A Report on Debt Bondage, Carpet-Making, and Child Slavery

By Swathi Mehta, Tufts University


In Disposable People: New Slavery in the Global Economy, Dr. Kevin Bales estimates that there are at least 27 million slaves in the world today – more than at any other time in human history. Slavery is on the rise around the world for the simple reason that unpaid, forced labor constitutes an excellent (though brutal) means to economic profit. For callous businessmen, slaves are disposable people who toil to meet the global market’s demand for goods. The lower a good’s production costs, the more competitive it will be on the global market.

Ironically, India, the world’s largest democracy, is also home to more slaves than all the other countries of the world combined.1 With roughly one billion inhabitants, India supports over 15% of the world’s population.2 And with more than half of India’s population living below the income poverty line3, nearly 40% of the population cannot afford a sufficient diet.4 As inadequate government expenditure on education, health, and welfare increases the high vulnerability of much of India’s vast population, exploitation – even enslavement – are everyday realities for many Indians.

Due in part to tremendous pressure to participate in the global market, India’s industries readily make use of cheap, even forced, labor. Because a developing country like India lacks the resources to modernize yet enjoys a large potential workforce, slave labor often becomes the preferred method for keeping costs low and profits high. And though India has many employment codes – outlawing child labor, exploitation of children, and bonded labor (a form of involuntary servitude) – slavery, especially that of children, persists unabated.

Offering one window into the massive problem of slavery in India, this report examines the most prevalent form of slavery in India – known as debt bondage – using the Indian carpet-making industry as a case study. Included are descriptions of the carpet-making industry, working conditions, and personal stories, with a focus on child slavery. And while the report’s first half discusses the dynamics of modern-day slavery, the second half necessarily focuses on modern-day abolitionist responses. An overview of anti-slavery campaigns by various international and Indian non-governmental organizations, then, leads into a discussion of what you can do in America to help end child slavery in India.

Indeed, if this report has a larger message, it is that globalization is a double-edged sword. While spawning new scenarios of exploitation, globalization also creates new avenues for American activists to fight slavery around the world right here at home.

Human Collateral: The Institution of Debt Bondage

The most prevalent form of modern day slavery, known as debt bondage or bonded labor, occurs when a person becomes a security against a debt or small loan. In India, these loans range from $14 to $214, and are usually incurred for basic necessities like food, emergency needs (e.g. medical treatment), marriage dowry (a long-standing tradition), or funeral expenses.5 With exorbitant interest rates of up to 60%, these loans are difficult, if not impossible, to repay. Individuals thus become trapped within a system of debt bondage that forces them to repay loans by working unconditionally for their entire lives – even passing on the same debt for generations. Human rights groups estimate that 15 to 20 million slaves are represented by bonded labor in India, Pakistan, Bangladesh, and Nepal alone.6

Debt bondage and other types of slavery are prevalent in both export-oriented and domestic industries. Both adults and children are enslaved, though the frequency of child slavery is much higher, as children are easier to exploit. Nevertheless, it is often difficult to differentiate between illegal child labor and child slavery. All of the industries that use child slaves also use illegal child labor (with the possible exception of child prostitution).

India has some 44 million workers under the age of 13, with 300,000 in the carpet-making industry alone. These numbers also include child slaves.7 By conservative estimates, there are thought to be at least 5 million children in bonded labor in India alone.8 Debt bondage, as the most common form of modern-day slavery, is used to exploit people in India – especially children – in all sorts of work, including:

  • agriculture
  • prostitution (which stretches as far back as the time of the devadasi, the temple dancer)
  • clothing and textile manufacturing
  • silk production (learn about the silk industry and the role of the World Bank)
  • the leather industry
  • match-making
  • glass blowing
  • gemstone polishing
  • salt production
  • cigarette (bidi) rolling (Source: Tobacco Slaves in India, 60 Minutes II, November 23, 1999)
  • soccer ball stitching (Source: Life, June 1996)
  • the fireworks industry (especially in preparation for Diwali, the festival of lights preceding the Hindu New Year)
  • the hand-knotted carpet-making industry.

