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Outline of a History of Labour in Traditional Small-scale Industry in India

Tirthankar Roy

At 1800, India had a significant presence in the world as a manufacturing country. Possibly about 15-20 per cent of its working population, or 15-20 million persons were employed in industry at that time. All of it was small-scale artisanal industry, and the great majority of the production units were family-labour oriented or 'households'.       

The nineteenth century brought  about different conditions. Trade with industrializing Europe destroyed a great deal of artisan livelihood in India. At the same  time, the 'globalization' of the Indian economy through trade, investment and colonial rule initiated a limited growth of mechanized factory-based industries in India. These were usually industries that used abundant natural resources intensively. Examples  are cotton textiles, jute textiles, sugar, paper, iron and steel, etc.. The latter type of enterprise has been called 'large-scale industry'. All other forms of enterprise can be termed 'small-scale industry'.       

How   did the nature of industrial work change between  1850  and  1950? Mainstream  labour history in India has been concerned almost exclusively with labour in large-scale industry and more  or less ignored labour in small-scale industry. Implicitly, there has been  a  belief that large-scale industry is what defines 'industrialization', whereas small-scale industry ceased to matter in industrialization. The  former was expanding  in income  and employment, whereas  the latter was in decline in competition with large-scale industry. As a result of such beliefs, anyone reading mainstream labour history is likely to form an exaggerated view of the change in industrial labour in colonial India.

Recent works on small-scale industry have called for a more balanced reading. These works have pointed out that small-scale industry survived on a very large scale, and that segments within it modernized in the colonial period. Labour in modernizing small-scale industry must have changed more gradually and in different ways than did mill labour. This perspective raises the following question. How do we conceptualize 'work'  and 'workers' in modernizing small-scale industry? The present essay is mainly an attempt to answer this question.    

The essay has three parts. Part 1 (The Context) sets out the background, with a review of the state of labour history scholarship, the macroeconomic context, and with an attempt to develop a realistic typology of industry from labour history point of view. The  typology makes a distinction between 'traditional' and 'modern' small-scale industry. This essay will be exclusively concerned with the former category, because only on this category is there sufficient research to build upon.¹ Part 2 reports what we know  and can plausibly speculate about employment conditions in traditional small-scale industry in the long run. Part 3 offers some  broad hypotheses  on traditional small-scale industry in the post-independence period by using the survey of the preceding section. The 'conclusion' suggest some areas of research and issues in comparative history.

 Part 1. The Context

 1.1  Typology: Large-scale and Small-scale Industry  

Standard histories of Indian industrialization deal mainly with a type of firms described as 'modern industry' or 'large-scale industry'. Large-scale industry can be defined by three basic characteristics, relating to technology, organization, and government  regulation. First, large-scale industry used machinery and steam-powered technology. It was the relatively more capital-intensive sector in manufacturing. Second, it was organized in large factories sometimes employing several thousand persons, rather than in small factories or in 'households'. Households are defined as units where members of the owner's family were the main workers. Third, these large factories satisfied the official definition of a 'factory'. This definition has changed over time. Today  it applies to any unit employing 10 or more workers and using electricity or 20 or more workers and  not using electricity. Once such a unit is registered officially as a 'factory', it becomes subject to government regulations under the Factories Act concerning the wages and welfare of the workers. A unit officially registered as factory can sometimes  escape implementing  these regulations. But overall, the Factories Act has quite strongly influenced employer-employee contracts inside large factories in India.

By contrast with large-scale industry, in numerous industrial firms in India neither machinery, nor large factory, nor government regulation played significant roles. These formed  the relatively more labour-intensive component in manufacturing. We call this sector 'small-scale industry'.

Industry types can be distinguished further based on a fourth characteristics, vintage. Large-scale industry was a  new  type of enterprise. It was a product of the Industrial Revolution. Machinery, even the technicians, needed to run the mills were for a long time imported from Britain. The technological-organizational paradigm followed that existing in mid-nineteenth century Britain. The biggest business partner was Britain. Except in the cotton mills, the owners were mainly British.

For the majority of the small-scale industry firms, on the other hand, the products and technologies dated before the colonial period. An example is handloom weaving of  cloth. This set can be  called 'traditional' small-scale industry. There were, however, a few small-scale firms that were modern in origin. Compared to large-scale industry, these were units of smaller scale and usually unregulated. And compared to traditional small-scale industry, these were usually of recent vintage, used machinery to a greater extent, and had higher average scale. We can call this type 'modern small-scale industry'. In the interwar period, a significant growth of modern small-scale industry took place. Examples are foundries, cotton gins, jute presses, edible oil extraction, rice mills, flour mills, etc. Table 1 summarizes the main characteristics of the three types of industry.

