A tea shop outside a garment factory seems like a simple place. But for some workers, walking through the door can carry real economic risk.

In India’s garment industry, workplace geography often reflects social hierarchies that operate far beyond formal labor policy. Who sits where, who talks to whom, and who receives the next contract can be shaped by forces that many global compliance systems never measure.

Professor Garima Sharma’s research, grounded in fieldwork across India’s garment supply chains, challenges a common assumption in global business: that if wages are fair and working hours meet legal standards, then a workplace is equitable.

How Caste Shapes Economic Opportunity in India’s Garment Industry

In Western organizational language, labor contractors are often described as “boundary spanners”—individuals who connect suppliers, workers, and manufacturers across organizational lines. The role appears structurally neutral.

But Sharma’s research shows that caste changes how that role functions in practice.

In many parts of India, physical and social spaces still reflect caste boundaries. Lower caste individuals, including Dalit contractors, cannot always occupy the same spaces as upper caste individuals without social consequences. Those dynamics influence who can build relationships, secure contracts, and maintain long-term economic stability.

“In India, space almost encodes caste,” Sharma explains. “Even today, in many places in India, lower caste individuals cannot occupy the same physical space as upper caste people.”

This is not simply a social dynamic operating outside the workplace. It directly shapes labor markets and business outcomes inside supply chains.

Why Informal Social Exclusion Creates Economic Risk for Dalit Contractors

One example from Sharma’s fieldwork illustrates how these dynamics operate in everyday business interactions.

A Dalit contractor enters a tea shop outside a garment factory where upper caste employers and workers are gathered. What appears to be an ordinary interaction can become economically consequential. Employers may risk losing social standing if seen publicly interacting with a Dalit contractor, while upper caste workers may refuse to work with them altogether.

The exclusion is not formalized through company policy or employment contracts. Instead, it operates through informal social norms: who shares a table, who joins a conversation, and who gains access to relationship-building spaces where business decisions are often made.

“They're actually almost like risking their livelihood,” Sharma notes, “because employers might lose their face if they're seen interacting with a Dalit contractor.”

How Spatial Exclusion Reinforces Economic Inequality in Supply Chains

Sharma’s research identifies a self-reinforcing cycle operating beneath formal employment structures.

• Exclusion from physical and social spaces limits access to contracts, networks, and economic opportunity
• Economic precarity then makes it harder to access those same spaces in the future
• Over time, these patterns compound, widening inequality even when formal workplace policies remain unchanged

“This exclusion from physical spaces reinforces economic precarity, and the economic precarity kind of also makes it hard to have access to these spaces,” Sharma explains. “So it's almost a self-reinforcing cycle.”

Meanwhile, upper caste contractors often benefit from stronger informal networks, financial flexibility, and shared social identity that convert the same formal role into fundamentally different economic outcomes.

What Global Supply Chain Audits Often Fail to Measure

This research carries significant implications for multinational companies operating across global supply chains, particularly in industries such as apparel, manufacturing, and agriculture where contractor systems shape production.

A factory may pass compliance audits related to wages, hours, and safety conditions while still reproducing forms of inequality that remain invisible to traditional measurement systems.

The issue is not necessarily what companies measure. It is what existing frameworks assume does not need measuring.

Traditional audits focus on formal indicators:
• Pay records
• Safety equipment
• Working hours
• Legal compliance

But Sharma’s research suggests that some of the most consequential barriers to equity are informal, relational, and spatial—embedded in social norms and access dynamics that standardized compliance systems rarely capture.

What Business Leaders Should Understand About Inequality in Global Supply Chains

Sharma’s research points to several broader implications for organizations operating internationally.

First, context fundamentally shapes how organizational systems operate. Many management theories and diversity frameworks were developed using Western institutional assumptions and may not fully account for deeply embedded social structures in other regions.

Second, formal equality does not necessarily produce equitable outcomes. Two individuals with the same job title, skills, and official access to opportunity may still experience dramatically different economic realities when informal systems determine who gains trust, visibility, and access.

Third, organizations may need more contextual and ethnographic approaches to understanding inequality inside supply chains. Surveys, audits, and quantitative metrics can miss relational dynamics that shape day-to-day economic participation.

How Research on Caste and Labor Challenges Assumptions About Workplace Equity

Sharma’s research does not frame inequality as the result of isolated individual decisions. Instead, it examines how systems reproduce unequal outcomes through ordinary organizational practices and social structures.

For business leaders, the central question is not whether invisible barriers exist within supply chains. They almost certainly do.

The more difficult question is whether existing measurement systems are designed to identify those barriers—or unintentionally structured to overlook them.