Workers in Electronics Industry in India: The case of Samsung

2013-01-01
Issue No: 82 January-July 2013

By Surendra Pratap

Dynamics of Electronics Industry in India

The Indian state is currently focusing all its efforts to attract FDI in the manufacturing sector and to promote
technological development required to upgrade manufacturing and increase the level of value added
particularly in electronics manufacturing. The electronics industry’s share in India’s GDP is only about 2
%. On the other hand, the demand in the Indian market was US$45 billion in 2008-09 and is expected to
reach US$ 400 billion by 2020. The gross manufacturing value added in the Indian electronics industry
has been very low, anecdotally between 5 to 10%. This means that out of the demand of US$ 45 billion,
between US$ 1-2 billion was value added in the country and the remainder was the cost of imported
components. In value terms, the sector’s imports are second only to the country’s oil imports. If this
situation continues, by 2020, electronics imports may exceed oil imports.[1]

It is worth mentioning that globalization and liberalization in India gave a boost to the IT and ITES sectors
rather than to electronics manufacturing. During the period 1991-2008, the electronics industry experienced
an overall annual growth of 23.69%. However, major contribution in this growth was by the software and
services industry that grew at the annual rate of 40.63% during this period, while electronics hardware
experienced a growth of only 14.34%. Actually, production of electronics hardware as a proportion of total
production in electronics industry has been continuously declining. It declined from 45% in 2000 to 26%
in 2008. If we look at the contribution of electronics manufacturing by sector, consumer electronics, and
communications and broadcast equipments are the major contributors. The data clearly indicates that labour
productivity and capital productivity in this sector has risen significantly from 1995-96 to 2004-05.[2]

Whatever few studies have been conducted on electronics manufacturing in India clearly expose the fact
that working conditions in electronics manufacturing are one of the worse.[3] The expansion of the
electronics industry in India is relatively new and the majority of workforce is represented by first
generation workers. Therefore the unionization of electronics workers in private sector is almost completely
a new beginning. One of the major difficulties of organizing private sector electronics workers has been the
small size of enterprises and scattered presence of electronics manufacturing units. With the opening of the
Indian economy and with a declared focus on promoting electronics manufacturing, now many larger
electronics manufacturing units with comparatively larger workforces are being established by major global
players in electronics industry. Moreover, in order to provide better infrastructure facilities to investors, a
strategy of clustered development of the electronics industries is being promoted, and therefore a number
of electronics manufacturing clusters are emerging, like NCR Delhi, Mumbai (Maharashtra), Bangalore
(Karnataka), Sriperumbudur (Tamilnadu). In near future, Hyderabad and Visakhapatnam in Andhra
Pradesh, Rohtak in Haryana and Bhiwadi in Rajasthan are also going to emerge as important electronics
manufacturing centers, as huge electronics manufacturing clusters are proposed in these centers.[4] All
these developments promise immense opportunities for initiating a major effort for organizing the
electronics workers in India.

Samsung Electronics in India

Samsung began its operations in India by establishing a manufacturing complex in Noida in Uttar Pradesh
(UP). This complex houses facilities for the production of colour televisions (including 3D, LED and LCD
screens), mobile phones, and refrigerators, washing machines and split unit air conditioners. In 2007,
Samsung started its second state–of-the-art manufacturing complex at Sriperumbudur in Tamil Nadu, which
manufactures colour televisions, fully automatic front-loading washing machines, refrigerators and split-
unit air conditioners. Samsung has also established two R&D centres in India, Samsung India Software
Centre (SISC) at Noida and Samsung India Software operations unit (SISO) in Bangalore.

