New York-based action group Human Rights Watch on Thursday accused the Indian Government of failing to protect the rights of hundreds of thousands of children who work as virtual slaves in the country's silk industry.

In an 85-page report entitled "Small Change: Bonded Child Labour in India's Silk Industry", it alleges the children are bound to their employers in exchange for a loan to their families. They are unable to leave while in debt and earn so little they may never be free.

The charge is based on a survey in three states that account for the bulk of the silk and sari industry - Karnataka, Uttar Pradesh and Tamil Nadu. Interviews were carried out with children, employers, government officials and members of non-governmental organisations (NGOs).

Government officials told researchers that no children were bonded or worked in factories, and that the official focus was now on raising public awareness about child labour.