Unfortunately, India has the largest number of child labourers in the world. The census revealed an increase in the number of child labourers from 11.28 million in 1991 to 12.59 million in 2001. The MV Foundation in Andhra Pradesh found nearly 400 000 children, mostly girls aged between 7 and 14 years, during 14-16 hours a day in the production of cottonseed across the country of which 90% are employed in Andhra Pradesh. 40% of the workforce in a gem cutting business is children. NGOs have discovered the use of child labourers in the mining industry in Bellary District of Karnataka despite a severe ban on the same. In urban areas, the employment of children in industry of zari and embroidery is high .
Poverty and lack of social security are the main causes of child labour. The widening gap between rich and poor, privatization of basic services and neoliberal economic policies mean that large segments of the population are without jobs and basic needs. This affects children more than any other group. The entry of multinational companies into the industry without proper mechanisms to hold them accountable has led to the use of child labour. The lack of quality universal education has also contributed to children dropping out of school and entering the labour market. A major concern is that the actual number of child labourers is not detected. Laws that aim to protect children from unsafe work are ineffective and are not enforced properly.
A growing phenomenon is the use of children as domestic servants in urban areas. The conditions under which children work are completely unregulated and they are often forced to work without food, and at very low wages, resembling slavery. There are cases of physical, sexual and emotional abuse of child domestic workers. The argument for domestic work is often that families have placed their children in these homes for care and employment. Recently , the Ministry of Labour reported that child domestic work and child labour in dhabas , tea stalls and restaurants were "dangerous" activities.
Forced child labour is a hidden phenomenon, as the majority of them are in the informal sector. Forced labour means the employment of a person against a loan or a debt or social obligation on the part of the family of the child or the family as a whole. It is a form of slavery. Children who are related to their families or inherit a debt from their parents often find themselves in the agricultural sector or assist their families in brick factories and stone quarries. The individual promise of children is an increasingly common phenomenon that usually leads to child trafficking to urban areas to find employment and to have children work in small production houses compared to factories. Servile workers in India are mostly migrant workers, which opens them up for more exploitation. In addition, they come mainly from low caste groups such as Dalits or marginalized tribal groups. Children in bonded labour face a very high risk of physical and sexual abuse and neglect that can sometimes lead to death. They are often psychologically and mentally disturbed and have not learned a lot of social skills or survival skills.
In 2000, the ILO estimated that 5.5 million children had been forced to work in Asia, while the Liberation Front of Liberated Workers placed 10 million children in India. In 1998, the Government of India rated child labour as a marginal problem with only about 3,000 cases. An investigation in Tamil Nadu in 1995 found that 125,000 child labourers were alone in the state.