India escapes a massive strike at its cargo ports

By

Matthieu Guinebault

Published
August 30, 2024

While the local textile industry was worried about the strike announced by more than 20,000 dockworkers in Indian ports, the unions finally postponed the industrial action following an initial meeting with the government, against a backdrop of revised wages and allowances.

"The indefinite national strike called by six federations of port workers and dockers from August 28 has been postponed following a memorandum of understanding between the President of the IPA (Indian Ports Association), the Director General of the IPA and representatives of the six federations," said a press release from the unions concerned.

The threat to the activity of a dozen Indian ports followed the planned reform of the pay structure for workers, as well as changes to their pensions. The social partners are said to have finally agreed on changes to the statutes, and even laid the foundations for a future revision on January 1, 2027.

The tension in the Indian ports was being closely monitored by the textile and clothing industry, both locally and internationally. The Indian industry is going through a period of reflection, with textile and clothing exports growing by just 4.6% in ten years, compared with explosive growth for some of its Asian competitors. And the difficulties encountered upstream in the industry have even recently prompted the government to call on manufacturers to turn to local rather than imported materials.

Added to the prospect of strike-induced delays was the fear of a further rise in freight prices. In the first half of the year, difficulties in accessing the Suez and Panama canals caused transport costs to soar between Asia on the one hand, and Europe and the US East Coast on the other.

India is a key supplier of textiles and clothing to the West. Last year, the country was the European Union's fourth-largest supplier of clothing, with goods worth €4.03 billion, down 13%. But its biggest customer remains the United States, for which India is also the fourth-largest supplier, with 4.5 billion dollars, after a fall of 21.4% over one year.