Samsung India has emerged as a market leader in product categories such as LED TVs, LCD TVs, Slim
TVs and Side-by-Side Refrigerators. In 2010, Samsung’s market share in India in flat panel TV category
was 31.7% by value, and it was expected to reach 35% in 2011.[5] Samsung is the second largest mobile
handset brand in India and leads in the smart phone segment. The Company brought in investment of more
than US$70 million in 2011 towards tripling the capacity of mobile phone manufacturing unit at Noida.[6]
The turnover of Samsung India Electronics Limited (SIEL) in 2011 stood at about USD 3.65 billion.[7]
SIEL contributed 2.5% of Samsung’s global turnover.[8]

At its mobile phone manufacturing unit in Noida the company manufactures multimedia, dual sim and
touch screen models. Information on supply chain of Samsung India electronics is very limited. It seems
that except body parts most of other components are imported from overseas. RiPE Component
Technologies Pvt. Ltd. based in Noida and Gurgaon supplies to it body parts of the mobile components. A
vacancy advertisement of Ripe Components Technology Pvt. Ltd, says that it is a Korean multinational
company having two state of the art manufacturing facilities at Gurgaon and Noida. Its employs 700 plus
manpower, manufactures electronics mobile components for Samsung Telecommunication India and is the
single source vendor of Samsung at India.[9]

IL-Jin Electronics India Private Limited is another major supplier to Samsung. IL-Jin is a Korean
multinational company with a great sectoral diversification of its manufacturing activities ranging from
automobile to electronics. IL-Jin electronics has a strong relationship with Samsung and IL-Jin Display is
expected to reach the number one spot in Korea in terms of revenues generated from touch panel shipments
in 2012, largely due to supplying its products to Samsung Electronics.[10] In India, IL-Jin has
manufacturing facilities in Noida, Greater Noida, Pune and Sriperumbudur. IL-Jin electronics India Pvt Ltd
is located at B-48, Hosiery Complex, Phase-II Noida. It mainly manufactures PCB of AC, Refrigerator,
Microwave Oven, Washing Machine etc, and supplies mainly to Samsung and LG.[11]

Working Conditions in Samsung Electronics India[12]

50% of the total workforce in the Samsung’s manufacturing complex at Noida is engaged in the mobile
phone manufacturing plant. There are a total of about 4,000 employees in the mobile phone plant including
the production workers, service workers and other staff. About 2,500-3,000 workers are engaged on
assembly lines and about 500-1,000 are engaged in packing and other related work. In this plant, Samsung
does not engage contract workers in its assembly line work. The contract workers are engaged in all
activities other than assembly line work, e.g. packing and related work.

According to the workers, about half of the total 2,500 to 3,000 assembly line production workers are
apprentice workers. The regular workers and the trainees form the other half of the workforce. It is very
clear that Samsung’s strategy of exploiting cheap labour is based on exploiting the apprentice workers.
Apprentice workers are engaged for one year. The system is such that every second or third month 150-200
workers complete their apprenticeship and leave the factory and a new batch of 150-200 apprentice workers
fill up these positions. Therefore, the apprentice workforce is always maintained at about 50% of the total
assembly line workers. Apprentice workers are trained and come from Industrial Training Institutes.
According to the workers, only about 0-4% of the apprentice workers are generally absorbed in the regular
workforce. After completion of one year apprenticeship, they are engaged as trainees for two years before
getting the status of regular workers. But the trainee status is not a surety of getting regular worker status.
Not all trainees are absorbed as regular workers. A significant number of women workers are also engaged
as production workers. Majority of workers in Samsung are migrants from distant districts of Uttar Pradesh,
the state where this manufacturing complex is located. However, there are some workers from other states
also.

Manufacturing operations in the plant involve mainly product assembly. No mobile phone component parts
are manufactured in the plant. The production/assembly process in Samsung is highly automated. The
production targets for assembly lines are set by fixing the tact time, that is, the time taken to complete a
specific task, and accordingly the total production target for the day. According to workers, the tact time in
the mobile phone assembly line is now only 3.5 to 4 seconds, i.e. the workers have to complete their specific
task in only 3.5 to 4 seconds. In other words every four seconds one mobile phone is delivered at the end
of assembly line. The production process is so hectic that the workers have no time or space for anything
other than doing their task. There is no time for even going to the toilet or having a drink of water. The
workers gradually learn how to avoid going to toilets during work time and how to quicken the pace of
work to get time to drink water while working. However, all these factors create serious health problems,
such as headaches, exhaustion and anxiety.

