Does Caste Matter When Doing Business in India? Socio-Legal and Economic Perspectives

Abstract

Caste-based discrimination in India is associated with human trafficking, slavery and child labour in various sectors of the economy. This paper explores the implications of caste-based discrimination for multinational corporations operating in India through sub-contractors and supply chains in the light of extra-territorial antislavery and supply chain transparency laws passed in the USA, UK, France and Australia. We find that there are some de jure effects of these extra-territorial laws in combating bonded labour and child labour in India. Besides the socio-legal case, we also explore whether there is a sound business case for global corporations to engage with enterprises owned by people from the lower castes; officially designated as scheduled castes and tribes (SC/STs). Our findings indicate that despite social disadvantage, SC/ST owned enterprises have in recent years fared well on key economic indicators and offer good business prospects for global corporations to engage with them. We discuss our findings in the context of the role of the state, trade unions and industry association of SC/STentrepreneurs.