The term 'modern'  can be misread and needs to be qualified. The dividing line between  traditional and modern small-scale industry was not a very sharp one. Most types of modern  small-scale industry supplied old products. Thus, grain milled by machinery and that milled by hand both supplied the same consumers, but by different technologies. Sometimes, however, new technology led to a new product altogether. For example, machine-milled rice was often seen as a distinct product from hand-pounded  rice, and in some cases these involved different grains. In many cases, money  made  in a traditional small-scale industry tended to be invested in starting firms that were bigger in scale, technologically more developed, and more capitalized. These would  satisfy the definition of 'modern small-scale industry', even though the modern  and the traditional in this case were two stages of a continuous process of evolution or adaptation. The example of handloom weavers who set up small factories equipped with power-driven looms is perhaps the most appropriate.

The  dividing line between small-scale and large-scale was sharper. But they too had close relationships. Large-scale industry supplied raw materials to small-scale. Workers  often  moved   between  them. And   small-scale industry workers and entrepreneurs sometimes learnt their skills and acquired new ideas by working in large-scale industry. The former could even buy secondhand machinery  from  the latter. Textiles supply examples of all three situations.

Table 1. Different Types of Industry Defined

In terms of conditions of labour, there was a great deal of continuity over time within traditional small-scale industry. Change did come. I shall argue later that a labour market came into being. But the change was a slow one and mediated for a long time by traditional institutions. By comparison, there was a sharper break when agricultural or artisanal populations entered large-scale industry. In modern small-scale industry too there was a sharper break, but we can say very little about it.

1.2  The intellectual context

History of industrial labour in India has dealt overwhelmingly with large-scale industry or mill labour. It has seen work and workers in the mills as representative of a transition from traditional to modem occupations and culture. It was an uneasy and incomplete transition in most views, but the core problem for labour historians nevertheless. Within this tradition, concerns have shifted over time, from the mechanisms by which an industrial labour force was formed, to the constitution of 'working class' culture.²

Mainstream labour history in India has more or less completely ignored small-scale industry. The oversight is curious. For, the great majority of manufacturing workers remained, and continues to remain, employed in forms of enterprise that fall outside 'large-scale industry'. At 1930, as little as 5 per cent of industrial employment were  located in mechanized and formal factory units, a small subset of which has engaged  almost all of labour history scholarship. The rest were employed in such occupations as handloom  textiles, leather, pottery, metal-working, jewellery, wood­work, etc.. Most of these were traditional and small-scale. In 1991, the percentage of formal factory workers was less than 30 and in steady decline since 1971. The rest of industry was probably not dominated by  traditional small-scale industry any more. But a significant part of it had originated from latter roots. The labour historians' preoccupation  with mill  labour has clearly no  relation with  the quantitative importance of such labour in India. The sources are in fact ideological.

One source of this preoccupation is the analytical categories and framework used in conceptualizing industrial labour. The language of Indian labour history is rooted in the Marxist concept of the 'working class'. By definition, the 'working class' is cut off from traditional industry and employment practices, or the debris of 'precapitalist relationships'. Indian labour history of recent vintage is primarily engaged with measuring  the 'classness' of the working class. Labour in traditional small-scale industry cannot be analytically handled by this scholarship and, therefore, is forgotten by it.

A second likely source of this oversight is a widely held belief that large-scale industry effectively supplanted traditional small-scale industry in the colonial period, that these two were  basically competing oppositions, and the former was clearly winning the competition. In labour history this view has remained implicit. In the old nationalist interpretation of colonial India the view was more explicitly stated. In recent industrial history, which has been strongly influenced both by nationalist thought and by Karl Marx's writings on India, the idea revived. Marx was generally dismissive of traditional small-scale industry, even more so in the context of colonial countries.

In this view, economic contact between India and Europe produced three changes. First, it destroyed traditional small-scale industry. Second, it created large-scale industry in its place. And third, the new enterprise did not compensate for the loss of the  old so that  a net retardation or 'de-industrialization' resulted from trade, investment, and colonial rule. Such a view of Indian industrialization has been so influential in the 1970s and the 1980s that it merits being called the 'orthodoxy'. The main evidence in support of the orthodoxy came from two sets of facts. The first is an old  and misinterpreted example  of decline in the traditional textile industry in competition with mills in Lancashire and later those of Bombay. And the second is a decline in total industrial employment during the censuses of the colonial period (1871-1931). We  shall re-examine this evidence later on.