Additional problems are created by the continuous exposure to ionizing radiations, organic solvents, heavy
metals like cadmium and lead, and to chemicals that damage reproductive organs, such as arsine and
phosphate. Workers interviewed for this report were not aware of all the chemicals used and their impact
on health, but they were generally aware that they were continuously exposed to ionizing radiations that
may have a negative impact on their health.

According to the workers, the company has one dispensary within the company premises and the company
has a contract with the Kailash Hospital in Noida, about 10 kms from the factory. Workers normally visit
the company dispensary and only if they develop a serious condition they are admitted to Kailash Hospital.
One of the apprentice workers interviewed was suffering from intermittent bouts of fever for 16 days and
was receiving medicines regularly from dispensary. According to him the doctor in dispensary told him that
he was suffering from typhoid. However, he was regularly attending his duties. He said that whenever he
visited the dispensary he found that there were about 100 workers waiting for a check-up or medicine,
mainly with complaints of headache, fever, body pain etc.

There has been at least one incident which shows that workers’ health is being seriously compromised.
During the night shift on November 17, 2009, a mysterious gas leak or pesticide poisoning occurred at the
Noida manufacturing facility (said to have happened in washing machine assembly section) of Samsung
India Electronics, and more than 69 workers were hospitalized in Kailash Hospital. Most of them were
stable by the end of the day and discharged from the hospital next morning. However, around 15 workers
were said to be in a serious condition. Five of them were in the intensive care unit. All of them were
discharged from the hospital next day evening. According to the doctors at the hospital, "The victims may
have been exposed to carbon monoxide because of which they reported headaches and nausea while some
also fell unconscious.”[13]

On the other hand, the Superintendent of Police (City) said: "From the initial inspection, it seems that the
gas was probably LPG that got leaked from a pipeline in the lift installed in plant.”[14] It is interesting to
note that no enquiry took place and no action was taken by the labour department. It is also interesting to
note that this incident was very similar to the incident at Foxconn in Sriperumbadur on 23rd July 2010. In
both the cases, what actually happened, whether it was pesticide poisoning or gas poisoning or something
else, still remains a mystery.

The basic wages in the company are Rs.5,800 (~ USD 101 as on June 2013) for regular/skilled workers and
Rs 5,600 (USD 97.3) for apprentice workers per month. This is after statutory contributory deductions for
Employees State Insurance (ESI) and Provident Fund (PF). With increments, the wages of senior regular
workers have increased to about Rs 6,000-Rs 7,000 (USD 104.3 – 121.73) per month. However, the take
home wages, which includes overtime, is much more. The regular workers in general are earning between
Rs 10,000 to 12,000 (~ USD 174 to 209) per month or even more, if all various incentives and overtime
payments are included. It shows the intensity of overtime work in the company. Apprentice workers, on the
other hand, earn between Rs7.000-Rs 8,000 (USD 121.73 – 139.1) a month including overtime payments.
According to workers, two to four hours of overtime is the general practice, and so in practice the shifts
extend up to 10 to 12 hours. For example, the day shift starts from 8 AM in the morning and can be extended
to 8 PM at the night. Workers said that if the targets fixed for the day are not completed, they cannot leave
the factory without completing it. And this happens frequently. Many times due to increased demand, high
targets are fixed while the workforce remains the same, and these targets are completed by increased
intensity of work and extended overtime.

The rate of overtime payment for regular workers is about Rs 80 to Rs 90 (USD 1.4 to 1.55) per hour, and
for apprentice workers it is about Rs 40-Rs 50 (USD 0.7 to 0.8) per hour.

The assembly line workers, including regular workers and apprentice workers, are provided free transport
facility and free meals in the canteen. However, these facilities are not provided to contract workers
(engaged in non-assembly line works). In addition, apprentice workers are provided with free
accommodation for one-two months.

Workers reported that when one joins Samsung, initially he feels so happy because for few days he receives
very good behavior and treatment from supervisors and management. However, after only a few days, he
starts feeling bad and would never recommend anyone to join Samsung because once he starts working
with a specified task and target, he is only treated as a servant, and actually worse than the machines. Harsh
and abusive language is a general practice in case of any type of small problem.