This report considers the last of these categories as a case study, with the dynamics of slavery in carpet looms standing as a general model for how various forms of bondage impact a range of Indian industries.

Legal Codes vs. Social Reality

While slavery is illegal in all countries of the world, many obstacles hinder the application of law to daily practice. India has numerous laws regarding slavery, debt bondage, and particularly child labor. Child debt servitude has been illegal in India since 1933.9 Child labor – a lesser form of exploitation, though often difficult to differentiate from child slavery – is even outlawed in the Indian Constitution: “No child below the age of 14 years shall be employed to work in any factory or mine or engaged in any other hazardous employment.” Childhood and youth are protected against exploitation and against moral and material abandonment.10 Another Indian law, directed specifically at debt bondage, is the Bonded Labour System (Abolition) Act of 1976, which strictly outlaws all forms of debt bondage and forced labor.11

So why are so many millions trapped in debt bondage in India? While a complex question, one key factor is that government neglect has led to a lack of adequate education, welfare, and health services. For instance, while India’s constitution mandates state responsibility for free, compulsory education up to the age of 14, India still produces two million illiterates each year.12 To be sure, illiteracy, endemic poverty, industrial fragmentation, rural underdevelopment, customs, vested interests, the importance of India’s export trade, and the attitudes of both government and industry are all factors behind the persistence of modern-day slavery.13 And tragically, rehabilitation programs for bonded workers often fail due to corruption and bureaucratic indifference.

Effects of Child Slavery in the Carpet Industry

Slavery cannot be dismissed as an isolated problem in remote villages; it is a global issue, which profoundly yet quietly affects our daily lives. Many goods produced with slave labor are exported directly to North America and Europe, and consumers often purchase these slave-made products while unaware of their tainted origins. In addition, although production of certain consumer goods may not explicitly use slave labor, they may still use slave-made components. As an example, Kevin Bales cites slave-produced charcoal that is essential to making steel in Brazil. Much of this steel then becomes car parts and other metal goods that make up a quarter of all of Brazil’s exports.14

Among the more prominent slave-made goods from India are oriental carpets. In recent years, the carpet export industry has become one of India’s largest – and is believed to “employ” more child slaves than any other industry. Between April of 1995 and March of 1996, Indian carpet exports earned $656 million, with the largest portion ($225 million) coming directly from the United States.15 In 1998, the majority of US carpet imports originated in India, with income for India amounting to approximately $282 million.16 Indeed, the carpet industry proves to be extremely valuable for the Indian economy, earning large amounts of foreign exchange and providing further entry into the global market.

For loom owners, children are accessible, easily exploited, and very cheap (if not free). According to Anti-Slavery International and the Bonded Liberation Front, India’s hand-knotted carpet-making industry accounts for roughly 300,000 child slaves.17 Slavery is also rampant in the carpet industries of several neighboring countries. Pakistan has at least 300,000 child slaves working on its looms, and Nepal has anywhere from 100,000 to 200,000 child slaves making carpets. In fact, within these three countries alone, there are likely to be at least one million children producing two-thirds of the world’s supply of carpets.18


The decline in demand for Iranian carpets over the last 20 to 30 years has spurred the remarkable growth of the Indian carpet export industry. In the early 1970s, the Shah of Iran outlawed child labor, causing the price of Iranian carpets to rise steeply.19 With Western buyers seeking cheaper alternatives, the Indian economy quickly recognized a “golden” opportunity. Though Mogul (or Mughul) princes had brought the art of carpet-making to India in the 16th and 17th centuries, the quality of carpets deteriorated over the centuries due in part to a scarcity of wool.20 But now, with Iran’s former customers searching for new sources, Indian entrepreneurs were encouraged to increase capacity to meet international demand.

