• India being agrarian society

• Mughals ignored the need to to develop roads and highways for

commercial purposes.
• River-ways which worked seasonally were INDUS AND GANGA.
• Major difficulties were the safety on the roads, custom barriers, different
currencies circulating in different parts of the worlds.
• Abkhaz’s reign- 1556- 1605.
• MAHMUDIS- west, Gujarat, PAGODAS in the south.
• Older coin less valuable because of the wear and tear.

MERCHANTS-

• One of the most influential merchants – SETH HIRA NAND SAHU.

House of Jagath Seth. Was trading around PATNA started from
Rajasthan, acquired a great deal of fortune before the decline of the
Mughal empire. Main area of business being MONEY LENDING AND
BANKING, but also TRADING BUSINESS.
• SURAT being the most important port at the time.
• VIRJI VORA- the colossus of of business in the western India till he
died in the 1680.

• Other prominent business families-

• CHELLABYS- SHIPPERS FOR RED SEA AND PERSIAN GULF
• PAREKHS AND RUSTOMJIS were BROKERS.
• TRAVADIS- were BANKERS.
• AHEMEDBAD- major place for business community.
• Biggest merchant was -KHUSHALCHAND, grandson of shanti das
Zaveri, primarily JEWELERS.
• Great merchants of Ahmedabad were- VANMALIDAS TAPIDAS,
KAPURCHAND BHANSALI and PADAM GOPAL.
• Ahmedabad also known for textile – cotton, silk, and wool.
• Ahmedabad’s principal commodity being – INDIGO produced in
SARKHEJ.
• Producing a lot of saltpeter and gunpowder.
• Names of big merchants operating in north whose names were in
European trading companies – MALAY CHETTI, KASI VIRANNA
AND SUNCA RAMA CHETTI.
• India merchant princes to European traders dealt in -INDIGO, SPICES
AND TEXTILES.
• HUNDI system- known as the credit system, shroffs were a major part of
it.
• BANJARA business known as -nomads.
• Business type around 18th century was COMMERCIAL rather than
industrial.
• Lack of INDUSTRIAL initiative makes perfect sense.
• HINDU businessmen and their locations- JAINS and VIASHNAVAS
BANIAS in the west, KHATRIS in the north-west, JAINS and
AGARWAL banias in the north and east, CHETTIERS and KOMATIS
in the south.
• Most of the MUSLIM TRADERS in the GUJAGRAT-SINDH REGION.
• PARSEES- SURAT, NAVASARI AREA.
• MAHAJANS- pressure groups who were concerned with professional
matters, unlike caste panchayats.
 FORGEIN ELEMENTS-

• Europeans’ companies using INDIAN ports

• ENGLISH- SURAT, BOMBAY, MADRAS AND KOLKATTA
• DUTCH- SURAT, COCHIN, PULICUT, MASULIPATNAM, and
HOOGLY.
• FRENCH- SURAT, PONDI, HOOGLY.
• Arabs and Egyptians were active around the Calicut region.
• Armenians were regarded as the oldest merchants of the world.
• Trading of the Europeans was multi-lateral in character.

IMPERIAL CRISIS

• AURANGZEB death – 1707, the Mughal empire fell a few years past
this.
• POTEDARI- a system to tackle financial problems post Mughal empire
decline.
• Until the Mughal empire fell the Europeans where limited to a certain
region, but as they fell the Europeans started expanding their reach of
doing business significantly.
• GUJARAT was considered north during the 18th century.
• Land revenue was the principal source of income for the MARATHAS.
• POONA emerged as the de-facto capital of the MARATHA state in 1725.
• GAIKWAD- BARODA
• SCINDIAS- GWALIOR
• HOLKARS- INDORE.
• POONA the capital for HUDNI SYSTEM.
• Hari bhaktis- a company handling the financial transactions was a big
part of the Maratha kingdom, started by 2 brothers Hari and bhakti,
started for the Gaikwads, and expanded to POONA.
• At the end of the century, they closed their POONA branch.
• East India company started gaining foothold in the western India with
merchant collaboration.
• 1717- EIC secured the right of free trade without paying any custom
duties.
• Dacca was the capital of the Bengal province.
• Manekchand the son of HIRA NAND SAHU was given the right to mint
the government coins.
• Fateh Chand the adopted son of manekchand became the face in the
eastern part of the country especially in Bengal.
• Post 1739 the Marathas started raiding west-Bengal.
• When the Marathas and the Mughals were fighting each other the EIC
saw this as an opportunity and started capitalizing.
• Battle of Plassey- 1757 was a turning point for the EIC.
• NIZAM- founded in 1724.
• EIC used palmer and co. at that time.
• Ijara – revenue farming is ensuring the government has access to ready
cash.
• With the introduction of the postal system the dependency of the hundi
system was substantially reduced.
• EICs silver rupee was introduced and made it to be legal tender
throughout INDIA- 1835.
• MUGHAL EMPIRE – INDIAN MERCHANT PRINCE’S- EIC sequence
of power transfer from 1700-1835.
 TRANSISTION – EIC and the EAST

 During the emergence of EIC in India, there was a simultaneous

emergence of the industrial revolution, in the early 17th century.
 Using steam engines marked the beginning of this revolution.
 James watt- discovered the steam engine in 1765.
 Richard Arkwright- spinning frame- 1769.
 James Hargreaves spinning jenny – 1770.
 YORSHIRE and LANCASHIRE were the thriving centers of
textile production.
 Large coal and iron deposits in west- midlands and Staffordshire.
 Even the Britain was largely an agricultural society, but by 1850 it
became an industrial dominant society.
 Indian textile good were called CALICOES in the British market
and enjoyed considerable price advantage.

