A view of the Samung plant where workers of Samsung India Electronics went on strike in Chennai, Tamil Nadu, India, Sept. 16. EPA-Yonhap

The ongoing strike at Samsung Electronics' plant near the Indian city of Chennai may seriously threaten the country's prowess as a major global manufacturing hub, according to a recent report from an Indian think tank.

In a report published on Monday, the Global Trade Research Initiative said the strike is "threatening Tamil Nadu State's position as a leading electronics manufacturing hub" and could lead to "job losses, stalled development and a significant decline in investor confidence."

About 1,500 workers at Samsung's plant in Sriperumbudur, a town in the southern Indian state of Tamil Nadu, have been staging a walkout over two weeks, demanding higher wages and reduced working hours. The plant manufactures electronic appliances, including televisions, refrigerators and washing machines.

The strike is assisted by the Centre of Indian Trade Unions (CITU), an umbrella union with more than 7 million members, affiliated with the Communist Party of India. The CITU says that the average monthly wage of workers at the plant should be raised from 25,000 rupees ($300) to 61,000 over the next three years, up 36,000 rupees.

Samsung says that the average monthly wage for its workers is now 35,000 rupees, while the average monthly pay for manufacturing workers in Chennai is 19,250 rupees.

The strike has significantly disrupted the plant's productivity, which contributes roughly 20 percent of Samsung's total annual revenue of $12 billion in India. According to local news reports, the plant's production rate plunged to nearly 50 percent until Samsung hired some fixed-term employees and returned capacity back to normal as of this week.

Indian workers at Samsung India Electronics participate in a strike in Chennai, Tamil Nadu, on Sept. 17. Nearly 100 workers, along with E. Muthu Kumar, the leader of the Centre of Indian Trade Unions and President of the Samsung India Workers Union, were arrested on the morning of Sept. 16 but were later released. The protests by Samsung employees enters its ninth day, as they continue to demand better wages and improved working conditions. EPA-Yonhap

The report noted that the unrest at Samsung is casting doubt on India's ability to maintain stable manufacturing operations, a key factor for investors and multinational corporations.

"If the strike at Samsung's Sriperumbudur plant is not resolved soon, India risks losing significant ground in its quest to become a global manufacturing powerhouse," the report said. "If the Tamil Nadu government does not intervene swiftly, the situation could mirror the closure of Nokia's Sriperumbudur plant a decade ago, resulting in job losses and shifting manufacturing dominance to China."

Nokia shut down its Chennai plant in 2014 after a combination of tax disputes with the Tamil Nadu government and mounting union pressures, which crippled Nokia's operations.

The report stressed that the risks of strikes are no longer confined to Samsung because the CITU is pushing for union recognition at other major manufacturers in the area, including Foxconn.

Low labor costs are one of the main reasons making India an attractive manufacturing outpost for global corporations. Data from Statista indicates that average annual wages in China's manufacturing sector were 97,528 yuan, equating to a monthly wage of $1,158.

In contrast, manufacturing workers in Chennai earn around $230 monthly, giving India a competitive edge in labor costs. However, an increase in labor disputes could deter global companies from investing in India.

"Labor instability could deter future investments," the report said. "Foreign investors are closely watching the situation at Samsung, and concerns over prolonged labor unrest may lead them to reconsider their plans in India."

The report stressed that the Indian government should step in to resolve the strike at the Samsung plant, and that the company also address the legitimate concerns raised by its workers regarding working hours and conditions.