By Amit Kumar, Sahil Vardhan, Ushmay Pratap Singh & Dev Tyagi
India's ambition of becoming a world-renowned manufacturing hub is largely dependent on the automotive industry's performance. The industry contributes almost 8 % to the country’s GDP, 49 % to the manufacturing GDP and 8 % to the total exports and employs around 37- 40% of the manufacturing workforce; it is the engine of industrial growth in India. However, the CRUSHED 2025 report released by Safe in India Foundation (SII) reveals a disconcerting aspect of this growth, namely the severe incidence of injury to workers in the factory working space, which begs the question: At what cost are we growing economically?
It is also encouraging that the findings of the report received national media attention when they were referenced in the Economic Survey 2024–25, which was a significant moment in how policymakers connect workplace safety with productivity. It heralds a much-needed shift; workers' welfare is not a peripheral issue, it is a core driver of industrial performance.
CRUSHED 2025: A Wake-Up Call from the Factory Floor:
Since the Safe in India Foundation’s (SII) inception in 2016, it has identified and supported over 8,500 injured workers, more than 7,000 from automotive manufacturing units alone. This is not just a series of numbers; they reveal a dark pattern of institutional neglect. The CRUSHED 2025 report reveals a shocking lack of robust safety standards in Tier-2 and Tier-3 supplier factories, which not only sit behind a veil of invisibility in India's auto sector but also form its invisible backbone.
Crush injuries—most often to fingers and hands—account for nearly 75 per cent of all reported injuries. On average, two fingers are lost per accident to injured workers. The most common reasons for these accidents include the unsafe use of a power press machine, lack of maintenance, and having an untrained worker operate the machine. The absence of safety gear, as well as the absence of machine guards, only exacerbates the issue. Fatigue is also a big factor in these injuries. As many as 76% of workers stated that working overtime is not an exception but a normal expectation. There are workers who regularly work more than the legal limit of hours, i.e. more than 9 hours a day permitted under the Factories Act, 1948. This is a worrying trend in the industry, and it is often caused by the constant pressure to meet production goals. This normalisation of long work hours, along with poorly regulated workplace conditions and frequent delays in registering workers with the Employees' State Insurance Corporation (ESIC), makes blue-collar work very dangerous. In these kinds of places, workers are very vulnerable to both physical harm and financial harm because they don't have access to timely medical care and social protection.
When Injury Becomes a Life Sentence:
The consequences of these injuries extend far beyond physical injury. The majority of affected workers are young, often migrants, working on temporary or contract terms. A workplace injury can immediately deteriorate their financial security, particularly while their ESIC benefits are on hold or rejected. This loss of livelihood not only endangers families into cycles of poverty, but it also represents a reduction in the economy’s overall productivity.
Why the Auto Sector is India’s Best Bet—If It’s Made Safer:
India’s labour productivity remains worryingly low, as India ranks 133rd amongst all countries in 2023, as per the International Labour Organisation (ILO). The situation is worsened by the frequent injuries reported in the sector. For example, injuries in the workplace alone are estimated to account for a ₹ 12.5 lakh crore annual cost to the economy (4.2% of GDP), providing an economic rationale for better workplace conditions in high-growth areas (like auto manufacturing). The automobile sector contributes 7.1% to the Gross Domestic Product (GDP) and employs around 3% of the workforce. The difference in productivity is enormous: an average auto worker contributes ₹15–20 lakh per year, compared to ₹70,000 by an agricultural worker. But this productivity advantage is tenuous. Without robust investments in occupational health, workplace safety, and formal labour standards, the industry's advantage could be easily lost.
Enterprises should recognise that continuing collapses of safety systems, low-road hiring methods and weak enforcement (especially in the auto ancillary factories) not only harm workers' welfare, but also the performance of the industry in the long run.
Laws on Paper, Gaps on the Ground:
The Occupational Safety, Health, and Working Conditions (OSH) Code of 2020 represented a comprehensive overhaul of India's disaggregated regime of labour safety law as a whole. But over four years after the code was made, the implementation of the code had stalled across the country. The stalled implementation has created a regulatory void, which is disproportionately affecting Micro, Small and Medium Enterprises (MSMEs) that have little systemic regulation and no institutionalised routine compliance. With no observable enforcement, for most MSMEs, compliance efforts to safety norms are uncoordinated, erratic, and difficult to execute without institutional support for consistent compliance. Gaps in the regulatory oversight of OSH were presented in the Economic Survey 2024 - 2025, with a pragmatic suggestion to the government for various options for better OSH regulatory governance, including systematic data collection, enhanced approaches to targeted, incentives-based compliance, and inclusion of OSH within Environmental, Social and Governance (ESG) frameworks.
Global Lessons from Factory Floors That Rebuilt Nations:
India can learn a lot from countries that have shown that development and safety can indeed coexist. After the 2013 Rana Plaza disaster 2013, Bangladesh undertook the reform of its garment sector in a bid to restrict lax safety standards and mechanisms of compliance. These changes led to improved safety for workers and, hence, bolstered the country in competing at the global level as well as establishing its reputation. Vietnam's ongoing efforts in occupational safety have brought not only huge gains in productivity but also stronger interlinkages of its supply chains with those of other countries. These examples illustrate an inarguable principle: did workplace safety act as a barrier to growth, or was it the foundation of lasting economic resilience?
A Blueprint for Safer, Smarter Factories:
Improving workplace safety at the automobile level would require corporations to cooperate with other stakeholders in order to address systemic gaps and implementation issues. First, enforcement should be stronger and become a routine activity. This should include mandatory third-party safety audits, surprise inspections, and extending the liability of Original Equipment Manufacturers (OEMs) down the entire supply chain. OEMs engage directly with consumers, so it would be reasonable to expect that they enforce safety norms on each supplier from which they procure services or materials, other than their own flagship units. Secondly, capacity-building interventions for MSMEs are necessary. Many cannot procure certain safety services or technologies that would best serve their needs. Such services may be affordable safety audits and technical training for supervisors, or financial incentives to purchase new technology. Industry-based alliances could also institute common centres for training and develop mentoring networks to aid in institutionalising safety practices.
Thirdly, it is necessary to ensure the transparency of the process. A common, open-access database should track safety violations, work-related injuries, and the status of ESIC claims. The above data will allow increased accountability and let regulators, workers, and civil society argue for the necessary corrections. Lastly, ESIC coverage is mandated by law enforcement, but it is inconsistent, particularly for contract and migrant workers. Employers must take responsibility for registering workers from the beginning. Equally important is the expeditious response to claims and providing prompt and courteous assistance for workers dealing with injuries. ESIC needs to be universal, and with quick compliance, it would protect workers and support the legitimacy of labour institutions in India.
Don’t Let Growth Crush the Hands That Build It:
Workplace safety is both a matter of ethical responsibility and a strategic lever for boosting productivity and growth. India’s aspirations to become a global manufacturing hub cannot be sustained if the fundamental rights of its workforce are overlooked. Poor safety standards undermine productivity, elevate operational costs, and erode investor confidence. Protecting the workforce with confidence is key to boosting operational efficiency, attracting responsible investment, and strengthening India’s position in global value chains. If India aims to climb the global value curve, it must first ensure that the very hands shaping its future are not being harmed in the process.
The views expressed are not necessarily those of The South Asian Times