 With the industrial revolution, there was a reversal of role in the

cotton production and domestic goods were protected by tariff
being imposed on the imports.

 As the production scales increased in the Britain, they stopped

imports which hurt the Indian economy but the British goods
penetrated the Indian markets too.

 Industrial revolution made the Indian technology look outdated and

thing of the past.

 British lost its colonies to north America in 1776.

 In 1813 the British gave up the total monopoly of the Indian
trade, nearly after ruling it for 200 years.

 Free merchants adopted the AGENCY HOUSE system which

was like the hundi system at the international level.

 The agency houses being headquartered in mainly 3 cities

Calcutta, Bombay and madras, where most of the Europeans
lived.

 Battle of Plassey was held in – KOLKATTA, so it had more

European people living there, followed by Bombay and then
madras.

 First agency house was in BOMBAY – FORBES&CO in 1767,

the 2nd agency house as late as 1790 in Bombay by then Kolkata
had almost 15 such firms.

 Madras first agency house was founded by –THOMAS

PERRY.

 Agency house applied the strategy of entering the markets where

there was not enough reach from the Indian side and one such area
was coal mining, first attempted at 1775, but officially began in
the year 1820 when alexander and co. started exploring
Raniganj.

 Agency houses used BANIAS to overcome the language barrier

and they later became the lynchpin for the entire trade to go
around.
 There was a healthy collaboration between the agency houses and
the EIC- for loans, imports, and exports etc.

 The agency houses participated in – shipping, money lending,

general trading, tobacco, ivory, spices.

 China used to import opium from India for use, and it was so
profitable that everyone wanted a piece of it.

 Forbes and faucet financed the EIC to fight the Marathas from
1799-1806.

 The agency house in madras- sold navy bills and traded in madeira
wines. Main business being banking.

 Thomas perry financed the EIC war with tipu sultan.

 Perry started the leather goods business in 1805, perry became one
of the most prosperous businessmen in the city of madras.

 Perry died of cholera in 1824 at the age of 56 and buried in

cuddalore.

 Palmer and co although was not the first agency house in Calcutta
but became the most significant one.

 The first foreign bank set up by alexander and co. in 1770 was
called the bank of Hindustan, followed by commercial bank set
up by the mackintosh.

 Later, palmer and co. also started a bank of their own.

 Palmer and co. started publication house called the Calcutta
journal. And its only competition being cruttenden and co.

 Palmer and co. was referred as the opium king. Palmer and co
was also called the indigo king of Bengal.

 Charter act of 1813 – abolished the monopoly of the EIC.

 Indigo became the backbone of the trade between India and

Britain.

 1819-1825 – BOOM OF INDIGO

 1826- DECLINE OF INDIGO

 1830- PALMER AND CO.- BANKRUPT.

 Prominent Indian names in Calcutta after the fall of palmer

and co. – sheik Gulam Hussain, and Ram dulal dey. Ram dulal
dey was working as a banian for an American trader and made
tons of money exporting rice.

 DWARAKNATH TAGORE WAS THE MOST PROMINENT

BENGALI OF ALL TIME.

 SECULAR EDUCATION STARETD – 1835.

 William car of palmer and co. joined forces with dwarakanath

the most influential Bengali person to open shop in the year
1834.
  Union bank was set up in the year 1829. Which was the largest
business institution of his time and almost the entire of Calcutta
had high stakes in them. They wanted to expand their bank reach
and gave loans to indigo producers

 By 1848 the union bank as well as the car and Tagore co. had
to close shop as it was in losses. So, from 1830- 1850 the palmer
and co. agency house as well as the union bank along with
Tagore and carr co. engulfed.

 This crisis was called the commercial crisis of 1847, and

dwarakanath Tagore died 2 years before this.

 After this the shops were set up by the Russians like – Kilburn,
Mackenzie, Schoene, MacKinnon their interest being – tea,
insurance, and shipping.

 Later became British Indian steam navigation company.

THE WEST- GUJARAT, MUMBAI AND MORE

 The business life was more stable here than the east and boring too.
 Gujarat was known for its commercial tradition- trading and
moneylending.
 British people had limited presence in the west when compared to the
east.
 The western regions trade with Persian, Arabian and gulf countries
stopped after the decline of the Mughal empire.
 The western approach was very inward looking, and it had weakened the
commercial links with other parts of the country and the world.
 RISE OF BOMBAY –

1. Need for opium started increasing.

2. New opportunities came for Ahmedabad, Surat, broach, chambray,
Baroda, Bombay.
3. Chinese were addicted to opium and British loved the Chinese tea, so this
was the kind of exchange they made.
4. Large proportion of opium produced from Bengal was under the direct
jurisdiction of EIC.
5. Only EIC could secretly sell it to Chinese via private contractors.
6. The city of Ujjain was the most important part of the opium production,
and it was not under EICs direct control.

