The organic shawl used by Meghan Markle to swaddle baby Archie was reportedly made in an Indian sweatshop where workers are paid as little as 37p per hour.
The Duchess of Sussex was pictured cradling her son in a white and yellow summer blanket while watching Prince Harry play polo earlier this month.
MailOnline now claims the blanket, which costs £35, is sold by a Hong Kong based company called Malabar Baby that specialises in organic baby clothes.
Kensington Palace declined to comment on the report.
The Malabar Baby range is made by the textile company Nayika, based in the small town of Bagru, about an hour from the city of Jaipur in Rajasthan.
Workers at the factory, which has a total of 100 employees, were tracked down and it is alleged they are paid as little as 37p an hour.
Aruna Regar, a seamstress who works at the factory and who reportedly helped to add the finishing touches to the blanket, produced her pay slips showing she takes home an average of 6000 rupees per month (£70) for a 48 hour week.
When she was told how much the blanket is being sold for, she 'almost fainted with shock', according to the Mail.
Aruna, 50, who admitted she doesn't know who Meghan Markle is, told the site: "The blanket almost costs what I earn in two weeks and that's difficult for me to believe."
The 50-year-old reportedly lives in a half-built brick house in Bagru with her husband, two sons, their wives and two grandchildren.
The family of eight share just two poorly lit rooms which lack in water supply and a toilet.
Meghan has previously spoken of her wish to help the planet through her philanthropy and her desire to raise her son to be 'eco-conscious'.
Aruna said she was delighted to hear the Royals had chosen the Malabar Baby Indian blanket but said for her, her work is just about "survival".
She said: "We do not understand things about saving the planet or what is or is not organic. For us it is all about work and survival."
Aruna's husband Ram Gopal also works at the same factory and helped to cut the organic cotton that was used for Archie's blanket.
A typical day for the couple is from 9.30am to 5.30pm with a 25 minute break.
They don't have a formal contract but they are paid a fixed monthly salary.
When shown a picture of Meghan holding the blanket, Ram said: "I do not know who these people are but we had heard that somebody very famous was using our dohar. This must be them."
Since the duchess was pictured with the blanket, it has sold out online and is available for pre-order only.
The factory where the blanket is made is founded by Meenu Tholia, a local textile designer who also runs her own boutique in the city selling clothes under her own name.
The manager of the factory, Farid Mohammed, told the site Meghan and Archie have been the "best advertisement" for the product as it has become a "global hit".
He also addressed the low wages of some of the workers, replying: "These are industry standard rates. We do not set them.
"Our workers enjoy good conditions, much better than you'll find at other factories. We pay them the correct rate and treat them well."
Malabar Baby has also been approached for comment.
