How Globalised Production Exploits Informal-Sector Workers: Investigating the Indian Garment Sector

Development Viewpoint

Asia

The rise of Neoliberalism in the 1980s dramatically transformed the industrial practices of many developing countries, signalling the shift towards export-oriented industrialisation. Since then, the spread of globalised production has gone hand-in-hand with intensified exploitation of a decentralized, flexible and cheap labour force (Mezzadri 2008). Flexibility has been obtained through the incorporation of the informal economy into transnational production networks. This Development Viewpoint draws on research on such trends in the Indian garment industry, focusing on workers employed in Delhi, one of the country’s leading export centres. In the 1960s, the Indian garment industry was virtually non-existent even though the country had had a long tradition of skilled tailoring. By the end of the 1970s, however, India’s garment exports grew due to a combination of factors: the assignment of quotas to countries by the Multi-Fibre Agreement (MFA), rising labour costs in East Asian competitors, and an increased global demand for textile products. Workers in the Sector India’s readymade garment exports increased significantly as a share of the country’s total exports (see table). Garment workers, who numbered 45,000 in the 1970s, more than doubled to reach 101,000 by 2004. Even at the end of the MFA in 2005, production was still highly informalised. The combination of subcontracting and the utilisation of a poor migratory labour force have given the industry a great deal of labour flexibility—a cherished Neoliberal goal. Poor migrant workers are preferred because they pose little risk of unionisation. Generally, they come from rural backgrounds and are first-generation industrial workers. They are recruited and organised by tekhedaars, or labour contractors, and not directly by the exporters. These workers generally do not settle in Delhi but migrate back to their home states each year after a production cycle. Household Labour While male migrants predominate in garment factories, the workforce employed in household labour for the industry is more diversified. Embroidery provides a good example of such work. Much of it is done by hand and can often constitute half of the unit cost of a garment.

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Mezzadri Alessandra