7. like the Europeans in the east used banias, the Europeans in the west used
Parsees.

8. EIC established Bombay dockyard in the year- 1736.

9. Wadia’s were one of the very prominent parse families. Their fortunes
increased when they started exporting cotton to china among other things.

10. After Parsees the next to be lured were the Guajarati banias, both Hindus
and Jains.

11. The Hindus and the Jains were involved with exporting cotton to china
as well as to Persian and Arabian markets.
KUTCH-KATHIWAR- REGION TO BOMBAY

 HINDU MERCHANTS – BHATIAS, LOHANAS, BANSALIS started

moving to Bombay in the beginning of the 19th century.
 MUSLIM MERCHANTS- BOHRAS, KHOJAS, MEMONS.
 Konkani Muslims were more successful in Bombay.
 Most prominent of them all – ROGHAYS- Muslim – NAKHODA
(ship maker).
 Bombay also had a small Jewish population – DAVID SASSON joined
them in 1832, started a two-way business house from India to Persia
known as – David sasson and sons.
 Bombay had become the commercial center by this time.
 1831 EIC lifted the opium ban, MALWA region became famous for
production of opium.
 BOMBAY BECOMES THE HUB FOR THE ENTIRE WEST
COAST.
 Exports to china successively rose after 1831, especially of opium,
Parsees were dominant in the field and retained their positions.
 British merchants used Indian ships to export opium instead of their own
to avoid the risks, because the export was unlawful.
 In the west people wanted banking system to emerge because of they
were taking losses with certain investments and thought banks can act as
a repository in the middle, but the emergence also did not fluctuate the
local business of shroff who were known for their hundi system.
 Parsees and Konkani Muslims build their trade on china trade.
 After 1840s their profits and business model took a hit because post that
the treaties of Nanking (1842) and Tientsin (1858) opened china to the
rest of the world for opium trade, and while the European and the other
exporters had steam engines, the Indian ships were outdated vessels.
 By 1850s India lost all its trade with china to Europe.
JAMSEETH JI JEJEEBHOY-

 born in 1783, to poor Parsee family, by 12 came to Mumbai to live with

maternal uncle and found his cousin who was a china trade, made 3 trips
to china and sold cotton to England during the napoleon wars and made a
small fortune, was in the leading businessmen in Mumbai at the early 19th
century(1800s) and by 1822 the britishers were using him to export
opium to china. By 1826 he started participating in the auction of the
trade and had a fleet of ships too.
 JEJEBOY has close ties with the most prominent men of Ahmedabad like
Kushal Chand, hatheesing, Karamchand, premchand related to shantilal
Zaveri, lalbhai family. Vakhatchand – was a nagarseeth.
 JEJEBOY was in business with the JARDINE MATHESON AND CO.
on the Chinese shores which was one of the most powerful agency shores
in china but later all this fell off once china made themselves open to the
worldwide trade.
 Jeejeebhoy was knitted in -1842,
 FIRST INDIAN TO RECEIVE THE – BARONETCY- 1857.
 As the china opening themselves to trade was the fall of Jeejeebhoy it
was an opportunity for David sasson the Jew from Persia who fled to
India.
 DAVID SASSOON- developed a multi-lateral channel among Persia,
Iraq, and Britain.
 Sassoon started doing business with china after 1842 once they were
open, Sassoon’s son elia has taken the responsibility for this trade, set up
bases in Shanghai and expanded to canton and Hong Kong, within the
first 5 years since 1842 gained near monopoly of the opium trade and
unlike the Jeejeebhoy he used rental ships.
 Where the first to open shop in JAPAN- 1853, after JAPAN ended
their centuries long isolation from the rest of the world.
 Sassoon later applied for British citizenship in 1853.
 Sassoon opened a branch in LONDON- 1858.

