The ambitious path of India’s $5 trillion economy hinges on the success of its manufacturing sector and managing the growing aspirations of the work force.

As per NITI Aayog, the contribution of high-performing states such as Tamil Nadu, Maharashtra and Gujarat are key to robust growth of the manufacturing sector. However, the ongoing labour strikes and unrest in the key industrial state of Tamil Nadu present a major challenge.

Partha Pratim Mitra, former principal labour and employment adviser, Ministry of Labour and Employment, GoI, said, in the recent past Tamil Nadu, home to several global manufacturing companies such as Samsung, Apple, and Renault-Nissan, has seen repeated episodes of labour strikes.

These disruptions not only halt production but also pose a threat to India’s global manufacturing ambitions, he added.

It is imperative to strike a balance between guarding workers’ rights and boosting industrial productivity, he said.

Without swift resolution, labour unrest tarnishes the state’s image as a reliable destination for foreign investment, affecting both regional and national growth, he said.

According to NITI Aayog, the manufacturing sector’s Gross Value Added grew by 7.3 per cent in FY23, with Tamil Nadu playing a critical role, contributing significantly to India’s overall industrial output. The state accounted for over 9 per cent of India’s exports, with electronics exports alone surging by 77 per cent year-on-year.

Labour strikes tend to not just affect production, but also erode investor confidence. There is a need for a greater understanding between the trade union and the owners of the enterprises so that the workers get their due compensation, said Mitra.

The poor working condition at Foxconn’s Tamil Nadu facility led to a three-week shut-down of production in 2022. Similarly, strikes at Renault-Nissan over wage disputes halted production for days, costing both the company and the state valuable revenue.

Addressing valid worker concerns must not become barriers to national growth.

Tamil Nadu’s proactive steps in attracting foreign investment of ₹76,000 crore during Chief Minister MK Stalin’s visit to the US was commendable. However, frequent strikes send mixed signals to potential investors.

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