MARKET REACTS: Shares of Maruti Suzuki, India’s top carmaker, plunged after the company said it would impose an indefinite lockout at a factory in India that was wracked by a deadly labor dispute last week.
SOURCE OF ANGER: New Delhi has been trying to boost Indian manufacturing, which policymakers hope will provide jobs as India struggles to transform itself from an agricultural economy. But India’s labor laws have compelled many companies — including Maruti Suzuki — to rely heavily on contract laborers, who are easy to fire and get far less in salary and benefits than permanent workers.
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BROADER RIPPLES: The violence threatens to further damage India’s waning investor appeal and slow the expansion of Indian manufacturing. Many investors have already been put off by corruption scandals and regulatory uncertainty. The automobile sector has been a bright spot on India’s troubled path to industrialization, with many global carmakers setting up shop here to serve the fast-growing domestic market and establish a low-cost export base.
