Informality and Precarious Work in Production Chain Capitalism

A Case Study of the Automobile Industry in India


  • Surendra Pratap
  • Annavajhula J.C. Bose


Automobile industry, India, value chain dynamic, informality, precarious labour, trade union


In production chain capitalism, informality and precarious work are systematically created in and built into the value chains to reduce the cost of production and maximize profits. Using a case study on the automobile industry in India, this paper shows that fluctuations in workforce generally occur more at the lower ends of the value chain, artificially created by buyers at the higher end of the value chains as part of a strategy to minimise the bargaining power of suppliers and put downward pressure on the prices of parts. Therefore, engaging contract workers is part of a bigger strategy of profit maximization that exploits cheap labour not to meet the needs of flexibility. The value chain dynamic itself also creates informality of small enterprises at the lower ends of the value chain, which blocks any upward mobility of these enterprises. Thus, the presence of effective trade union movement at the firm level, in the case of larger firms, and at the industry level, in the case of small enterprises, emerge as the most important factors that can potentially minimise the pains of informality and precarious work.

Author Biographies

Surendra Pratap

Surendra Pratap is the director of the Center for Workers Education (CWE), an organization that provides research, education, and training for the working class movement in India. His recent publications include Emerging Trends in Factory Asia: International Capital Mobility, Global Value Chains, and the Labour Movement (2014). He has an MA in Economics from Dr. B. R. Ambedkar University in Agra, India; a Bachelor of Laws from Lucknow University; a Master of Science (Environmental Sciences) degree from GB Pant University of Agriculture and Technology in Pantnagar; and a Bachelor of Science from Kumaun University in Nainital. Email:

Annavajhula J.C. Bose

Annavajhula J.C. Bose is an Associate Professor at the Department of Economics of Shri Ram College of Commerce, University of Delhi, India. He has done research on subcontracting as a specific form of industrial organisation in production chain capitalism and on labour relations in the automobile industry. Email:


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How to Cite

Pratap, S. . and J.C. Bose, A. (2015) “Informality and Precarious Work in Production Chain Capitalism: A Case Study of the Automobile Industry in India”, Asian Labour Review, 1(1), pp. 67–100. Available at: (Accessed: 20 May 2024).