Soon fierce competition on the global market arose from countries such as Pakistan, Nepal, Turkey, and even China (its machine-made carpets could be sold at extremely low prices). Indian manufacturers and exporters were pressured to keep prices down. Plant modernization and mechanization were not options as it was expensive and loom owners lacked the resources. Also, because carpets had to be hand-knotted, reducing labor costs was seen as the only option for keeping carpet prices low. As a result, exploitative child labor was extended, including numerous cases of debt bondage.21

Today, the carpet industry in India is mainly concentrated in the northeastern state of Uttar Pradesh, which shares its border with Nepal. The “carpet belt located in Uttar Pradesh is centered around the cities of Mirzapur, Varanasi, and Bhadohi. There are an estimated 70,000 looms in Uttar Pradesh. 95% of these operations are not registered under the Factory Act or the Shops and Establishment Act because they are comprised of one man who owns only two looms run by a crew of no more than a few young boys.22 In addition, many of these looms are located in small villages or in remote areas making them difficult to monitor.

Trapping Children

The extreme poverty of the harijans or untouchables (the lowest group in the traditional caste system) and the adivasis (the tribals or indigenous people) make them the most vulnerable groups for exploitation. 80% to 90% of all bonded laborers in India are harijans and adivasis. The absolute levels of poverty and the lack of social welfare, education, or alternatives make it very easy for the loom owners to exploit these groups. Within these groups, children are probably the most exploited. One justification for child labor in the carpet industry is the predominant “myth of nimble fingers, which claims that the small fingers of children are more productive than those of adults. (Nevertheless, the quality carpets that can be sold at the highest prices are often those made by adults.)

The most common way for children to become slaves is through a system of debt bondage in which they become a security against a family loan (as described above). Most of these children are illiterate and thus unable to keep track of their debt and their salary, which they seldom even receive. Also, debts only increase with the costs of owner-provided food, shelter, and clothing (all of which are inadequate) being added onto the capital sum and interest.

Some children become bonded laborers because they are given to the loom owners on the false promise of an education or good wages (to be sent back home to help the family). Click here for the Ram Cousins’ story. Others are simply sold to loom owners because their families cannot afford to feed them. Even more children are simply kidnapped and sold into slavery. Click here for Santosh’s story. In each case, children are enslaved and typically live at the looms where they work. As Anti-Slavery International reports, “The roots [of bonded labor] run deep into history. It was born out of a melange of class, caste, and power and is maintained by commercial, political and bureaucratic vested interests, corruption, psychological as well as physical dominance, and by that most nebulous of all oppressors, custom.23

Working Conditions

For child slaves, the injustice of having their childhood and livelihood stolen from them by loom owners is compounded by horrific working conditions. Looms are usually one or two to a small village hut, which is little more than 12 feet by 9 feet with mud walls. The huts are poorly lit, with tiny windows heavily barred against thieves and a thick pane of glass or polythene in the roof as the main light source.24 Children must work for 12 to 18 hours a day, seven days a week, without breaks. Owners allow them to sleep for very few hours and often chain them to their looms.

In such terrible conditions, children suffer from deteriorated eyesight; lung disease and tuberculosis from inhaling the wool particles; other communicable illnesses such as fever, stomach problems, and typhoid; chronic kidney and liver problems; deformation of the back and limbs; and malnutrition (many children are underweight, of a smaller height in proportion to their age, and have dental problems).

Children are also beaten and tortured. Loom masters will often beat them with a bamboo staff or other heavy objects if they work too slowly, make a weaving mistake, or cry for their parents. Some children are branded with hot irons. If they cut their fingers (which happens very often on the sharp cutting tools) the loom masters are known to shave match heads into the cut and set the sulfur on fire so that blood will not stain the carpet. Sometimes slaves are hung upside down from trees and poked with cigarettes. Others are killed for attempting to escape.

Many of these children have been working since the age of four or five. By the time they reach adulthood, they may be chronically ill or irrevocably deformed. They will simply be replaced and displaced once they have passed the age of productivity and efficiency – i.e., profitability. Most are likely to be dead by the age of 50 even if they are fortunate enough to survive their enslavement.25

Action on the Ground

The greatest strides against child slavery in India have been made by the South Asian Coalition on Child Servitude (SACCS), an active coalition of more than 200 non-governmental organization working on child rights issues in various industries based in India, Pakistan, Nepal, Bangladesh, and Sri Lanka. Kailash Satyarthi, chairperson of SACCS, began his work in 1980 liberating bonded laborers in India.