Others expanded themselves at regional or local levels only. – like

Hinduja, Lohana, and Bhatia’s
 a lot of them came to Gujarat and few of them went to all parts of the
world, these people where generally Rajasthani people looking for better
opportunities. They hailed from a region called Marwar and first went to
west Bengal now and they coined the term Marwari there.
 First railway line opened in the year- 1854. Dalhousie made it happen.
 DALHOUSIE- father of post and telegraph system of INDIA.
 He emphasized on the people of India learning the English language and
under his rule the first 3 universities were established.
 Gujarat vernacular society was established in -1848.
 Brahmo samajh founded in late-1820s.
 1850- first company law ever adopted in India.
 After the losses suffered by the Indians in the Calcutta region, they were
not ready to take another risk, so when the jute production opportunity
came knocking, they let the scotmen-scootish people take it.
 Crimean war (1854-1860) was the reason their supply from Russia was
affected which gave the opportunity for jute production.
 Scott people had the jute monopoly in the city of Calcutta till 1920s.
 Then came setting up the manufacturing plant for cotton, which was first
started in BOMBAY and later in Ahmedabad as well.
 In Ahmedabad it was done by RANCHODLAL CHHOTALAL, who
worked in the British government and rose to the highest rank possible by
an Indian, but lacked funds to start it, it took him nearly 10 years to get
his plan into proper motion when he started working in a bank in
Ahmedabad in the year-1858.- AHEMDABAD SPINNING AND
WEAVING COMPANY.
 All the technical details of the manufacturing plan were given to
ranchodlal by George full James.
 The first cotton manufacturing plant based on modern technology was
started by a PARSEE in Mumbai named- cowasji nanabhai davar in the
year 1854.
 Looking at this at least 6 other mills were opened in the next 6 years.
 BOMBAY AND AHMEDABAD were the hub for the textile production.

THE INTERLUDE

 Britain used to import cotton from USA, but in the year 1861 civil war
broke in USA causing a heavy disruption in the supply and Britain turned
 to India to fill this gap, so the production rose to very significant level
and people started investing in this business, but as soon as the war was
over (1865) the Britain shifted again to the USA causing a major turmoil
in the Indian economy. One such businessman who got affected was
premchand roychand. By1866, he lost a lot of money.
 In Calcutta people tried investing in tea plantations in 1861 because of the
increase in demand but eventually it all collapsed by 1866.
 So, during this time it was only the Scotsmen who could make some bank
in the jute industry.
 Brahmno smajah was started in Kolkata.
 PRARTHANA SAMAJH – was the next samajh made for competent
authority.
 All the business brought a lot of wealth to the city.it was first used to
improve the city, then to promote the businesses.

RISE OF THE INDUSTRIAL ELITIE

 The telegraph line between India and Europe was set up by 1866.
 The Suez Canal opened for business.
 A lot of new cotton and textile mills surfaced from m1860-1875 and all
the indigenous people even made a mill-owners association to preserve
their rights.
 Ahmedabad people also started their own mill-owners association in the
year 1891.
 In 1882 the Britain government abolished all import duties on textile
goods. And this was done to promote free trade.
 Factories act of 1881-1892 were announced for the legislation purposes
of the millworkers and increased the cost of labor to the producer.
 Bhatia’s who were active in the Bombay region since the early 19 th
century only stepped into the textile business once they saw that it was
profitable and with them came a lot of other industrialists like Gokaldas,
vasanji, thackersey and jaitha. By 1880 there only 6 mills only controlled
by the Bhatia’s.
 In Ahmedabad it was seths- Jains and Vaishnava banias, once they
realized cotton manufacturing was more profitable than trading.
 Gujarat spinning and weaving company was found by – bhagubhai in
1877.
 Banias were spinning around 65% of the entire Ahmedabad textile scene
by 1892.
 Sassoon the Jewish businessman from Bombay also started his own mill
in the year 1874, but by 1892 he also added a silk mill to his empire.
 Sassoon company were the largest employers in and around Bombay in
the year 1877.
 The most powerful British agency was the killick Nixon and co. and did
not enter the industry till 1896, this was when they launched the
Kohinoor mills.
 Parsees who dominated the mill industry- din Shaw petit he did so well
that he was knighted in -1887 and conferred a BARONETCY 3 years
later.
 Dinsaw petit came in collab with nowrosjee Wadia to introduce a 4000-
horsepower steam engine.
 The other formidable parses were the tatas, Jamshedji tata whose dad
shifted to Bombay from Navsari in the early 19th century.
 Jamshedji tata was sent to London to study how they operate the mills
and plants and came back to India and wanted to start a big plant to make
waves. The first mill they set up was called Alexandria mill in the year
1869.
 Jamshedji was one of the first few businessmen who set up plant not in
Bombay but close by to the resources they needed, like Nagpur.
 Jamshedji’s tatas most successful venture was the set-up of the taj mahal
in Bombay in 1904.
 Morajee gokuldas was another such person who set up shop close to the
resource and not in Bombay.
 After moranjees death – thackersey mulji was the leading Bhatia in the
family. And makanji khatau.
 Sir currimbhoy Ebrahim was the only prominent Muslim in the textile
market scene, owned ships, had offices in Bombay, Hong Kong, and
shanghai. Founded his mills in 1888 which was in Indore.

