Samsung Electronics is facing major setbacks as labor disputes at its Sriperumbudur factory in India escalate without resolution. South Korean industry observers warn that the prolonged strike threatens to undermine Samsung's growth momentum in the world's most populous market. Beyond immediate production disruptions, the ongoing labor unrest could damage the company's corporate reputation in a region increasingly critical to its global strategy.
According to industry sources cited by the South Korean media outlet Businesspost, the strike at Samsung's Sriperumbudur factory, which began on February 5, 2025, has now lasted over a month without any signs of resolution.
Indian media outlet The Hindu recently reported that the Samsung India Workers' Union (SIWU), backed by the Centre of Indian Trade Unions (CITU), held negotiations with Samsung management on February 27. However, both parties failed to reach an agreement.
Dismissal of labor union executives
The strike was triggered by Samsung's dismissal of three SIWU executives. On January 31, these executives met with Samsung India's senior management to request negotiations over labor intensity concerns. Samsung rejected their request, prompting SIWU to stage a brief, 30-minute work stoppage at the factory. Shortly afterward, Samsung suspended the three executives and later added 14 more employees to the suspension list.
Since February 5, around 500 workers—accounting for 28% of the factory's 1,800 employees—have been on strike, demanding the reinstatement of the dismissed workers and improved employee benefits.
Although the Tamil Nadu state government has attempted to mediate the dispute, tensions have only worsened, with indications that protests may expand further.
This is not the first labor dispute at the Sriperumbudur factory. In September 2024, workers staged a 38-day strike, demanding union recognition, better working conditions, higher wages, and expanded benefits. While an agreement was eventually reached, Samsung remained resistant to unionization efforts.
After more than 200 days of legal proceedings, the Tamil Nadu District Court officially recognized the legitimacy of the Samsung India Workers' Union in late January 2025. With this legal backing, the ongoing strike is expected to be more difficult to resolve than previous disputes.
Samsung's tough stance and market risks
A Samsung India spokesperson stated that all employees must comply with company policies and that violations will result in disciplinary action based on the law, signaling that Samsung is unlikely to back down easily. However, as the strike persists, production has been significantly affected, with only some lines remaining operational.
India, with its 1.4 billion population and annual economic growth of 6–7%, is a vital market for Samsung. The Sriperumbudur factory alone contributes about one-third of Samsung India's total revenue. While India presents vast growth potential, South Korean industry analysts caution that continued labor unrest could severely hinder Samsung's long-term expansion in the country.
As geopolitical tensions between the US and China intensify, India's role as "the next China" has drawn increasing global interest. With improving living standards, Indian consumers are driving demand for smartphones and home appliances.
In 2024, Samsung sold approximately 34.66 million Galaxy S24 AI smartphones in India, representing an 18% increase over the previous Galaxy S23 series. The company also holds a strong position in India's home appliance market, with a 22% market share in TVs, 20% in air conditioners, 14% in refrigerators, and 12% in washing machines.
"Currently, smartphones generate around 70% of Samsung India's revenue, with home appliances accounting for the remainder. However, as India's home appliance market expands, this distribution is expected to shift to an even 50-50 split between smartphones and home appliances in the coming years."
Article edited by Jerry Chen
