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Can the Indian Auto Industry truly become world-class while its workers’ are losing limbs?

One-third of these accidents can be prevented relatively easily by auto-brands creating awareness and some pressure in their supply chain. Here is a significant opportunity for the growing Indian automotive industry to improve worker safety and their productivity and quality in their supply chains

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It is a little-known fact that “more than 20 workers lose their hands/fingers every day just in Gurgaon”, most of them while making components for auto-brands. It was this shocking news that compelled three alumni of IIM Ahmedabad to launch Safe In India, a not for profit organisation. This hazardous automotive supply chain in NCR is symptomatic of other manufacturing hubs in India. It’s a national challenge.

The impact of such injuries on the worker and his/her family is nothing short of catastrophic. Not only do they lose their capability for earning a decent livelihood, but such amputations (and lack of adequate compensation) also causes them to often return to their villages and become a life-long burden on their families and society.

There is also a strong linkage of worker-safety with productivity and quality. As IV Rao, former Executive Director (R&D) of Maruti Suzuki says, “factories that deliver good quality are also better run in most operational practices which include better working conditions and safe working practices”. 

With the growth of automotive sales in India, the scale of production of Maruti-Suzuki, Hero, Honda and other majors in NCR area has increased rapidly. Haryana is, reportedly, half of the auto-sector production. Although most OEMs have instituted world-class systems for productivity, quality and safety in their own plant, their quest for lower costs has led to the manufacturing of a large number of components in a deep supply chain, which has layers of poorly designed and badly run lower-tier supplier factories. Workers in these factories suffer from pressures of over-production, lack of training, disuse/elimination of safety mechanisms and being employed as lowly paid helpers while being asked to operate machines - a skilled operator job.  

SII started the initiative in 2016 and has since helped over 2,400 injured workers with their healthcare and compensations from Employee State Insurance Corporation (ESIC). With the knowledge obtained from these workers, in 2019, it started working towards accident avoidance. SII published its seminal report, CRUSHED 2019 last year and has now published the sequel - CRUSHED 2020 - that provides deeper insights based on over 1,800 injured workers’ experiences:

  • A large majority (60-80%) of workers are migrant, young and contractual.
  • 70% of injuries resulted in the amputation of fingers or hands.
  • Power presses caused 60% of the injuries; 90% of these presses had absent/malfunctioning safety sensors/mechanisms.
  • While 95% of injuries occurred in the supply chains of Maruti-Suzuki, Hero and Honda, these factories are also supplying to Ashok Leyland, Eicher, Escorts, JCB, Mahinda, Tata, TVS and Yamaha.
  • Until 2017, there was a serious under-reporting of cases by Haryana and number of factory inspections are reducing significantly. Public data is not available from 2017.

Based on the above analysis, SII has made several recommendations to key stakeholders:

Maruti, Hero & Honda: to jointly form a Task Force on supply chain safety and implement safety practices at all levels in their supply chain.

SIAM & ACMA: to form a national task force/initiative to professionalise and improve industrial safety across the sector, in all auto-hubs in the country.

Central Government: to enforce industrial safety regulations and publish accident information; make public its actions based on Crushed 2019 (for which it formed a safety committee under DG Fasli, its worker-safety arm), and form a joint government-industry task force on the auto sector supply chain.

Haryana State Government: to create a clear and effective plan for the new safety committee it has now created.

Ministry of Skills Development: to set up workers’ skill centres’ and include safety in those skills.

Ministry of MSME: to improve safety awareness and skills in the auto sector supply chain.

NITI Aayog: to set tangible targets against SDG Indicator 8.8.

SII believes that the auto-brands need to take leadership in the issue and has therefore been engaging with large auto-brands since last year. While Maruti-Suzuki has engaged reasonably well with SII and has taken initial steps, the response from Hero and Honda has as yet been lacklustre. SIAM and ACMA have now agreed to work with SII to bring about systemic changes to improve the situation. 

One-third of these accidents can be prevented relatively easily by auto-brands creating awareness and some pressure in their supply chain. Here is a significant opportunity for the growing Indian automotive industry to improve worker safety and their productivity and quality in their supply chains. Note how Bangladesh has not only improved safety in its garment sector post-Rana Plaza fire where more than a 1000 workers died but also did relatively well during Covid19 crisis. Instituting measures at this stage will ensure long term sustainability of the sector by improving its overall competitiveness. Only then can the Indian automotive industry truly become “world-class”.

CRUSHED  2020 is available here.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Vinay Dixit

Vinay Dixit is a Business Transformation Expert, Strategist and Leadership Mentor based in Singapore. He is an alumnus of IIM Ahmedabad and IIT (BHU) Varanasi and has held senior leadership roles in Electrolux, McKinsey & Co, General Motors & Unilever. His areas of focus include transformative growth in Emerging Markets, Integrated Marketing strategies with an emphasis on Digital, and end-to-end M&A deal sourcing, transaction & integration

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Sandeep Sachdeva

Sandeep Sachdeva is an international banker who, after leading large global banking businesses in three continents, retired in his mid-40s to pursue his personal interests. He has since co-founded Safe in India Foundation, his chief passion, and is its current CEO. He is also an active board-member of a number of large social enterprises in the UK and Europe, which he has helped restructure and turn-around/grow. Sandeep is a graduate of IIT Roorkee and an MBA from IIM Ahmedabad

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