CALCUTTA SCENE –

 From 1866-1872 there were a lot of jute firms being set up mainly by
the Scotsmen.
 This quick expansion was too much for the market such that the
market went into recession.
 Indian jute mill association was set up in the year 1884.
 But after a while the market caught up and started doing well and it
was profitable.
 The use of coal increased as it was the fuel which ran the jute and
cotton mills and even railways, so from 1860 the the coal demand and
coal mining also increased exponentially especially in the raniganj
area. EASTERN INDIA was the highlight for the coal mining in India.
 The tea industry also bounced back after the 1860 fiasco from the
1870s,
 Indians were mostly aloof in the eastern part from the growing
opportunities, and it was done by English or Scotsmen, which were
mainly (JUTE, COAL, COTTON, TEA)
 After a long time, a partnership of Rajendra Mookerjee and martin a
London based businessmen started a company called martin&co in the
year 1892. And soon Mookerjee took over once martin was dead.
 MOST prominent partnerships under British controls were BIRD &
CO. Sam bird the founder came to India in 1858 and started as a
labor contractor joined forces with his brother in 1864 and founded a
coal company and jute company and became the largest exporter of
Indian coal.
 Another such story was from the Scotsmen called Andrew yale who
started his firm in the year 1863 and went to own as many as 31
enterprises. And put a firm foothold in the 19th century.

NORTH, SOUTH, NORTH-WEST

 Everything was started by expatriates.

 Elgin mills in Kanpur was the first cotton mill set up in north India in
1861.
 Marwaris were dominant in the north and chettiers in the south in the
madras region.
 Thomas perry the welsh guy was the pioneer of industrialization in the
south region as he set up an indigo shop.
 After parry died William dare overtook the company and expanded
into coffee plantation in the year 1823 near the Mysore region.
 They expanded to sugar mills as well which played a crucial role, this
was done in the year 1842 and soon bone mill for manure production.
 Binny and co. was another such industrialist of the south and acquired
Indian steam navigation company in the year 1865, which was a
highlight of his company.
 The top 3 industrialists of the south were- THOMAS PERRY, BINNY
AND ARBUTHNOT.
 Binny’s best contribution was the introduction of a cotton mill to the
region in the year 1876.
 North-west was only known for its brewery set up by general dyer of
the Jallianwala bag.
 West and east were known for- cotton, jute, coal, and tea.
 South was known for – sugar, shipping, manufacturing, and
navigation.
 J.N TATA was the first mill owner to allow calculating the
depreciation costs.
 Stockbrokers’ association of Bombay was established in the year-1875
and Calcutta stock exchange in the year 1908.
 First bank to be launched in India was the Alexandria bank in the year
1770.
 All the presidencies had government-controlled banks which were
called the presidency banks, there were 4 private banks out of which
also the 3 were under British rule.
 The bank of Allahabad was founded in the year-1865.
 PNB was the only bank which was controlled by Indians- in the year
1894.

DEVELOPING AND IDENTITY -CHAPTER- 7

 The indo-british partnership was formed in the 1830-1840s but

recently as the industrialization era started, the Indian industrial
class was becoming increasingly more conscious about its own
identity.
 Certain events made them think so too
 Manchester’s growing hostility towards the Indian textile industry
was the first visible sign on the assault on the Indian sensitivities.
 All the import duties on textile duties were abolished in the year
1882, as in the factory act of 1892 they set up a ploy to snatch from
the competitive advantage. The 2nd sign was the imposition of
countervailing excise duty in the year 1894 on the production of
the textile goods in India to offset the duty on imports.
 Many Indian industrialists were openly against it like J.N. TATA
and ranchodlal but did not participate in the protests.
 As the industrial revolution came and the country was growing the
middle class started a sense of disillusionment from the crown
government and many Indian journalists pointed this out as-well
like dadabhai naroji, mahadev Govind ranade etc.
 They clearly mentioned that the crown government was exploiting
the Indian resources for their own benefit. All the Indians wanted
was to be treated equally with the British.
 The INDIAN NATIONAL CONGRESS was set up in the year
1885.and all the industrialists were in close contact with the party.
 Godrej is owned by a parse.
 The swadeshi spirit got stronger in – Delhi, Punjab region.
 Agriculture was still the primary job of these people.
 The importance of industrial revolution and modern industries for
the economic good was seen by everyone now.
 The establishment of PNB bank was the result of this swadeshi
movement in 1894.
 Harikishan lal was one of the very prominent owners of PNB and
started – BHARAT INSURANCE company and PEOPLES BANK
of India the first of their kind and he was also responsible for
generating industrial interest in the Punjabi households.

 The swadeshi movement was in simmer till 1905, but when lord
Curzon decided to divide the Bengal into east and west it
transformed into full- fledged protest movement.
 A call was taken by the Indians to boycott all foreign goods and
promote indigenous products.
 Experiments of 1840s killed the Bengali interests for business, but
the swadeshi movement revived it
 PRAFULLA CHANDRA RAY - set up Bengal chemicals and
started their own pharmaceutical company.
 TRIBUVANDAS KALYANDAS GAJJAR and A.S.
KOTIBHASKAR to form alembic chemicals which was one of the
 first 4 chemical plants established in India and first in the entire
west.
 LAXMAN RAO KIRLOSKAR- invented a better way to yield
plough. And later, set up the Kirloskar brothers.
 PAISA FUND GLASS works set up at Talegaon POONA in 1905.
 1899 IRKSOME archaic regulations were replaced by a new set of
granted rules.
 CHANDA district was a bust and later DURG district was set up as
the goal for iron production.
 Jamsedji TATA passed on the helm to darobji TATA and died in
the year 1904 in Germany.
 TISCO- TATA IRON AND STEEL COMPANY was finally
registered in the year 1907 and was situated in SAKSHI, a district
in BIHAR. Started production by 1911 and was the first steel firm
in India.

