Caste, credit, and social capital: Constraints on Dalit entrepreneurship in India’s leather industry

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Dalit participation in India’s leather industry reflects a paradox: a long historical presence alongside persistent economic marginalisation. Drawing on fieldwork with 60 Dalit entrepreneurs in Kanpur, Ludhiana, and Pune (2018–19), this paper examines how caste-structured market processes shape their position within the leather value chain and constrain opportunities for accumulation. The findings show that most Dalit entrepreneurs remain concentrated in low-value production activities as dependent job workers or survival-oriented micro-producers. Their operations are shaped by unequal access to credit, exclusion from high-value trading networks, and interlocked production arrangements. Informal financial instruments such as the parchi system, while facilitating transactions, often operate as mechanisms of value extraction due to liquidity constraints and unequal bargaining power. Access to formal finance remains limited and delayed, reinforcing dependence on costly informal credit. Social networks, though dense, offer limited access to resource-rich market linkages. As a result, entrepreneurship functions less as a pathway to mobility and more as a mechanism that reproduces existing hierarchies. Only a small minority are able to move upward through episodic access to capital and networks. The paper argues that markets in caste-segmented industries are not neutral but structured by institutional inequalities that shape who accumulates and who does not. It highlights the need for policy interventions that address liquidity constraints, network exclusion, and value-chain positioning rather than relying solely on generic entrepreneurship promotion.