In a 1994 interview, Satyarthi stated that: “[In 1980] there was no awareness of the problem. A law had been enacted banning child labor, but received no more than a four or five line article in the newspaper. Our first tactic was to conduct raids on factories, sometimes freeing entire families from bonded labor. This exposed the situation in the media. We soon realized that the most vulnerable of these laborers were child laborers. We also discovered that the situation of bonded laborers was not restricted to India, but also existed in Pakistan, Nepal, Bangladesh, and Sri Lanka. So in 1987 and 1988, we launched campaigns throughout South Asia.”26

SACCS serves as a pan-India movement against the exploitation of children in all the countries of the sub-continent, with a special focus on freeing children in the carpet-making industry. By 1996, SACCS was responsible for freeing more than 34,000 children by conducting raids on carpet-making looms.

Another popular method of freeing slaves is through buyback programs, like those run by World Vision and UNICEF. World Vision’s Restoration Childhood project raises funds to pay slaveholders a fee for the release of each child. In the Fall of 1999, World Vision reported that it had paid an average of $38 per child for the release of eight boys and five girls, ranging from 10 to 15 years old.27 These children from Gudiatham, southeast India, had been working as bonded laborers to make cigarettes and matchboxes for so-called cottage industries. The parents of these children are to gradually repay World Vision’s contribution to a community loan fund established to help prevent families from selling their children into bondage. World Vision has released 300 bonded child laborers in India.

UNICEF also helps buy children out of bondage through its support of the Child Labour Abolition Support Scheme (CLASS). In 1996, UNICEF cited a program in which the district collector (administrative chief) in North Arcot bought children out of bondage with the help of CLASS. A UNICEF report states that: “The immediate objective of the project was to develop income-producing alternatives so that mothers could buy their children out of bondage and send them to school. Release fees were negotiated for working children, and their mothers joined self-help groups to raise money. The groups earned income by rearing dairy cows and selling their milk. Mothers qualified for a group buy-out loan and matching grant from the state of Tamil Nadu if they worked for the group and promised to keep their children in school once they were released.28

Buybacks programs, however, are not the solution to ending debt bondage. It would be impossible to pay off the debts of hundreds of thousands of child slaves. But these programs do bring hope to bonded individuals and their families while encouraging local communities to fight for a change in the existing system. Benefits of these programs include education, development, and reform. Nevertheless, the need for a larger solution remains.

One group, which has taken a different approach to freeing child slaves while working to break the cycle of enslavement, is the International Justice Mission. A Christian ministry led by human rights professionals, the group works on behalf of those who cannot rely on local authorities for relief from oppression. The International Justice Mission’s work in India focuses on bonded child labor in the cigarette (bidi) rolling industry, as well as forced prostitution. Director of Investigation, Bob Mosier, points to the fact that the group utilizes existing laws such as the 1976 Bonded Labour (Abolition) Act to free children (as opposed to buying their freedom). By presenting the case of specific bonded children to local Indian authorities, the International Justice Mission is able to obtain court issued papers that guarantee the children’s freedom. In this manner, the International Justice Mission has successfully freed over 200 children from India’s bidi industry. When asked what prevents money lenders from simply exploiting other children as bonded laborers, Mosier said that local authorities also arrest and penalize the money lenders in hopes of breaking the cycle of debt bondage.

Action in America

The children freed by the International Justice Mission serve as slaves to an industry producing goods bound for America: the sweetened bidi cigarettes. As a result, a significant dividend of the IMJ’s work is that it exposes how slavery in India actually affects Americans.

Such international connections have proved extremely important in making Americans pay attention to contemporary slavery in India. A case in point: On November 23, 1999, CBS’ 60 Minutes II broadcast a report on an IMJ emancipation mission in Tamil Nadu that began: “There was a time that some of the tobacco products sold in America were made by slaves. On the eve of the 21st century, this is still true. 60 Minutes II Correspondent Scott Pelley reports from India on child slaves who make cigarettes for America.