THE IMPACT OF THE SOUTH

 The swadeshi spirit in the south was manifested in the region by
establishing several banks.
 The south was mainly owned by the trio of binny, parry and
Arbuthnot. But 2 of the 3 failed by 1906.
 Sir JAMES LYKE head of BRITISH INDIA NAVIGATION
COMPANY took over the binny and co.
 Arbuthnot was sentenced to prison for 18 months for cheating.
 This made way for Indian. Banks. –
 INDIAN BANK- 1907
 New ventures like UNITED INDIA LIFE INSURANCE
COMPANY were floated by lingam brothers.
 PUNAJB AND SIND BANK- 1908.
 CENTRAL BANK OF INDIA- 1911
 BANK OF BARODA- 1908.
 After the steel plant, the TATAs wanted to venture into the
hydroelectric power supply, darobji registered the company by
1910 and was functional by 1915 as LORD SYDENHAM helped.

EFFETCS OF THE FIRST WORLD WAR

 The WAR was a very profitable time for the INDUSTRIAL

AND COMMERICAL SECTOR, but disastrous for BANKING
SECTOR.
 WAR disrupted imports and exports, so the price of the Indian
goods went up.
 Crown government which was skeptical for using TATs steel
had no other choice as the imports stopped and they developed a
great synergy together.
 To meet the power generation as the Indian companies were
supplying materials to both the government and for exports tata
hydroelectric plants had to expand and new players like
ANDHRA VALLEY POWER SUPPLY AND TATA POWER
COMPANY.
 TATA GROUP diversified into CEMENT PRODUCTION
established plant in PORABANDAR KATHIWAR and added
the 2nd one in BIHAR.
  TATA joined into many other sectors but little they knew about
these sectors.
 THE COTTON INDUSTRY benefited the most from the war as
much as 15-18 times more than pre-war.
 Greatest were the companies that catered to the domestic
demand of the cloth.
 LOSSES FOR THE CHINEESE MARKETS-1913.
 European industrialists like BIRD BROTHERS who were into
jute, coal and tea also made handsome profits but not in the tea
sector.
 BIRD BROTHERS acquired F.W. Heliers& co.
 THE BANKING SECTOR did not function well at all the RBI
HAD TO SET UP RULES FOR proper functioning in the year
1936.

MARWARI ENTRY INTO THE INDUSTRY

 A sizeable Marwari population had migrated everywhere, even to places

like Hyderabad, Poona, Nagpur etc.
 SARUPCHAND HUKUMCHAND was one of the first most prominent
Marwaris who made his money through opium, sugar and other trades
opened cotton mills at his headquarters NDORE in 1909 and 1914 and
later a JUTE MILL.
 Perfect pottery was formed by KHUSHALCHAND IN JABALPUR by
1905.
 Marwaris made their presence felt especially in the KOLKATTA region.
 Marwaris were the locals who helped the European industrialists and thus
were near all the new things happening.
 GHANSHYAMDAS BIRLAs family symbolized more than any other
family. From PILANI in RAJASTHAN they moved to Mumbai in 1857
looking for trade but eventually had to move to CALCUTTA because of
the plague.
 IN CALCUTTA they got associated with the firm TARACHAND
GHYANSYHAM DAS and later became the BANIAS for the ANDREW
YULE & CO.
 BIRLAS made a ton of fortune during the war, trading in jute, coal,
cotton etc.
 BIRLAS WERE THE FIRST TO OPEN A JUTE EXPORT OFFICE IN
LONDON IN THE YEAR 1917.
 GHYANSHYAMDAS then in the year 1916 marked the beginning of his
industrial carrier by buying a cotton mill in DELHI.
 Barely after 4 years BIRLAS set up a JUTE MILL IN COMPETITION
WITH THE EUROPEANS.
 There was a competition between BIRLAS AND HUKUMCHAND until
HUKUMCHAND sold all his mills to the BIRLAS in the year 1939.
 Other famous mar -wadis were-
 HARGOVIND DALMIA- COTTON MILL- 1921
 SINGHANIAS WHO WERE VERY PROMINENT IN KANPUR and
JUGGILAL their forerunner.
 JAIPURIA partnered with SHOBA SINGH – KHALSA MILLS – 1923.
 NANDAL FAMILY TEXTILE MILL INDORE- 1922.
 ANANDILAL PODAR in collab with JAPANEESE in the year 1924.
 CHAPTER-8 TOWARDS MATURITY

 THE CROWN government started placating a healthy relationship

towards Indian businesses, because they saw how useful they could get
during the WORLD WAR-1 phase.
 INDIAN INDUSTRIAL COMMISSION was set up to help Indian
interests, and the tariff protection to Indian industries.
 GOVERNMENT ACT OF 1919- to represent the native business
interests in the legislative councils.
 MAHATMA GANDHI entered the scene around 1915 and was fighting
for better rights and this drove a gulf between the native and the
expatriate business interests.
 THE INDIAN BUSINESSES WERE GROWING AT A FASTER RATE
THAN THE EXPATRIATE ONES post the WORLD WAR.
 INDIANS could not challenge BRITISH MONOPOLY in the sectors like
coal, tea, jute etc.