Elements of this orthodoxy have been in dispute from time to time. But in recent works in the 1990s on industrialization in South Asia, it has not only been questioned again, but also questioned in a manner that an alternative paradigm can take shape.³

In this alternative view, wit h some exceptions (some branches of textile industry for example), traditional small-scale industry did not compete with large-scale industry. As a result, vast numbers of such workers and occupations could continue. But they did not continue in a changeless fashion. The main source of change was commercialization. Most  types  of traditional small-scale industry experienced increased long-distance trade from the middle of the nineteenth century. There was decline in production for subsistence, in production under various types of non-market distribution arrangements, and in production for local, rural or periodic markets. Markets  integrated due to the railways and to  standardization in consumption. Commercialization  increased competition within traditional small-scale industries. That, in turn, led to increased specialization and division of labour. Less efficient and non-specialized forms of enterprise, such as the households, declined in favour of specialized wage-labourers. The decline in census employment reflected this internal competition.

This alternative paradigm can be called a Smithian-Hicksian view as opposed to the Marxist view that has ruled Indian labour history for a long time. The analytical tradition associated with  Adam   Smith  and   John   Hicks  tends  to  stress commercialization as the key to economic growth. The tradition associated with Marx tends to see machinery as the centrepiece of economic growth. The former view is capable of explaining a decline in manufacturing employment, and yet it does not see traditional small-scale industry as such as declining.

How does a paradigm shift in industrialization change the writing of labour history? How do we redefine 'work' and 'workers' in manufacturing in the new context? Needless to say, the new view encourages seeing in industrial labour more a continuity than a violent break. But what remained the same? And what changed? In Part 2, these questions will be addressed. Before we come to that it is necessary to form an idea of the quantitative extent of large-scale and small-scale industry.

 1.3 Employment  statistics

The relevant employment statistics are presented in Table 2. By studying these figures, we can come to a few reasonably firm conclusions on industrial labour.

In the colonial period, industrial employment was stagnant in absolute terms. It may  even have declined by comparison with the nineteenth century. The exact size of the labour force can be disputed, but this conclusion is unlikely to change. There was stagnation also in industrial employment in relative terms. That is, industry's share of total employment hardly changed. This inertia or stagnation derived entirely from trends in  employment  within  small-scale industry. If we measure  'large-scale industry' by employment in officially registered factories, and 'small-scale industry' by employment  located outside such factories, then the scale of the latter fell quite substantially between 1881, 1911 and 1931.

In 45 years after the end of colonial rule in 1947, industrial employment increased in absolute terms. But the implicit growth rates were not very high. Between 1961 and 1991, the growth rate was a little over 1 per cent per year, substantially below the rate at which supply of labour (population growth multiplied by participation rates) expanded. Not surprisingly, the stagnation in industrial employment in relative terms continued in independent India.

For independent India, however, it is quite clear from census data that the low rate of growth in employment did not signify an overall decline, but a decline in certain segments. This pattern reflected an organizational change that improved labour productivity. Family-labour oriented units were declining rapidly, and small wage-based  units expanding even more rapidly. What appears as an overall inertia, was actually a process of growth in wage labour and specialization.

We do not have the means to test directly whether or not such an organizational change had already been going on in the interwar period. But we do have several sets of data that suggest that indeed it had started long before 1947. First, women's participation in industry declined steadily. Women were and are overwhelmingly concentrated in household industry. Therefore, this decline in participation reflects the decline of the households. Second, real income in 'small-scale industry' increased significantly between 1901 and 1947⁴ even as employment declined, which suggests that the decline affected specifically low-productivity workers. These were likely to be households. Third, there are reliable data from major types of traditional and small-scale industry - chiefly leather, handloom textiles in cotton and silk, carpets, and a few others - which suggest that the scale of production increased in the first half of the twentieth century with stagnant or even declining capacity indices. Once again, we can postulate a shift from low-productivity units to higher-productivity ones.

