x Abu Dhabi, UAEMonday 22 January 2018

Indian strikes spread as losses rise to more than 4bn rupees

India's labour revolt has spread to the Gurgaon-Manesar industrial belt, where 50,000 workers observe a two-hour shutdown.

Industrial action at the Maruti Suzuki plant was supported by workers at other car manufacturers. Vijay Mathur / Reuters
Industrial action at the Maruti Suzuki plant was supported by workers at other car manufacturers. Vijay Mathur / Reuters

MUMBAI // Ten days of industrial action at a plant owned by India's largest car maker has resulted in production losses costing 4 billion rupees (Dh327.4 million).

But executives at Maruti Suzuki are not the only ones losing sleep over it. The labour revolt has spread to the neighbouring Gurgaon-Manesar industrial belt, India's biggest automotive hub located in the north of the country, as 50,000 workers announced their decision to observe a two-hour shutdown today to express solidarity with their counterparts at Maruti Suzuki.

More than 2,000 workers from the company went on strike on June 4, demanding, among other things, the recognition of a new labour union cobbled together in recent months to negotiate better perks and working conditions with the management. Maruti Suzuki rejected the demand and declared the strike "illegal". Negotiations between the workers and the management have stalled.

In recent years, India's US$30bn (Dh110.19bn) vehicle sector has cranked out more cars, lorries and motorcycles than ever before, a surge that reflects the country's economic boom.

By 2016, the fast-growing sector's contribution to India's GDP is set to double to 10 per cent. But a rash of labour disputes that in recent years have plagued small and big vehicle manufacturers alike - including Mahindra & Mahindra, Hyundai Motors and General Motors (GM) - threaten India's industrial miracle.

In June last year, 150 workers from the Korean car maker Hyundai's plant at Sriperumbudur in southern India went on a three-day strike, resulting in a production loss of 4,000 units that cost the company 1.3bn rupees. It was the fourth strike at the plant since 2008. In subsequent months, the company shifted production of some of its i20 model of hatchbacks from India to its plant in Turkey.

More than 700 workers at GM's facility in the western state of Gujarat went on a strike for more than a month in March, resulting in a production loss of about 2,500 units.

More than 1.6 million man-days in India were lost because of labour strikes and lockouts last year, according to data from the Labour Bureau. India's labour laws, which have not been revised since independence despite burgeoning economic growth, have proved toothless over the protests.

"Labour unrest is not something new to India", Professor EM Rao at the Xavier Labour Research Institute (XLRI) in Jamshedpur said last year. "What has changed, however, in the post-globalisation phase, is the realisation among the working class that their interests are closely intertwined with those of the employer."

Militant trade unionism broke out in India in the 1970s and 1980s, supported by Left-leaning political parties. But the country's business environment has changed dramatically in recent years as economic liberalisation opened up the economy to new companies and competition. Managements could no longer afford to pander to union demands.

Sporadic instances of labour unrest have continued to bedevil industries. Many union leaders complain that the spoils of industrial growth have not trickled down to them or their members.

"We want economic growth and industrial development. But can it be at the cost of the workers with the denial of basic rights to the working masses?" Gurudas Dasgupta, a trade union leader associated with India's ruling Congress Party, wrote in a letter last week to Manmohan Singh, the prime minister. "Trade unionism is the inherent right of the workers as guaranteed by the constitution. Maruti Suzuki [is] denying this basic right and is withholding congenial service conditions and even forcing workers to work at low wages."

The Maruti Suzuki Employees Union demands it be allowed to elect one third of its members from outside the company, which the management is vehemently opposed to.

"This is a classic communist ploy to get a foothold in unions," said an editorial published this week in Mint, an Indian business daily newspaper. "It only leads to militancy and misery. Lockouts, lost output and worker helplessness are the result."

The de-facto union is also demanding the reinstatement of 11 workers dismissed last month allegedly for inciting workers to protest. Maruti Suzuki's management has agreed to reinstate five of them.