The workers told that they are legally eligible to take prescribed leave days. However, in practice it is
difficult. Moreover, since the apprentices are engaged for only one year, they try by all means to not take
any leave and to be always in the good books of management, so that there are chances of being absorbed
into the regular workforce of Samsung.

Challenges for Organizing the Workers

There is no trade union and no system of formal representation of workers in Samsung Electronics in India
in any of its manufacturing facilities either in north or in south India. The major problems in organizing the
workers in Samsung and electronics industry in general are: a) Majority of workers are first generation
workers, not aware of their rights and very skeptical about trade union activities; b) majority of workers are
informal and the sword of unemployment is always hanging over their heads; c) a significant proportion of
workers are ITI apprentices who are not considered as workers under the law, so they have no interest in
union activities and also have fear of being dismissed without completing the apprentice period; d) Since
expansion of electronics industry is comparatively new, there are no bigger trade unions in this sector to a
initiate large scale unionization drive or at least support such initiatives.

However, with all limitations, the unionization process in electronics industry has already started. The
organizing dynamics is difference in various regions of India. In north India the electronics manufacturing
workforce is dominated by males (mostly migrants), while in South and west India women workers (mostly
from the surrounding rural areas) constitute 50-60% of the workforce. Moreover, in south and west,
particularly around Chennai, Bangalore and Mumbai there are special economic zones or electronics parks
where large number of electronics manufacturing units are located, like Nokia SEZ in Sriperumbudur,
Electronic City in Bangalore and Santacruz Electronics Export Processing Zone-SEEPZ (also hosts Gems-
Jewellery units) in Andheri, Mumbai. In the north there are some IT parks in Noida and Gurgaon, but most
of the electronics manufacturing units are scattered in NCR region and not located in any parks or Zones.
Also, there are differences in politics of labour and labour law enforcement machineries in SEZs in various
states. Probably these factors bring some crucial difference in dynamics of organizing in these two regions.
In south India, particularly in Sriperumbudur, there are more dynamic and successful efforts for organizing
the electronic workers. In Foxconn and Nokia the workers have already won the right to collective
bargaining and they have recognized trade unions. Now the struggle is to expose the yellow trade unions
and transform or replace them with democratic trade union. Strikes in Nokia and Foxconn can actually be
said to have started a new phase of electronic workers struggle in India. In many more companies in the
region, unionization efforts are so forceful that managements are trying hard to avoid union by forming
workers committees.

In the north, particularly in the national capital region of Delhi, there is very little success if any in
organizing in electronics workers. Recently Hind Mazdoor Sabha (HMS), a national TU Centre tried to
organize the workers in IL-JIN Electronics India Pvt. Ltd in its plant at Noida phase II. The company
engaged about 350 contract workers and 80 permanent workers along with few apprentices. According to
HMS activists, they successfully formed a trade union in the company and started raising demands of the
workers in July-August 2012. Significant number of contract workers also joined the trade union and
regularization of contract workers emerged as one of major demands. Another demand was for recognition
of trade union for collective bargaining. The management was not ready to accept these demands and started
victimization of workers. Management stopped the bus services to harass the workers after union began
discussion with IJE on converting contract for workers to regular status. On 10-11 August, 286 workers
including 22 permanent workers, and all HMS union officials were dismissed. Later the case of termination
of workers was referred to the Industrial Tribunal and it is still pending there. The management is not ready
to negotiate with the workers. It is to be noted that the workers were terminated without any notice and
without any enquiry to provide any space of being heard. This case is also reported in Annual Survey of
Violations of Trade Union Rights 2012.[15]

In Maharashtra, the birth place of electronics industry in India, attempts to organize electronics workers
started long back and in 1994, there was a strike in a computer unit of Tandon Group of companies located
in SEEPZ, during which 1500 workers were arrested and 150 were dismissed. Organizing attempts
continued later also however without any great success. Recently there are renewed attempts to organize
workers in SEEPZ but more focused on Gems-Jewellery rather than electronics. However, it also will
certainly act as an impetus for organizing efforts in electronics units in SEEPZ.