To sum up, during the colonial period, employment was shrinking in some segments  of manufacturing, whereas employment was rising in other segments. In the most  widely held interpretation, 'small-scale industry' as a whole was in decline in competition with large-scale industry. This is disputable. It is more likely that small-scale industry as a whole was a dynamic  sector. But certain segments and certain forms of industrial organization within it were in decline. The trend derived to a lesser extent from competition with large-scale industry, and to a larger extent from growth of markets and competition within small-scale industry itself. Part 2 on labour begins by elaborating this point about internal commercialization.

 Table 2. Employment in Industry

Notes: The extent of large-scale industry is measured by employment in officially registered under the Factories Act. Any unit employing 10 or more workers and using power  should be registered, but in fact, very few units with around 10 workers actually register. Units usually registered have a much higher average work-force. 'Small-scale industry' means all units not under the Factories Act. 'Family-labour oriented' units are called 'Household Industry' in the census. 'Wage-labour oriented' units are the residual, consisting of small factories and workshops.

 Source: India, Census of India, various years; India, Statistical Abstracts for British India, various years; India, Statistical Abstract, various years.

Part 2. Work and Workers in Traditional small-scale industry in Colonial India  

2.1 Commercialization

The sixty years between the opening of the Suez Canal (1869) and the Great Depression (1929) saw an almost continuous growth of external and internal trade. A national market emerged  in a  number  of basic goods and  services that were imperfectly if at all traded before. Labour became steadily more mobile. The basic infrastructure needed to hold a market-economy together was more or less completed in these sixty years. Large-scale industry was a product of these changes. Traditional small-scale industry was also transformed by these changes. There was increasing integration of the market for its products. There was a shift away from production for own  use, or use as gifts and tributes, to production for market, especially non-local market; shift from local to long-distance trade; and changes in consumer and producer behaviour induced by the possibility of long-distance trade.

As markets integrated, competition within the crafts intensified and eventually weaker  manufacturing  traditions decayed. The weaker traditions were represented universally by the rural artisan. This was the context in which household labour was extensively employed. This was also the context in which the male artisan was very often a part-time agricultural labour himself. Broadly speaking, rural industry had the following core set of attributes: (a) production for subsistence (of for the producing household, community,  or village), (b) primarily barter, grain-based exchange, at best production for a  small local market, (c) peasantry-dominated social relations of production, and (d) narrow or non-diversified markets and skills. Examples were leather processing, coarse weaving, utility metals, etc. Commercialization could upset this network by altering the structure of costs as well as tastes. For example, competition drove out the non-specialized rural artisan who almost always produced a poorer quality good  even if at a lower price than in the cities. Expanded cash transactions drove many artisans out of barter and forced them to migrate. Persistence of restrictive social relations in the villages had a similar effect, when much improved communications and a less hierarchical society in the towns increased the costs of staying on in the village.

The cities and rural clusters that had artisan settlements and that emerged as main  points of trade, were well-placed to receive craftsmen, diversify occupations, utilize old skills in new ways, and also compete more fiercely between themselves. The advantages of these places were manifold. They were often production centres for major inputs such as cotton yam. They were invariably the centres of trade in both raw material and finished goods. Thus, they had merchants who knew these trades better than the artisans. Being less hierarchical places they often provided artisans themselves with the opportunity to become traders.

This agglomeration tendency further increased specialization via a restructuring of the production unit. Women  migrated  less frequently than men. Therefore, the household as a production unit was much less common  with migrant workers. For a number  of reasons, factories or closely supervised putting out systems expanded. Finally, as specialization and division of labour progressed, new quality-improving or cost-reducing innovations could be tried. Almost always, these innovations did not replace labour outright, but made labour more productive. Before coming to the impact that markets had on labour, some  specific industry experiences are cited below to illustrate how commercialization could change institutions.

The most  important example of outright market-creation is leather, especially tanned hides and skins. This product became a major tradeable in the late nineteenth century. The capital and expertise accumulated in this trade was the foundation for a diversified leather industry to build up later, now one of South Asia's leading exports. This was originally a rural craft. It was performed by quasi-serfs under conditions of extreme inequality. In most places hides were subject to barter. Even where a market formally existed, servitude arose both from caste-hierarchy and the interlocking of markets. That is, it arose from the fact that the main customer of the leather artisan was also the peasant-employer. An export market from the 1870s, and the need for different kind of processing weakened this serfdom. The market enabled massive migrations into the city, the rise of the merchant-owned factories and rise of wage labour.