EXPANSION OF THE OLDER HOUSES


• India being agrarian society
• Mughals ignored the need to to develop roads and highways for
commercial purposes.
• River-ways which worked seasonally were INDUS AND GANGA.
• Major difficulties were the safety on the roads, custom barriers, different
currencies circulating in different parts of the worlds.
• Abkhaz’s reign- 1556- 1605.
• MAHMUDIS- west, Gujarat, PAGODAS in the south.
• Older coin less valuable because of the wear and tear.

MERCHANTS-

• One of the most influential merchants – SETH HIRA NAND SAHU.

House of Jagath Seth. Was trading around PATNA started from
Rajasthan, acquired a great deal of fortune before the decline of the
Mughal empire. Main area of business being MONEY LENDING AND
BANKING, but also TRADING BUSINESS.
• SURAT being the most important port at the time.
• VIRJI VORA- the colossus of of business in the western India till he died
in the 1680.

• Other prominent business families-

• CHELLABYS- SHIPPERS FOR RED SEA AND PERSIAN GULF
• PAREKHS AND RUSTOMJIS were BROKERS.
• TRAVADIS- were BANKERS.
• AHEMEDBAD- major place for business community.
• Biggest merchant was -KHUSHALCHAND, grandson of shanti das
Zaveri, primarily JEWELERS.
• Great merchants of Ahmedabad were- VANMALIDAS TAPIDAS,
KAPURCHAND BHANSALI and PADAM GOPAL.
• Ahmedabad also known for textile – cotton, silk, and wool.
• Ahmedabad’s principal commodity being – INDIGO produced in
SARKHEJ.
• Producing a lot of saltpeter and gunpowder.
• Names of big merchants operating in north whose names were in
European trading companies – MALAY CHETTI, KASI VIRANNA
AND SUNCA RAMA CHETTI.
• India merchant princes to European traders dealt in -INDIGO, SPICES
AND TEXTILES.
• HUNDI system- known as the credit system, shroffs were a major part of
it.
• BANJARA business known as -nomads.
• Business type around 18th century was COMMERCIAL rather than
industrial.
• Lack of INDUSTRIAL initiative makes perfect sense.
• HINDU businessmen and their locations- JAINS and VIASHNAVAS
BANIAS in the west, KHATRIS in the north-west, JAINS and
AGARWAL banias in the north and east, CHETTIERS and KOMATIS
in the south.
• Most of the MUSLIM TRADERS in the GUJAGRAT-SINDH REGION.
• PARSEES- SURAT, NAVASARI AREA.
• MAHAJANS- pressure groups who were concerned with professional
matters, unlike caste panchayats.
 FORGEIN ELEMENTS-

• Europeans’ companies using INDIAN ports

• ENGLISH- SURAT, BOMBAY, MADRAS AND KOLKATTA
• DUTCH- SURAT, COCHIN, PULICUT, MASULIPATNAM, and
HOOGLY.
• FRENCH- SURAT, PONDI, HOOGLY.
• Arabs and Egyptians were active around the Calicut region.
• Armenians were regarded as the oldest merchants of the world.
• Trading of the Europeans was multi-lateral in character.

IMPERIAL CRISIS

• AURANGZEB death – 1707, the Mughal empire fell a few years past
this.
• POTEDARI- a system to tackle financial problems post Mughal empire
decline.
• Until the Mughal empire fell the Europeans where limited to a certain
region, but as they fell the Europeans started expanding their reach of
doing business significantly.
• GUJARAT was considered north during the 18th century.
• Land revenue was the principal source of income for the MARATHAS.
• POONA emerged as the de-facto capital of the MARATHA state in 1725.
• GAIKWAD- BARODA
• SCINDIAS- GWALIOR
• HOLKARS- INDORE.
• POONA the capital for HUDNI SYSTEM.
• Hari bhaktis- a company handling the financial transactions was a big
part of the Maratha kingdom, started by 2 brothers Hari and bhakti,
started for the Gaikwads, and expanded to POONA.
• At the end of the century, they closed their POONA branch.
• East India company started gaining foothold in the western India with
merchant collaboration.
• 1717- EIC secured the right of free trade without paying any custom
duties.
• Dacca was the capital of the Bengal province.
• Manekchand the son of HIRA NAND SAHU was given the right to mint
the government coins.
• Fateh Chand the adopted son of manekchand became the face in the
eastern part of the country especially in Bengal.
• Post 1739 the Marathas started raiding west-Bengal.
• When the Marathas and the Mughals were fighting each other the EIC
saw this as an opportunity and started capitalizing.
• Battle of Plassey- 1757 was a turning point for the EIC.
• NIZAM- founded in 1724.
• EIC used palmer and co. at that time.
• Ijara – revenue farming is ensuring the government has access to ready
cash.
• With the introduction of the postal system the dependency of the hundi
system was substantially reduced.
• EICs silver rupee was introduced and made it to be legal tender
throughout INDIA- 1835.
• MUGHAL EMPIRE – INDIAN MERCHANT PRINCE’S- EIC sequence
of power transfer from 1700-1835.
 TRANSISTION – EIC and the EAST

