Child labour is widespread in home-based manufacturing activities in the informal sector in most developing countries. However, very little is known of child labour in industrial outwork. The aim of this paper is twofold: on the one hand, to understand whether children in home-based work households are more likely to work than other children and, if so, how this impacts their capabilities; and, on the other, to outline policy implications for India. This paper draws on ad hoc surveys and a country study carried out in India. It examines the incidence of child work in such households, the child