The case  of handloom  weaving is more  well-known. Here, the vulnerable segment consisted of artisans who had the following features. They were engaged in cotton cloth as opposed to silk, in coarser and plainer type of weaving as opposed to skilled decorative weaving, were mainly rural and included a large number of artisan-cum-labourers or members of agrarian labour castes who wove on the side. Two types of weaver were  forced to look for alternatives. The first included those engaged in coarse-medium  cloths and facing  competition from the powerloom   in increasing intensity. The second included those engaged in rural coarse weaving who stayed poor and vulnerable because of their dependence on local markets. There was exit from both spheres. But the former class tended to look for alternative options within weaving. They  migrated to new  urban textile production and trade centres and restarted as weavers. The latter tended to leave weaving when alternatives, usually casual labour of various kinds, became available. In contrast with both, the silk weaver never faced competition from machinery in a serious way, but was affected by other factors shaping the textile market, clubbed under 'commercialization'.

In handloom  cloth, especially silk, long-distance trade was far from a new invention. But trade almost certainly increased in extent in the colonial period because of and through four processes. First, mass-produced and mass-consumed cloth from England  and the Indian mills created large-scale marketing networks of recent origin. Second, introduction of imported inputs had a similar effect on trade network. Third, there was concentration of weaving at points of internal trade, the railways and spinning mills. And fourth, there was universal decline of spot sale in favour of contractual sale, a  process contemporaries called increasing 'dependence' of the weaver  on  the merchant. How  greatly the work-site changed as a result depended on the extent or nature of relocation of the industry. In a group of towns in western India that became both points of trade and major destinations of handloom weavers from depressed and less competitive regions, the industry was reorganized in factories. In semi-rural weaving, and in other regions, the household proved much more stable.

A  range of industries intensive in craftsmanship - carpets, shawls, engraved metals or silks - were always urban and always commercial. In the colonial period the extent of urban concentration increased and there was a qualitative change in markets. In many   examples of precolonial markets, these products went to consumers with relatively little intervention from merchants. These consumers represented local power or custom. For example, carpets or engraved metals made in the towns of the Western gangetic plains were sold to the local rulers; or silks in Peshwa towns were governed by royal patents. This pattern of consumption changed in favour of exports or long­distance trade within India. In these crafts, the greater part of production and exchange in the mid-twentieth century happened in large agglomerations of artisan community and trade, and were subject to many layers of merchants. In other words, the twentieth century craft town was a place where bargaining, freedom of entry and exit, anonymity of transactors, were greater that before. The markets were both more complex and more competitive. In the highly skilled crafts, the old production units survived to a great extent because  they served the essential functions of preservation of skills and restriction of skills. The institutional changes experienced here were more subtle and slow-acting.

2.2 Work  and Workers

How  were work  and workers affected by commercialization? Words that have a known   meaning  in the context of large-scale industry - 'work', 'wage-labour', 'factory', or 'labour market' - reappear in the context of traditional small-scale industry, but in a changed meaning. This is because commercialization of work lagged behind  commercialization of products. In other words,  in employment conditions tradition persisted longer, even if in an adapted form.

The most strikingly 'new' type of work-site was the factory. In the interwar period, factories were usual form of work-site in the industries describe above. In major handloom  towns and destination of migrant labour - Sholapur being the most important example  - factories predominated. In carpet-weaving in northern India, factories were the usual system. In leather, again, wage-labour was performed inside large tanyards. But such factories could be different from a large mill in essential aspects. Generally, there were two broad types of factory in traditional small-scale industry. The first employed wage-labour, and only wage-labour. The second was a site owned  by  the merchants of the product, where putting-out contracts were executed by several groups of intermediaries who brought their own workers. The second was quite a different thing from a modern factory.

Except where factory in the former sense prevailed, and where large-scale migration had created a pool of workers available for hire, there was no explicit 'labour market' in existence. The former sphere had grown in the colonial period. But in many industries, it was a relatively small segment.

The general case was that of recruitment of labour into a small firm without full-fledged hiring. This happened in broadly two ways. Firms using mainly family labour employed workers from within the family, or sometimes hired surplus family labour of neighbourhood firms. And masters hired apprentices. The family firm and the master-apprenticeship system were the two general pre-factory types of unit that survived  the  colonial period  and  participated in  long-distance trade and industrialization.

