Dharavi to Davos: Informal Circularity
- George Thomas
- Oct 11
- 5 min read
Introduction: Another Picture of Dharavi
When you hear “Dharavi,” you imagine nonstop movement, crowded streets, open sewers, and eight people living in a room that serves as a dining, cooking, storage space, and most probably their work area. Another perspective on Dharavi highlights it as a living organism growing on the trash of urban Mumbai. The informal sector recycles 80% of Mumbai’s solid waste, nearly 19,870 tons daily. Well-developed Singapore can recycle only about 19.5% of its plastic waste. In contrast, one of the world’s largest slums recycles around 60% of Mumbai’s plastic waste. This circularity is not driven by policies or government schemes but sheer necessity. And this is not only about Dharavi or India; 61% of the global workforce is engaged in the informal economy.
That’s why bridging the gap between Dharavi and Davos is important. The world must acknowledge the existence of the informal economy and incorporate it into policies suitable for both the Global South and the Global North.
How Dharavi Works
Currently, global organisations often follow a top-down approach, where technologies and policies are designed in developed countries, often without consideration for the realities faced by the rest of the world. By contrast, the informal economy functions bottom-up, starting from ragpickers and ending in neighbourhood-level recycling facilities across India.
This bottom-up structure is surprisingly organised. It incorporates an estimated 250,000 ragpickers across Mumbai who work up to 11 hours daily. They collect waste from across Mumbai city and hand it to buyers. The collected waste is transported to micro-units, often by foot or on local trains, into Dharavi. In the narrow streets, sorting and preparation for the following stages occur. Workers segregate waste into plastics, paper, cardboard, metals, and e-waste — often without proper safety gear. Plastic is divided into categories by colour and density, a skill honed by years of experience. It is cut into smaller pieces, washed, and sun-dried on rooftops and open roads, using every available resource. These shredded plastics are then ready to be transported to recycling facilities.
Materials that cannot be recycled are repaired and reused. Oil cans are cleaned and resold to producers. Old wooden doors, steel scraps, plastic trays, and asbestos sheets are repurposed as secondary building materials. Buildings in Dharavi are constructed through incremental design; homes expand as families’ finances, needs, and materials allow. It is something the West can learn from. This informal economy generates an estimated $1 billion annually, all within just 2.39 square kilometres, housing about one million residents, making it nearly 40 times denser than New York City.
This showcases a side of Dharavi rarely acknowledged: a cultural melting pot of people from across India, with many languages and religions coexisting, interacting, and surviving in a unique environment. Dharavi offers lessons for global policymakers, including those gathered in Davos.
Social and living conditions
Dharavi is a recycling engine. True, but at what cost? Hygienic living and working conditions are scarce. Workers are exposed to toxic chemicals from recycling and fumes from pottery furnaces. Residents face higher risks of lung cancer and tuberculosis. Open sewage systems, one toilet for 1,440–1,500 people, and overcrowding add up to severe public health challenges. Life expectancy in Dharavi is estimated to be about seven years lower than in other parts of India.
Those working in waste management also face social and economic challenges. Waste pickers are stigmatised and treated as less than full members of society. They lack legal contracts, adequate health care, and proper housing. Government support is minimal, mainly because their work is not officially recognised. This is not happening just in Dharavi; cities like Ciro, Nairobi, Karachi are just one among many. Even if you take a closer look, people on the streets in a Country like Germany return plastic and beer bottles to the supermarket for up to 25 cents per piece. This shows Dharavi is not a unique case but a representative of many across continents.
Pathways for Integration
Formalising this sector could help workers rise from these conditions. It would improve the working environment, provide safety equipment, and improve social acceptance. The example of SWaCH, a waste-picker cooperative in Pune, has uplifted thousands of workers by formalising collection and working directly with municipal authorities. However, a purely top-down approach risks worsening conditions or displacing the very people who sustain this system today.
How to formalise effectively?
1. Direct collaboration & formal recognition. The informal economy must be formally recognised and integrated with municipal authorities and recycling facilities.
Existing community actions should be built upon, not replaced. The goal must be a multi- stakeholder environment of ragpickers, local businesses, and government.
2. Economic fairness & incentives. Workers must receive fair pay. Policies such as Extended Producer Responsibility (EPR) can create incentives for collectors and put pressure on product design to favour reuse and recycling.
3. Social support & skills. Improve working conditions with safety gear, better sorting infrastructure, skill development, and career pathways so workers can move up into management or entrepreneurship within the circular economy.
Lessons for Policy and Design
Bridging the informal and formal economies is essential, but it must be done cautiously. Dharavi is a vast interconnected ecosystem involving millions of people. Recognition of the informal economy must be raised globally. This can happen through urban development and slum-studies programs in international universities, as well as through courses like “Urban Food-Energy Nexus” at the Technical University of Munich, which builds awareness in the minds of the West.
Dharavi also offers lessons in design and resource management. The live/work model maximises scarce real estate. Incremental building techniques demonstrate informal financial planning, construction based on available resources, and adaptive innovative practices that policymakers in the Global South should understand and preserve.
Challenges Ahead
Formalising the informal economy is a tremendous task. Reliable data on Dharavi’s economy and workers is scarce. Deep field research is needed. Because the informal economy is driven by necessity, introducing rigid systems requires experimentation, innovation, and sensitivity. Much of the Global South already practices circularity informally. What is needed is not a wholesale import of Western models, but betterment and support of existing systems.
From Dharavi to Davos
I am confident solutions exist to integrate a formal circular economy in Dharavi because it is a necessity for the people living there. With adequate funding, research, and collaboration across local, national, and international levels, it is possible. Imagine Dharavi hosting the 2050 World Economic Forum on its rooftops, with the world humbled by circular practices the West preaches but rarely lives. Innovation in urban planning and human resource management born out of Dharavi could become a landmark achievement for India and for the whole world.
