Although Indians had been among the first slaves that had been brought to the Cape in the second half of the seventeenth century, it was only after the 1860s that southern Africa had a relatively large Indian population. In Natal of the nineteenth century the white economy was based on the production of sugar. This is a labour intensive form of agriculture. Hence there was a great demand for labour for the sugar plantations. In order to satisfy the labour needs of the plantation owners, the Natal Legislative Council passed Law 14 of 1857, which provided for the importation of indentured Indian labourers for the sugar plantations. The period of indenture was to last for five years. Upon completion of this term of indenture, the labourers had the choice of renewing the indenture for a further five years, sell their labour on the open market in Natal or return to India. After a 10-year stay the Indians were offered a free return passage to India. More than half of the indentured labourers remained in Natal, some because they had been recruited from the impoverished south of India and saw no opportunity of re-establishing themselves there. Yet again others were forced into second and third terms of indenture by a discriminatory system of taxation in Natal. Law 17 of 1895 provided that an annual tax of £3 had to be paid by Indians who were no longer indentured. Ex-indentured workers could have the tax waived if they re-entered another term of indenture. Failure to comply with this piece of legislation could entail perpetual indenture to white plantation owners, a term in prison or deportation to India.

Not all Indians remained in Natal. A large number moved to the Zuid Afrikaansche Republiek (ZAR), later known as the Transvaal, to work on the reconstruction of the railway line. However, regardless of where Indians resided in southern Africa, they were exposed to legislation that discriminated specifically against them. This included economic discrimination in terms of trading licences, restrictions with regard to freedom of movement, being exposed to urban residential segregation by being forced to live in so-called "bazaars", being exposed to restrictive immigration legislation and non-Christian marriages of Indians not being recognised. The last piece of discrimination had far-reaching consequences for Indian family life, as it effectively forbade Indian males from having their wives and children with them, or joining them in any of the provinces. Additionally, restrictions were placed upon domiciled Indians, who were not allowed to bring their wives or minor children to South Africa.


Not all Indians came to Natal as indentured labourers. A large number of Indian traders came to Natal at their own expense. They were referred to as "passengers". The majority came from the Gujarati region of India. The Indians therefore did not constitute a homogenous group. Whereas most of the indentured labourers came from impoverished Hindi areas, the "passenger" Indians were mainly Muslims from a higher-class background. In terms of policy and legislation all Indians were treated with equal disregard by the legislatures in southern Africa.


Like African and coloured South Africans, both indentured and "passenger" Indians were exposed to harsh and oppressive conditions, with their only value being perceived in the labour they had to sell on the white market or the contribution of Indian businessmen to boosting the economy. Unlike the former, however, the situation of Indians in South Africa received some international attention that was related to the importance of the country India for the British Empire. India intervened directly in attempts at securing less exploitative working conditions for indentured Indians in Natal. In 1871, after some Indians had returned to their motherland and had recounted tales of widespread maltreatment, which included flogging by plantation owners, the Governor-General of India suspended emigration to the sugar fields. A commission was set up in Natal to draw up recommendations for the improvement of working conditions. Only when these were implemented did India resume emigration of labourers. The next shipload of recruits arrived in Durban in 1874. However, discrimination not only continued in Natal, but also was codified into law against which the Indian government was helpless, despite its protests. 

Notwithstanding the discrimination and restrictions, Indians were able to assert themselves to a considerable degree in most areas of the Natal economy, thereby whipping up the resentment of whites who used their positions of power and privilege to prevent Indians from advancing economically and socially.

The situation of discrimination was exacerbated in 1893 when Natal was granted responsible government. This meant that the South African Indians would have less effective petitioning recourse to either Britain or India and would have to rely entirely on themselves to achieve their political objectives.