Slave labour was also used in the mines and by the guilds. The Arthashastra states that a man could be a slave either by birth, by voluntarily selling himself, by being captured in war, or as a result of a judicial punishment. Slavery was a recognized institution and the legal relationship between master and slave was clearly defined e.g. if a female slave bore her master a son, not only was she legally free but the child was entitled to legal status of the master's son.

Megasthenes may have been confused by the caste status cutting across the economic stratification. Technically, there was no large scale slavery for production. Greek society made a sharp distinction between the freeman and the slave, which distinction was not apparent in Indian society.

A slave in India could buy back his freedom or be voluntarily released by his master : and, if he was an Aryan, he could return to his Aryan status, a system which did not prevail in Greece.