What is the “putting-out system”?

The relationship between merchants and weavers is known as the putting-out system. In this system, the merchant provides raw materials like yarn to the weavers and asks them to produce cloth according to given specifications. After the work is completed, the weavers return the finished product to the merchant and are paid for their labor. This system is widely used in the weaving industry in many parts of India. While it provides employment to weavers, it often places them in a weaker position because they depend entirely on merchants for raw materials and wages. They have little bargaining power and may receive low payments for their work.