In both cases, children were employed. But as long as they were employed within the family, within the master-apprenticeship system, or within localized limited hiring of non-family labour by families, children worked without the existence of an explicit market for the services of child labour. Increasingly in the post-1947 period, a market  for the services of children grew up. Today, the traditional contexts of employment  of children has disappeared, and children are recruited on wages from an available pool of hirable, often migrant, child labour. The same broad trend can be seen in the case of the adult male labourer as well, and probably for adult females.

 2.2.1 Factory

The forces that led to the significant growth of factories in certain industries were the following. In some cases - such as Sholapur cotton handloom or tanning generally - large-scale rural-urban and interregional migration broke up household or communal   systems of production, and created concentrated pools of hired labour. In general, wherever migration was subdued, wage-labour was slow to grow, and grew in a more subdued way in the form of families hiring assistants. The examples are, Tamil Nadu handloom  weaving, carpet weaving in Eastern UP⁵, etc. A second reason was the employers' or merchants' need to supervise production especially where the product was intensive in craftsmanship. This was one reason why carpet weaving came into the factories in Western UP. Thirdly, there was a more conventional way the factory begun, when a craft partially mechanized. Textile processing is one example. In Surat town, processes connected with gold thread manufacture represent another example.

 2.2.la The Handloom factory: Symbol of artisan accumulation: 

In both tanning and carpets, the factories were established by the merchants. In handloom weaving, they were mainly established by persons of weaving community.

Sholapur, the premier textile town of the Bombay-Deccan, represented the highest all-round development of handloom production in the twentieth century. It became  a mill town and a major cotton trading town in the decades after the railways connected it with Bombay. From the 1890s, Sholapur began to receive a large number of migrant weavers from Telengana. Some of them entered the mills. But many settled down  as handloom weavers. In the interwar period, the town probably had 7-8000 looms located in small factories owned mainly by the Telugu-speaking Padmasali weavers. These weavers dominated capital as well as labour.⁶ By 1930, there was a mixture of small family firms with 3-8 looms and a few hired workers and large factories with 20-40  looms worked mainly  by hired workers. The second type dominated. By then, loomless migrant weavers staying in dormitories and available for hire had become a large and visible group in the town. Increasingly in the interwar period, weavers came with their families. The women and children often found work in the winding-warping-sizing mill attached to a factory or catering to several of them. These factories employed relatively faster techniques of processing than those used inside households. Many of these families retained their ties with the places of origin through frequent homeward journeys. But the frequency of these trips came down over time. The existence of a large wage-labour group had also invited attempts to organize them into unions. At the end of the interwar period, the Handloom Workers' Union had been formed and managed to enforce two relatively minor provisions of the Factories Act, regarding hours of work and  weekly  holiday. The 1940s saw  the first strikes in the industry. But after independence the impetus to form unions weakened on its own.

 2.2.1b Tanning: The role of migration and hierarchy: 

The rise of the factory and wage-labour happened  in tanning the most extensively, in the backdrop of large-scale migration of tanners from the countryside to the hides and skins trading towns. The migration was most visible in the case of North or Central Indian Chamars who entered labour in Kanpur, Agra and Calcutta. In South India, on the other hand, there was extensive entry of local agrarian labour castes into tanning factory labour.

The number of large tanneries in India rose from 13 in 1901 to 66 in 1939, and labourers working in them doubled. Of 1921 census employment in leather, factories employed  5 per cent in United Provinces, and 4 per cent of tanning workers in Madras. But  these figures are an underestimate because the 'factories' here refer only to concerns officially registered as such. A provincial survey of unregistered factories was carried out during the Royal Commission on Labour, 1931.⁷ The survey showed that, in Madras, 776 small tanneries employed close to 10,000 workers, whereas large tanneries employed  4,000. According to the 1931 census, the small and large factories engaged about a quarter of the workers in tanning in this province. It is fair to assume that the proportions were similar in India as a whole, and rising steadily. While tanning was usually a male occupation, in some factories of Bombay, women and children were employed  sorting wool.

The word  'factory' could include a wide range in sizes and types. A 1940 report on Punjab described a hierarchy of tanning units in the province.⁸ The description seems to be applicable to most parts of India.

