Are Indian companies exploiting their workers?

The charge against Indian companies goes something like this: workers are paid poverty wages, given no job security, and left with no recourse when they are let go. For the delivery riders and factory workers who keep the economy running, the prosperity of India’s growth story has never arrived. It is a serious charge. But it conflates two different things: low wages, and exploitation. And as someone who spent years working as an unpaid intern, I can confidently tell you that they are not the same.

Let’s start with workers in the formal economy — those employed in factories and manufacturing, covered by state-set minimum wage laws. Now minimum wages sound like a protection for workers but in practice, it prices many of them out of formal employment. A small business owner who can afford to pay ₹350 a day will not take on a formal employee if the law requires ₹500 — not because they want to exploit workers, but because the numbers do not work. So, they hire informally and the business becomes termed informal. The problem this creates is that manufacturing firms that work within informal ecosystems, never get direct access to global markets. Because global brands don’t want to risk their reputation by working with companies that are not compliant with local laws. So these companies and by extension workers, never get access to global standards – keeping their productivity and wages locked. Hence minimum wage that were theoretically designed to protect workers, end up hurting them. 

But let us ask the deeper question. Is low pay exploitation? The answer depends on what exploitation means. If it means being forced to work under conditions you would not choose given a real alternative, then the test is not the wage. It is the agency. No one is compelled to take a factory job or deliver food on a platform. They took it because, given their alternatives, it was the best available option. That is a life, not exploitation.

Consider investment bankers. They work sixteen-hour days, sacrifice weekends, and operate under relentless pressure. We do not call this exploitation — because we assume they are compensated sufficiently. But “sufficiently” is not an objective standard. It is a market outcome. An investment banker earns more because the skills they bring are harder to replicate and demand for them is high. A factory worker earns less because their skills are easier to replicate. As workers improve their skills — or as India’s economy grows and demand for labour outpaces supply — wages rise. This is not a hope. It is what has happened, across the board, as India has grown.

Gig work — delivery riders, cab drivers, platform workers — is often held up as the modern face of exploitation. What one might call long hours, no fixed income, no benefits. Is looked at by those entering because for them it translated into no boss, no micromanagement and unlimited earning potential. Everyone in the gig economy is choosing to do this over an alternative available to them. When millions of people independently make the same choice, that is not exploitation. That is a market finding a solution to unmet demands.

So, if you are reading this and are frustrated with low wages in India, the answer is not to call the employers criminals. It is to grow the economy fast enough that demand for labour rises. A better alternative is what gives workers real bargaining power — not a law.