Dharavi: One of the world's largest informal settlements
Dharavi, located in central Mumbai, India, is one of Asia's largest and most densely populated slums, home to approximately one million residents. Despite limited infrastructure, Dharavi has a vibrant informal economy with annual revenues estimated at over $1 billion. It hosts thousands of small businesses specializing in textiles, pottery, recycling plastics, leather goods, and food products, often supplying global markets. The area faces significant challenges like overcrowding, poor sanitation, inadequate water supply, and vulnerability to disease outbreaks, yet it remains economically dynamic and socially resilient, functioning as a crucial manufacturing and recycling hub within Mumbai's broader economy.
Mumbai Key Facts
• The capital city of the Indian state of Maharashtra• A population of 25 million: the largest in India, the 5th largest in the world
• India's financial capital
• Home to the Bombay Stock Exchange and major corporate headquarters
• Skyscrapers and luxury neighborhoods coexist next to densely populated slums
Dharavi Key Facts
• Spans approximately 2.1 square kilometers• Houses around one million residents
• One of the world's most densely populated settlements
• Annual economic output of Dharavi's informal industries exceeds $1 billion
• Primary sectors: leather products, textiles, pottery, recycling businesses
• Some products exported internationally
• Recycles approximately 60% of Mumbai's plastic waste
• Thus a significant contributer to Mumbai's waste management
• Severe sanitation issues: ~1 toilet per 1,000 residents, chronic health risks
History
Dharavi originated in the late 19th century as a modest fishing village established by the indigenous Koli community along Mumbai's marshy coastline. Initially, it was a cluster of huts and small dwellings where residents relied primarily on fishing and agriculture. At the time, Mumbai—then known as Bombay—was under British colonial rule, with a population of around 800,000 people, vastly different from today's sprawling megacity of over 20 million. Dharavi's strategic location near the marshes provided early inhabitants access to abundant natural resources, facilitating basic subsistence and small-scale commerce.
Throughout the early to mid-20th century, Dharavi witnessed rapid expansion, driven by Mumbai's industrial boom, especially in textile manufacturing. Migrants from rural India, drawn by employment opportunities in the city's thriving mills and factories, settled in Dharavi due to affordable housing and proximity to workplaces. As Mumbai developed into India's economic capital, Dharavi transformed from a rural outpost into a densely populated urban enclave. Today, nearly one million people live within its confines of just 2.1 square kilometers, resulting in a population density roughly ten times Mumbai's city-wide average. This remarkable demographic shift underscores Dharavi's evolution into one of the world's largest and most economically vibrant informal settlements, emblematic of Mumbai's profound contrasts and complexities.
Why Dharavi Stands Out
Dharavi's thriving informal industries echo similar patterns found in other sizable slums worldwide, yet distinct differences highlight its unique economic character. Like Kibera in Nairobi, Kenya—one of Africa's largest informal settlements with approximately 250,000 residents—Dharavi hosts numerous small businesses and workshops that provide livelihoods in the absence of formal employment. Both communities sustain robust internal economies through food stalls, garment workshops, and local trade, enabling residents to navigate economic uncertainty. Similarly, Rio de Janeiro's favelas, particularly Rocinha, home to around 100,000 residents, boast informal markets, repair services, and vibrant commerce, paralleling Dharavi's entrepreneurial dynamism.
However, notable differences set Dharavi apart. Unlike Kibera or Rocinha, Dharavi has evolved into a major global manufacturing hub, producing goods—such as leather bags, pottery, and textiles—that are exported internationally, connecting directly to global supply chains. Dharavi also uniquely manages Mumbai's waste, recycling approximately 60% of the city's plastic refuse, a service rarely matched by informal settlements elsewhere. In contrast, Mexico City's Neza-Chalco-Itza megaslum, despite housing millions, primarily caters to internal markets and local services, lacking Dharavi's global reach. These distinctions underline Dharavi's exceptional integration into both Mumbai's economy and global markets, demonstrating how informal settlements can develop distinct economic identities shaped by local contexts and global opportunities.
Residential and Industrial Areas
Within Dharavi, residential and industrial areas coexist in close proximity, creating a mosaic of vibrant but contrasting urban landscapes. Residential sections are characterized by tightly packed dwellings constructed from corrugated metal, brick, concrete, and tarpaulin, often stacked several stories high. Narrow alleyways weave through neighborhoods where homes, shared community spaces, and tiny storefronts blur into one another. Despite challenges such as limited sanitation and overcrowding—approximately one toilet for every thousand residents—the residential areas maintain a strong sense of community cohesion, cultural diversity, and social resilience.
In sharp contrast, Dharavi's industrial zones pulsate with intense economic activity, often centered around specific trades. Leather tanneries, pottery workshops, textile factories, and plastic recycling units operate in distinct clusters, each sector carving out its own space within the slum. In some areas, large pottery kilns dominate, firing thousands of clay items daily; elsewhere, narrow buildings house multi-floor textile operations producing garments for international markets. Streets in these industrial quarters are filled with workers transporting raw materials, finished goods stacked awaiting export, and workshops bustling day and night. This coexistence of residential life alongside dynamic industrial sectors highlights the remarkable internal variation within Dharavi, reflecting both its economic vitality and the daily realities of its residents.
Redevelopment Plans
Redevelopment plans for Dharavi aim to transform the densely populated informal settlement into a modern urban area by improving housing, infrastructure, and sanitation. Efforts to initiate redevelopment have been ongoing for nearly two decades, encountering various delays due to economic, political, and legal challenges.
Recently, significant progress was made, including detailed surveys to identify eligible residents and businesses for relocation and rehabilitation. Although redevelopment is actively underway, some disputes continue regarding transparency in the planning and bidding processes. Despite these hurdles, initial phases of construction have started, marking the first concrete steps toward Dharavi's transformation into a more structured and modern urban community.
Something to Think About
Imagine Dharavi's billion-dollar informal economy—textile makers, potters, recyclers—operating entirely without paperwork: no payrolls, no personnel files, no audits, just the actual work.
Now, picture if every worker, transaction, and material were meticulously documented—names, salaries, production logs, amortization schedules, audits. How would this shift affect Dharavi's economy and the lives of its residents? Consider the sheer scale of modern bureaucracy: How much of what we call “work” today involves record-keeping rather than actual production? And why?
Last updated: Spring 2025