By invoking an American touchstone, IMJ’s work then paved the way for an effective American response. Indeed, when 60 Minutes approached the US Customs Service with their footage from India, officials stated that the visuals provided sufficient evidence to ban imports of Mangalore Ganesh cigarettes. IMJ thus not only succeeded in interesting the American media in a human rights abuse occurring in remote Indian villages, but also spurred action by American regulatory agencies.

A Child Shall Lead: Iqbal Masih

Another important means of attracting American attention to child slavery is through remarkable personal stories. Indeed, the most effective spokesperson for child slaves in the carpet industry has been 12 year-old Iqbal Masih. At the age of four, Masih became one of thousands of Pakistani children sold into bondage (a situation parallel to that in India). For a loan of 600 rupees (just $12) Masih was sold to a carpet factory owner to pay for his older brother’s wedding. He was forced to work for over 12 hours a day being beaten, verbally abused, and chained to his loom.29 Masih worked in bondage until the age of ten, when he was freed with the help of the Bonded Labor Liberation Front (BLLF) in Pakistan – only to become the president of its youth wing.

In 1994, Masih received international recognition for his work, including the Reebok Human Rights Youth in Action Award. While visiting the US, he was granted a full scholarship to Brandeis University and awarded $10,000 for education by Reebok. While in Boston, Masih visited the Broad Meadows Middle School in Quincy, Massachusetts and told the students about his six years of forced labor in the Pakistani carpet-making industry. Masih’s visit prompted the school’s 325 students to write over 600 letters – addressed to the Pakistani Prime Minister, Massachusetts Senators John Kerry and Edward Kennedy, and 60 local carpet stores.30

One year later, on March 16, 1995, Masih was murdered. He had gone to celebrate Easter with his family in Muridke, Pakistan and was shot while riding on his bicycle with two of his relatives. According to the Bonded Labor Liberation Front, his death was a conspiracy by the carpet mafia. Following Iqbal’s murder, the Broad Meadows students took their campaign to a new level, undertaking a major fund-raising drive to build a school in Muridke, Masih’s village in Pakistan. This had been Masih’s dream: education overcoming oppression.31

Certification, Legislation, and Judicial Action

Non-governmental organizations have also lead many efforts to end child labor, debt bondage, and slavery in the world. In February 1993, the RugMark Campaign was initiated by a consortium of European and Asian rights groups including: the Indo-German Export Promotion Council, representatives of the carpet industry, 200 non-governmental organizations under the South Asian Coalition on Child Servitude, and UNICEF-India. The campaign works to license exporters and manufacturers, affix the “RugMark (a label certifying carpets made without child labor), and conduct inspections of carpet-making sites.

The Campaign operates on the hope that consumer pressure will affect improvement and enforcement of government policies toward forced child labor and slavery. And the local thrust is that American consumers should not purchase oriental carpets without checking for the RugMark label. A simple action in the US can have an international impact.

Due to increased trade liberalization, however, the campaign could face obstacles such as the General Agreement on Tariffs and Trade (GATT) and regulations of the World Trade Organization (WTO) if it were to attempt to influence government policies regarding import and export regulation or selectivity. The Child Labor Deterrence Act, proposed in 1994 by Senator Tom Harkin to prevent products made with child labor from entering the United States, faces a similar problem. As the General Agreement on Tariffs and Trade (GATT) currently stands under the World Trade Organization (WTO), it is illegal to regulate products based on the working conditions under which they were produced. The sole exception is made for laws discriminating against imports made with prison labor.32 A country that attempts to ban the import of a specific product could face economically devastating sanctions by the WTO and its member countries.

In some instances, however, the US government does take a stand, with significant results. In conjunction with a coalition of advocacy groups, Congressman Joe Kennedy helped launch the “Foul Ball” campaign to end the use of child labor in the manufacture of hand-stitched soccer balls. “80% of the world’s soccer balls are produced in a very small region in Pakistan where millions of balls are made by children under the age of 14,” noted Kennedy in 1995. “All companies who make or import soccer balls into the U.S. should certify that the balls are not made by children.33 The campaign successfully halted the import of these goods, seriously hurting Pakistani manufacturers.