In almost all recent struggles and organizing attempts discussed above, it came out very clearly that the
degree of success depends on the degree of unity between informal (contract) workers and formal (regular)
workers. Therefore, integrating the issues of formal and informal workers and the ways and means to protect
informal workers emerges as the main concern for unionization strategies and struggles of electronics
workers. Moreover, this study brings out one more dimension in these concerns. Recent labour strikes (in
both electronics and auto industries) have forcefully challenged the strategy of using contract workers as
source of cheap and vulnerable labour, by successfully uniting informal and formal workers together and
putting forward the demands of equal pay for equal work and regularization of informal workers. It is in
this light, that employers are now increasingly working on other alternatives for exploiting cheap and
vulnerable labour force, i.e. exploiting the ITI apprentices in a big way, as is very clearly seen in case of
Samsung. In other electronics factories also apprentice workers are emerging as significant section of
workforce. Therefore, the issue of organizing apprentice workers may emerge as an important factor
determining the successes and failures in electronic workers struggles. The most important issue in this
regard is the issue of recognizing the apprentices as workers under the law. This issue can not be ignored
any more in strategies of organizing electronics workers.
This article is abridged version of author’s research paper ‘Workers in the Supply Chain of Electronics
Industry in India: The Case of Samsung’, published by AMRC and available
athttp://www.amrc.org.hk/node/1303

Endnotes:
Report of the Working Group on Information Technology Sector, Twelfth Five Year Plan (2012 – 17);
Ministry of Communications & Information Technology, Government of India 2012.
Productivity & Competitiveness of Indian Manufacturing – IT Hardware & Electronics Sector, Final Report
2010, National Productivity Council, New Delhi; http://nmcc.nic.in/pdf/ITHardware_03July2010.pdf
Phony Equality: Labour standards of mobile phone manufacturers in India; Finnwatch, Cividep & SOMO,
September 2011; http://makeitfair.org/en/the-facts/reports/phony-equality)
10 electronics manufacturing clusters likely to come up in India by year-
end;http://www.thehindu.com/news/national/karnataka/10-electronics-manufactu...
Samsung India targets Rs 25k cr revenue this year; http://articles.economictimes.indiatimes.com/2011-09-
09/news/30135510_1_...
Official website of Samsung India: www.samsung.com/in/
Samsung eyes 25-30% growth in Indian business this
year;http://articles.economictimes.indiatimes.com/2012-04-19/news/31367820_1_...
Samsung India targets Rs 25k cr revenue this year; http://articles.economictimes.indiatimes.com/2011-09-
09/news/30135510_1_...
Ripe Component Technologies Pvt. Ltd; http://www.123eng.com/forum/f22/ripe-components-
technologies-pvt-ltd-29845/ ; accessed on 21st June 2013
Ricky Tu, Iljin Display expected to become number one touch screen supplier in Korea by the end of 2012;
DIGITIMES Research, Taipei, 27 December 2012;
http://www.digitimes.com/Reports/Report.asp?datepublish=2012/12/27&pages... accessed on 21st June
2013
Iljin Electronics India Pvt. Ltd; http://www.123eng.com/forum/f22/production-supervisor-jr-executive-@-
107... accessed on 21st June 2013
Source of information for this section are mainly the interviews with workers of Samsung Electronics in
Noida conducted in the month of August, 2012
69 rushed to hospital after gas leak in Noida; http://articles.timesofindia.indiatimes.com/2009-11-
18/delhi/28112873_1_...
Gas leakage in Samsung's Noida plant affects 50 workers; http://topnews.in/gas-leakage-samsungs-noida-
plant-affects-50-workers-22...
Annual Survey of Violations of Trade Union Rights- India, 6 June 2012; International Trade Union
Confederation, 2012; available at: http://www.refworld.org/docid/4fd88948c.html; accessed on 2 June
2013
Type:
Updates
Country:
India