokia debacle, where union pressures and tax disputes led to the closure of a major manufacturing plant in the same Sriperumbudur industrial area in 2013.

The FTA Factor: Timing That Raises Questions

The timing of these protests is particularly suspicious, coinciding with India’s ongoing review of Free Trade Agreements (FTAs) with South Korea and ASEAN countries. These agreements are crucial for India’s plans to boost trade and manufacturing. The labor unrest could potentially weaken India’s bargaining position in these negotiations, indirectly benefiting competing manufacturing hubs like China.

Foreign Influence: A Growing Concern

A recent report by the Global Trade Research Initiative (GTRI) suggested that India should establish industrial intelligence units to investigate potential foreign involvement in such disruptions. The report hints at the possibility that foreign entities could be influencing these protests to sabotage India’s ambitions of becoming a global electronics manufacturing hub.

The Way Forward

As the situation escalates, calls are growing for the Tamil Nadu government to take decisive action. Industry experts suggest that while worker welfare is important, it shouldn’t come at the cost of driving away foreign investment. They propose a balanced approach where the government facilitates industry-wide discussions on wage benchmarking and worker welfare without granting blanket union recognition.

As the Samsung strike in Chennai continues, it’s becoming clear that this is more than just a labour issue. It’s a potential crisis that could derail India’s manufacturing ambitions and inadvertently benefit competitors like China. With high stakes involving FTA negotiations and the spectre of foreign meddling, Tamil Nadu and India cannot take this situation lightly. The coming days will be crucial in determining whether India can maintain its position as an attractive manufacturing destination or if it will cede ground to its competitors.

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