Introduction

Globally, 160 million children aged 5 to 17 are involved in child labour, with 79 million working in dangerous conditions. Despite legislative initiatives such as the UK’s Modern Slavery Act [2015], the ongoing practice of child labour highlights the need for thorough knowledge, measurement, and monitoring of this horrific occurrence.

Global consumers, including those in the West, often seek affordable products, placing pressure on companies to cut costs in their production processes. India with its significant informal economy, has become an attractive destination for Western industries to subcontract their manufacturing. The informal economy in India constitutes a major part of the country’s economic landscape, with over 90% of the Indian workforce engaged in informal employment as self-employed or casual workers (Shirke, 2014). This unregulated workforce includes a substantial number of child labourers, making child labour a common occurrence. This lack of enforcement and adequate regulatory oversight further enables child labour practices to persist within supply chains.

In the intricate web of global supply chains, the exploitation of vulnerable populations, including children, remains a harsh reality. The world has witnessed a significant shift in its manufacturing landscapes in recent years. While the evolution promises economic growth and technological advancements in the West, its ramifications are deeply felt in the regions far beyond their borders, particularly in the less visible tiers of less developed countries like India. This blog presents insights from fieldwork examining how Western parent firms inadvertently contribute to child labour through various channels. Addressing this issue requires attention at two fundamental levels: protecting children and their childhood, and safeguarding business interests (Exigers, 2024).

Cost Efficiency and Exploitation

The drive for cost efficiency may lead foreign industries to source from suppliers in India that employ child labour to reduce labour costs and maintain competitive prices. Western parent firms may exploit these loopholes with the support of labour law experts to meet cost-effectiveness and the deadlines for their products. According to the UNICEF report on children’s rights in the garment and footwear supply chain, more than 100 million children are affected globally as workers (KIP, 2020). This creates a lucrative opportunity for multinational industries in the West to subcontract production to Indian suppliers, who in turn subcontract work to smaller, less regulated workshops or home-based units where child labour is prevalent.

Increasing Demand for Exports

From 1980 to 2023, the average annual increase in the export of goods and services was 7% (International Monetary Fund, 2024). This increasing trend has attracted foreign investors to subcontract productions to Indian contractors. The number of investors in India has increased by 27% since 1980 (IMF, 2024). To meet consumer demands and production deadlines, contractors often involve child labour from underserved communities in India.

Migration and Exploitation

The movement of child labour from low-profile districts to urban areas in India is a complex phenomenon influenced by the lack of educational opportunities, demand for cheap labour, and limited employment opportunities for adults. Children from these areas are brought into urban centres by families or traffickers to work in sectors like manufacturing, construction, and services, where they are subjected to exploitative conditions.

Field Study: Odisha

Odisha with its large tribal population, is a significant source of family migration for at least six months a year. Agriculture and forestry, being a seasonal occupation, are the primary sources of livelihood. The lack of employment opportunities compels the population to migrate to other parts of the country (Human Trafficking in Vulnerable Districts of Odisha, 2019). The prevalence of child labour in Odisha is much higher than the national average. To overcome living expenses, children of poor families are sold off to contractors or traffickers (Ramachandran, 2024), completing the cycle of demand and supply of cheap labour in the informal economy.

Picture: Family dependent on seasonal farming, they travel to other locations.

Note: Children’s photos are blurred for confidentiality reasons 

The primary phase of this action research involved interviews with 30 participants in groups to gain first-hand insights into the reasons for migration. The first conversations about  child labour in upstream supply chains started when Dr. Maryam Lotfi had a visit to India and the child rehabilitation center in the country in 2022. The primary data in the first phase of this project was collected through a discussion conducted between August’23-April’24. The data was collected on multiple occasions in Kandhmal and Nabrangpur by Mr. Varun Otari [picture 1]. These are the most disadvntaged districts of Odisha. The research team was not able to find funding for the project with applications rejected mainly because “ the project is not UK focused”, highlighting the dominant view that whatever is happening in the upstream supply chain is not the priority.

Picture: Mr. Varun Otari (field researcher and activist, in the focus group with families, Odisha)

Findings

The lack of continued long-term employment opportunities compels families to migrate. Dependent communities in Odisha rely on seasonal employment in paddy cultivation and forestry, lasting between 3 to 5 months. After this period, the options for employment are limited, often involving daily wage work on high-interest loans for small businesses, or migration to other locations. Limited employment opportunities or government initiatives force families to migrate taking their children with them.

One participant said: ‘No industry is interested in setting up even small units in our area because it is far and also this is a forest area. But they can survey areas close to us and set up their units there.’

Having employment close to their vicinity is a need for these people as migrating along with their children to new destinations means limited control over their families. Also enrolling children in  new schools at the destination is a challenge as the language is not familiar to the children and becomes a major reason for school drop out. A child out of school is at risk of child labour, trafficking, substance abuse, crime or  other forms of harm.

In India, most migration occurs within states rather than between them. Many internal migrants travel short distances for seasonal work and come from marginalized communities. This raises concerns about their social and economic exclusion, lack of political representation, and limited access to essential services like healthcare and education (Bitesize BBC, 2024). Importantly there is a pull and push factor for migration that has been ascertained. The pull migration applies to people seeking better opportunities and the push factor applies to people leaving their hometowns because of a lack of local opportunities (Working Group on Migration, 2017).

As in discussion with the participants of the groups it occurred that, there is a lot of push factor in activation to migrate families from Odisha to other parts of the country. The report of The Annual Survey of Industries, 2017-18 validates the push factor by depicting the loss of profit in industries by -76,405 Lakh in INR. Therefore, this creates a potential for the contractors and traffickers to lure the population in the more remote regions of Odisha to migrate to urban areas along with their families.

The Way Forward

To address the challenge of child labour in global supply chains, a multifaceted approach is necessary. This includes establishing certification agencies in destination countries to ensure supply chains are child labour-free and conducting training workshops for India Government employees to set up effective regulation mechanisms.

Western industries should be trained on ethical sourcing and selecting appropriate contractors in the Global South including India, while consumer awareness campaigns can educate the public about ethically produced products. Policy advocacy with the Indian Ministry of Labour and Employment is crucial for setting minimum wage regulations and ensuring decent work in the informal sector. Additionally, Western regulations and the UK Modern Slavery Act [2015] should move towards creating impact rather than a tick  box approach for first tier suppliers and giant brands.

For researchers of this article, the way forward is to carry on action research to understand the complex dynamics of child trafficking within lower-tier suppliers in India, perform a thorough assessment of the multiple core factors that drive child labour in the global supply chains to provide insights into the structural obstacles that perpetuate child labour and finally   develop evidence-based strategies to fight child labour focusing on upstream supply chains.

Authors:

Mr. Varun Otari, Child labor activist and Member of MSSS RG, Delhi, India

Dr. Maryam Lotfi, Senior Lecturer in Sustainable Supply Chain Management, Cardiff Business School, Cardiff University, UK

Bibliography

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