NEW DELHI, India (CNN) -- Thousands of workers were part of a strike in an important north Indian industrial hub Tuesday, underscoring touchy labor relations in Asia's third-largest economy.

The standoff in the district of Gurgaon, neighboring the Indian capital of New Delhi, was sparked by the death of a protesting worker of an auto-component firm on Sunday.

Police blamed the worker's death on what they called a clash between groups of striking and non-striking employees.

Trade unions accused company management and police instead.

D.L. Sachdev, secretary of the All India Trade Union Congress (AITUC), insisted Tuesday's strike had a broader agenda though.

"Workers in Gurgaon are denied the right to form a union and are victimized when they try to do so," he said.

Sachdev claimed that up to 90,000 workers -- mostly technicians and machine operators -- have joined the stir led by the AITUC, one of India's main trade unions.

Authorities, however, have declared the strike illegal.

"It is illegal in all respects. It has also been declared illegal by the labor department," said Jagdish Nagar, a deputy commissioner of police.

Nagar described the situation as "volatile".

Workers wielding sticks also indulged in stone-throwing earlier in the day.

Gurgaon, in the north Indian state of Haryana, has witnessed a phenomenal industrial growth over the past few years.

Its industry has provided employment to more than 200,000 people, according to the district Web site.

A number of automobile firms have their plants in Gurgaon.

Many IT companies like Hughes Software, Tata Consultancy Service, Alcatel, HCL, Siemens, GE Capital and Silicon Graphics also have their units located in Gurgaon.

Companies in the South Asian nation, despite its rapid economic growth in recent years, have often faced tough labor issues because of what are seen as archaic laws and company policies on hiring and retrenchment.

Last month, angry workers beat to death a human resources vice president after he laid off 42 employees at an auto parts manufacturing company in southern India.

Also, in early September, India's Jet Airways had to cancel hundreds of flights after pilots went on strike over the sacking of two of their colleagues.

Last year, the Indian head of an Italian company died after allegedly being beaten by a mob of sacked employees.

More than 60 people were charged with the murder of the chief executive of Graziano Transmissioni near New Delhi.

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