An innovative strategy to fight slavery in India with legal action against slave masters is currently being developed by the American Anti-Slavery Group. Class-action legal codes in America allow for suits against companies dealing in slave-labor goods. While these laws have been invoked to seek compensation for slave labor in the past (most notably targeting Nazi-era labor by concentration camp inmates), they are equally applicable in the present. Look for more on this campaign in the coming months.


  1. Kevin Bales, Disposable People: New Slavery in the Global Economy (Berkeley: University of California Press, 1999) 196.
  2. Bureau of South Asian Affairs, U.S. Department of State, Background Notes on the Countries of the World: Republic of India (Sept. 1998) online, LEXIS-NEXIS, 13 Oct. 1999.
  3. United Nations Development Programme (UNDP), Human Development Report 1998 (New York: UNDP, 1998) 147.
  4. The World Factbook 1997: India online, LEXIS-NEXIS, 13 Oct. 1999.
  5. Arvind Ganesan and Lee Tucker, “The small hands of slavery: India’s bonded child laborers and the World Bank,” Multinational Monitor (Jan.-Feb. 1997, v18 n1-2 p17) online, INFOTRAC, 13 Oct. 1999.
  6. Bales, 9.
  7. Pradeep S. Mehta, “Cashing in on child labor,” Multinational Monitor (April 1994, v15 n4 p24) online, INFOTRAC, 13 Oct. 1999.
  8. Edward A Gargan, “Of Human Bondage: India Tolerates Slave Labor as Usual”, International Herald Tribune (5 June 1992).
  9. Ganesan.
  10. “India: child labour some staggering statistics,” WIN News (Summer 1995, v21 n3 p65) online, INFOTRAC, 13 Oct. 1999.
  11. Ganeson.
  12. Mehta. [According to U.S. political scientist Myron Weiner]
  13. Anti-Slavery Society, A Pattern of Slavery: India’s Carpet Boys (London: London Manhattan Ltd., 1988) 45.
  14. Bales, 23.
  15. The Economist Intelligence Unit (EIU), Country Report 1999: India (London: Economist Intelligence Unit, 1999) 50.
  16. “1998 U.S. Carpet, Rug Imports Rise Over 1997, HFN (13 Sept. 1999, v73 n36 p16) online, LEXIS-NEXIS, 13 Oct. 1999.
  17. Charles Jacobs, “Slavery Worldwide Evil, The World &I (April 1996, p110-119) 110.
  18. The tragedy of child labor: An interview with Kailash Satyarthi, Multinational Monitor (Oct 1994, v15 n10 p24) online, INFOTRAC, 13 Oct. 1999. [These numbers do not include children in countries such as Turkey, China, Morocco, Afghanistan, and Iran.]
  19. Anti-Slavery Society, 11.
  20. For more information on the Mughal empire, refer to Modern South Asia: History, Culture, Political Economy by Sugata Bose and Ayesha Jalal – Chapter 4 “The Mughal Empire: State, Economy, and Society.
  21. Anti-Slavery Society, 37-38.
  22. Anti-Slavery Society, 20.
  23. Anti-Slavery Society, 4.
  24. Anti-Slavery Society, 20.
  25. Ganesan.
  26. “The tragedy of child labor: An interview with Kailash Satyarthi.
  27. World Vision, Today, Autumn 1999, page 12.
  28. UNICEF, 1996 Annual Report, page 60.
  29. Bonded Labor Liberation Front, biography of Iqbal Masih.
  30. Christina Nifong, “Making Human Rights Come Alive, The Christian Science Monitor (13 Dec. 1994) 12.
  31. Jordana Hart, “Students seek fitting memorial for Pakistani, 12, The Boston Globe.
  32. “The tragedy of child labor: An interview with Kailash Satyarthi.
  33. Press Release from Congressman Joe Kennedy’s office, 25 June 1996.

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