At the smallest scale was the 'village tannery'. This was still mainly an artisan-owned  unit. It worked with family and neighbourhood labour, used local cattle, but was contract-bound to the hide merchant from the small town. At the middle was the 'town tannery', factories with 5-10 hired workers each. The owners took part in both contractual and spot markets. A fair number of them were of artisan background. But the majority was hide traders, usually Muslim. At the top of the scale were the 'big factories' employing 100 or more workers each. There was some European capital in these ventures. But the main source was the larger of the Muslim merchant firms. The first type could be found scattered in rural North India. The second occurred in small towns, but usually those with slaughter-houses and large spot markets or auctions (mandi) in hides. The third was a feature of major ports and industrial towns such as Calcutta and Bombay. The  labour recruitment practices in the largest tanneries were probably similar to that in the mills. But this history is yet to be written.

In general wages of the least skilled worker inside a tannery were not very different from the wages of an agricultural labourer. In that sense, the tanning workers' low opportunity costs helped the owners of factories. On the other hand, the tanning worker benefited from a freer social environment and steadier work. There is evidence to suggest that economic mobility was faster and more likely inside a tannery than in agriculture. About 1900, the wages of the ordinary 'cooly' was about Rs. 4 a month. The unskilled labourers could easily command a wage of Rs. 5 to Rs. 8, and the skilled Rs. 10 to Rs. 30. Either of them could live comfortably on Rs. 5 a month.⁹

 Custom  did not completely vanish, but often persisted in the tannery in the form of direct or indirect hierarchy. Hierarchy could permit not only low wages but also poor working conditions inside the factory. Further, the distance between the workers and the managers was apparently quite sharp inside a tannery, and remained so for a long time. Inside factories in Madras, for example, the main body of manual workers was drawn from the agrarian labour castes, chiefly the Paraiyans. The white collar jobs, on the other hand, were sometimes performed by people who owned land. In such cases, the interactions between the 'tannery men' and the 'factory men' reproduced, in a much  milder way, the hierarchy in the villages that both had left behind.¹⁰

 2.2.1c Carpet: Interplay of export-merchants, master-artisans, and their apprentices: 

Major  urban centres of carpet weaving in India in the interwar period - Amritsar, Srinagar, and Agra  most notably - saw the establishment of large factories with sometimes  as many as 300 looms each. Most of these were owned by foreign carpet trading firms. Some  of them had  operations in Persia and Turkey, which  were destroyed during the First World War, possibly with the effect that their India trade grew  and the Indian factories became more visible. There were several reasons why the factory suited the carpet industry. Certain operations, chiefly dyeing, needed new investment and systems of quality control. For delicate or expensive work, weavers were  not always trusted enough to be left unsupervised. But most importantly, carpet weaving  in these towns belonged in an Indo-Islamic craft tradition that used master-apprentice  systems  most  extensively  and  rarely used  female   workers.  A predominantly  male and team-work-based  production unit was much  more  easily assembled in a factory than families.

The carpet example is rich in details about contractual terms in the urban skilled crafts of northern India, and for this reason it merits a detailed look.

The employment contract in the factory was not a wage-contract. It involved three parties and not two: the owner, a master, and workers. Typically, the owner contracted on piece-rate with the intermediary, also called ustad or karigar. The latter created his team. The team consisted of both grown up and trained men, and young apprentices called shagirds or disciples. The first group sometimes appears as partners of the ustad, sometimes as his employees. The second  group was  almost always engaged on time-rates. For the tasks they did were wide-ranging and ill-defined. In the large factory, the ustad was an intermediary. In smaller factories, the ustad and the owner (called karkhanadar) often became indistinct. The karkhanadar was technically one who owned  the factory. But in practice he was an owner with artisanal background. The large factory was no factory in the modern sense. It was the shed where a putting-out contract was implemented. The 'employer' received the benefit of putting out, terminable contracts as a strategy towards risk. The employer avoided one disadvantage of a factory, having to communicate with and monitor the direct producer. The shed ensured that the work progressed under  their eyes. All these features suited the European factor very well.       

The  artisans, on the other hand, found the factory consistent with an old tradition. Until the mid-nineteenth century, carpets were made in these towns in factories or karkhanas owned by courtiers and rich men of the town. These factories employed a class of skilled masters known as ustads, literally maestros, and 'karkahnadars'. In the twentieth century, the weaver-intermediary symbolized two elements, of which one was old and one new. The old element was his function as a repository of skills, one of the main senses of the term 'ustad'. In this sense, the work-contract explicitly accommodated learning. Workers were supervised by a  super-worker who  taught them the craft and had their trust and respect. When the master moved  from one  factory to another, he took a whole team with him. On the other hand, the ustad was a contractor under the merchant or karkhanadar. When he worked under a European factor, the ustad was a product of foreign trade.

Three types of custom