Rs 12.5 Lakh Crore – 4.2% of GDP – Lost to Unsafe Work Each Year; Auto Sector Key: Report

New Delhi: Workplace injuries in auto-component factories supplying India’s leading automobile manufacturers are rampant, and a new report highlights just how serious the issue is.

CRUSHED 2025 is the seventh annual report on worker safety in India’s automotive manufacturing sector, authored by the Safe in India Foundation (SII). Based on first-hand assistance to injured workers and documented industrial accidents, the report examines the scale, nature and causes of workplace injuries in auto-component factories.

The report draws on data from more than 7,000 injured workers assisted by SII between 2019 and 2024, documenting persistent crush injuries, unsafe and illegally operated machinery, violations of labour laws, and the systematic under-reporting of accidents. It finds that nearly four out of five grievous injuries occur in auto-component units, with power press machines alone accounting for about 75% of all crush injuries. On average, workers lose two fingers per accident; a level of injury severity that has shown no improvement over the past six years.

The report talks about how an overwhelming majority of accidents take place inside factories during routine operations. Nearly 90% of the injuries recorded occurred on the shop floor, often on poorly maintained machines, while only 11% of injured workers in Haryana and 5% in Maharashtra were hurt in road accidents.

Migrant, young, contractual and disposable

In Haryana, 87% of injured workers were interstate migrants, while in Maharashtra the figure stood at 62%, including a large number of intra-state migrants. Across both states, more than 65% of injured workers were on non-permanent contracts, and nearly three-quarters had education levels below Class 10.

Speaking to The Wire, human rights advocate Shalini Gera said: “The burden of these injuries continues to fall disproportionately on the most vulnerable workers.”

Alarmingly, one in five injured workers was a helper, an unskilled role under labour law, illegally made to operate hazardous machinery meant only for trained operators. These helpers suffered injuries as severe as skilled operators, pointing to routine violations of safety norms and skill classifications.

Women workers remain at particular risk. The report notes that women are often deployed on high-risk machines, paid less than men for identical work, and denied promotions or skill upgrades; factors that compound both injury risk and post-accident economic insecurity.

Labour codes exist only on paper

Despite the promise of streamlined worker protections under the new labour codes, CRUSHED 2025 finds widespread and routine violations at the factory level. Among injured workers surveyed, 76% reported working more than 48 hours a week, including 22% who said they worked over 60 hours. Over a quarter were paid below minimum wages, 97% had never been issued formal appointment letters, and 92% reported discrepancies in their salary slips, most commonly the suppression of overtime hours.

Safety lapses were equally pervasive. More than 90% of injured workers said machines lacked basic safety guards or sensors, while half reported that machinery was inspected only after an accident occurred. In many cases, supervisors ignored workers’ repeated warnings about faulty equipment, pointing to a work culture where production targets routinely trump safety.

Accidents hidden, records falsified

One of the report’s most serious findings concerns under-reporting. In Haryana alone, SII assisted nearly 20 times more injured workers in 2022 than the number of non-fatal accidents officially reported to the Directorate General Factory Advice Service and Labour Institutes (DG FASLI). The gap points to systematic concealment of injuries to avoid inspections, compensation claims, and legal scrutiny.

In many cases, employers allegedly pressured workers to falsely report factory injuries as road accidents or delayed filing accident reports altogether.

Speaking to The Wire, Sandeep Sachdeva, CEO, Safe In India Foundation, said: “The primary data source for DGFASLI is the annual administrative records submitted by state-level Directorate of Industrial Safety and Health (DISH) offices. However, this reporting mechanism is plagued by inconsistencies.”

“The data gap indicates a dual failure: factories failing to report incidents to state authorities, and a subsequent lack of coordination between DISH and DGFASLI.”

‘ESIC after the accident, if at all’

Access to statutory social security remains fragile. Nearly two-thirds of injured workers received their Employees’ State Insurance Corporation (ESIC) e-Pehchaan card only after their accident, instead of at the time of joining employment as mandated. In Maharashtra, the situation was worse, with 77% receiving ESIC registration post-injury.

Workers were frequently taken to private hospitals instead of ESIC facilities during the critical first hours after injury, often because employers had not completed required paperwork. While this trend has marginally improved, almost half of injured workers still receive initial treatment outside the ESIC system, increasing medical costs and long-term disability risks.

“Most notably, a significant disparity remains between injury statistics reported by DGFASLI and the ESIC, representing a critical lack of data synchronisation within the Ministry of Labour & Employment,” added Sachdeva.

A productivity crisis disguised as a labour issue

The report situates worker safety as a macroeconomic issue, echoing the Economic Survey 2024–25, which acknowledged occupational safety and health (OSH) as central to productivity and MSME competitiveness. SII estimates that unsafe working conditions cost India Rs 12.5 lakh crore annually; that's around 4.2% of GDP gone through lost productivity, medical costs, and long-term disability.

India currently ranks around 130th globally in labour productivity, a position the report links directly to unsafe and unprofessional manufacturing practices.

SII has also released its 2025 edition of SafetyNiti, the annual report that tracks occupational safety and health (OSH) policies and practices across the supply chains of India’s top 10 automobile manufacturers by net sales, including Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai, Bajaj Auto, Hero MotoCorp, TVS Motor, Ashok Leyland, Eicher Motors, and Honda Motorcycle & Scooter India. While the report notes incremental improvements in formal policies, it finds that implementation on factory floors – particularly in Tier 2 and Tier 3 supplier units – continues to lag far behind.

Calls for accountability

Safe In India Foundation has urged automobile manufacturers to make company boards directly accountable for safety outcomes across their supply chains, disclose accident data transparently, and sever ties with repeat-offending suppliers. It has also called on the government to strengthen enforcement, fix fragmented occupational safety and health (OSH) data systems, and align labour inspections with actual factory conditions.

Speaking to The Wire, SII CEO Sandeep Sachdeva said OEMs largely limit oversight to Tier 1 suppliers, neglecting deeper tiers. Weak disclosure under SEBI’s BRSR framework, he noted, carries heavy economic costs. With MSME productivity lagging sharply, investing in safety is no longer optional but essential for global competitiveness.

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