Taking a historical perspective this paper explores the phasing out of ‘bonded’ labour in agriculture and its reappearance in the village-based powerloom industry in the Tiruppur region of Tamil Nadu, India. Focussing on a village outside Tiruppur, we trace the gradual transformation, and ultimate disappearance of forms of labour bondage in agriculture. In this region bondedness in agriculture changed in a number of significant ways, before giving way by about the 1970s to primarily casual and contract-based labour arrangements. Around the same time, small-scale powerloom workshops, which are highly labour intensive and increasingly dependent on migrant labour, began to mushroom in the village, leading to the reintroduction of bonded labour, but this time in the context of rural industrial employment. We explore how debt bondage was introduced and how it affects the working lives of both migrants and non-migrants. The paper examines the differences and similarities between past agricultural and current industrial labour bondage, and how it is experienced and talked about by both employers and workers.