About 32% of the Indian population presently resides in towns and cities, and national and state governments are intent on increasing that number. Based on the past experience of most of the developed world, urbanization is considered integral to modernization and progress. However, India’s urbanization rate is particularly low and this is partly related to the country’s low level of industrialization. At the same time, urban slums have expanded and their populations have increased despite successive policies aimed at slum eradication or rehabilitation. This study aims to connect macro trends in urbanization and the space economy with a finer scale analysis of the logic of slums and slum dweller views in order to consider the future of India’s cities. Most of the data presented here are based on extensive surveys of households and firms in Dharavi (Mumbai) that investigated work, well-being, livelihoods, community, and environmental issues. It is argued that slums may well be a structural feature of India’s modern urban landscape given India’s enormous challenge of creating significant employment opportunities in modern industries. Furthermore, urban slum environments, with all their shortcomings and challenges, may be conducive to small-scale, labor-intensive productive activity and provide relatively secure livelihoods.