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Taiwan firms wary of moving manufacturing to India after Wistron plant riot

Cultural differences, labor management among factors keeping Taiwanese firms away from subcontinent

Factory employee making quality checks on latest batch of rubber (Getty Images photo)

Factory employee making quality checks on latest batch of rubber (Getty Images photo)

TAIPEI (Taiwan News) — Taiwan’s economics minister urged the Indian government to address Saturday's (Dec. 12) riot at a Wistron Corp factory, as it could dampen other Taiwanese companies' interest in setting up production bases in the South Asian country.

Minister of Economic Affairs Wang Mei-hua (王美花) said Tuesday (Dec. 15) that Taiwanese officials have been instructed to probe the incident with the assistance of the Indian government. If not properly managed, the issue will hurt India’s credentials as it seeks to attract foreign investors, CNA quoted Wang as saying.

The riot, which involved some 2,000 workers ransacking Wistron’s Narasapura factory in the Indian state of Karnataka on Dec. 12, allegedly over unpaid wages and other labor violations, has sent shockwaves through the Taiwanese business community.

Tech firms in Taiwan have viewed the prospect of setting up manufacturing units in India with some trepidation, reported Business Week. The factors discouraging Taiwanese companies from investing in the country span contractor management, labor availability, and cultural barriers.

The absence of a significant Taiwanese business presence, currently amounting to about 200 companies and several hundred employees, on the subcontinent has made doing business there difficult. In comparison, New Delhi boasts an industrial cluster home to 8,000 Japanese, and over 10,000 South Koreans are working in India, with “Korean villages” sprouting up in major cities like Chennai.

The linguistic and cultural complexities, including the caste system, have created hurdles for corporate management. In addition, the necessity of partnering with contractors comes with the risk of poor labor practices and requires rigorous operational audits, wrote Business Week.

According to The Times of India, the riot was triggered by labor disputes and fueled by miscommunication with at least six contractors involved in worker recruitment. Apple has launched an investigation into allegations of breached supplier guidelines and unpaid wages, reported Reuters.

Updated : 2021-09-24 22:10 GMT+08:00