 During the emergence of EIC in India, there was a simultaneous

emergence of the industrial revolution, in the early 17th century.
 Using steam engines marked the beginning of this revolution.
 James watt- discovered the steam engine in 1765.
 Richard Arkwright- spinning frame- 1769.
 James Hargreaves spinning jenny – 1770.
 YORSHIRE and LANCASHIRE were the thriving centers of
textile production.
 Large coal and iron deposits in west- midlands and Staffordshire.
 Even the Britain was largely an agricultural society, but by 1850 it
became an industrial dominant society.
 Indian textile good were called CALICOES in the British market
and enjoyed considerable price advantage.

 With the industrial revolution, there was a reversal of role in the

cotton production and domestic goods were protected by tariff
being imposed on the imports.

 As the production scales increased in the Britain, they stopped

imports which hurt the Indian economy but the British goods
penetrated the Indian markets too.

 Industrial revolution made the Indian technology look outdated and

thing of the past.

 British lost its colonies to north America in 1776.

 In 1813 the British gave up the total monopoly of the Indian
trade, nearly after ruling it for 200 years.

 Free merchants adopted the AGENCY HOUSE system which

was like the hundi system at the international level.

 The agency houses being headquartered in mainly 3 cities

Calcutta, Bombay and madras, where most of the Europeans
lived.

 Battle of Plassey was held in – KOLKATTA, so it had more

European people living there, followed by Bombay and then
madras.

 First agency house was in BOMBAY – FORBES&CO in 1767,

the 2nd agency house as late as 1790 in Bombay by then Kolkata
had almost 15 such firms.

 Madras first agency house was founded by –THOMAS

PERRY.

 Agency house applied the strategy of entering the markets where

there was not enough reach from the Indian side and one such area
was coal mining, first attempted at 1775, but officially began in
the year 1820 when alexander and co. started exploring
Raniganj.

 Agency houses used BANIAS to overcome the language barrier

and they later became the lynchpin for the entire trade to go
around.
 There was a healthy collaboration between the agency houses and
the EIC- for loans, imports, and exports etc.

 The agency houses participated in – shipping, money lending,

general trading, tobacco, ivory, spices.

 China used to import opium from India for use, and it was so
profitable that everyone wanted a piece of it.

 Forbes and faucet financed the EIC to fight the Marathas from
1799-1806.

 The agency house in madras- sold navy bills and traded in madeira
wines. Main business being banking.

 Thomas perry financed the EIC war with tipu sultan.

 Perry started the leather goods business in 1805, perry became one
of the most prosperous businessmen in the city of madras.

 Perry died of cholera in 1824 at the age of 56 and buried in

cuddalore.

 Palmer and co although was not the first agency house in Calcutta
but became the most significant one.

 The first foreign bank set up by alexander and co. in 1770 was
called the bank of Hindustan, followed by commercial bank set
up by the mackintosh.

 Later, palmer and co. also started a bank of their own.

 Palmer and co. started publication house called the Calcutta
journal. And its only competition being cruttenden and co.

 Palmer and co. was referred as the opium king. Palmer and co
was also called the indigo king of Bengal.

 Charter act of 1813 – abolished the monopoly of the EIC.

 Indigo became the backbone of the trade between India and

Britain.

 1819-1825 – BOOM OF INDIGO

 1826- DECLINE OF INDIGO

 1830- PALMER AND CO.- BANKRUPT.

 Prominent Indian names in Calcutta after the fall of palmer

and co. – sheik Gulam Hussain, and Ram dulal dey. Ram dulal
dey was working as a banian for an American trader and made
tons of money exporting rice.

 DWARAKNATH TAGORE WAS THE MOST PROMINENT

BENGALI OF ALL TIME.

 SECULAR EDUCATION STARETD – 1835.

 William car of palmer and co. joined forces with dwarakanath

the most influential Bengali person to open shop in the year
1834.
  Union bank was set up in the year 1829. Which was the largest
business institution of his time and almost the entire of Calcutta
had high stakes in them. They wanted to expand their bank reach
and gave loans to indigo producers

 By 1848 the union bank as well as the car and Tagore co. had
to close shop as it was in losses. So, from 1830- 1850 the palmer
and co. agency house as well as the union bank along with
Tagore and carr co. engulfed.

 This crisis was called the commercial crisis of 1847, and

dwarakanath Tagore died 2 years before this.

 After this the shops were set up by the Russians like – Kilburn,
Mackenzie, Schoene, MacKinnon their interest being – tea,
insurance, and shipping.

 Later became British Indian steam navigation company.

THE WEST- GUJARAT, MUMBAI AND MORE

 The business life was more stable here than the east and boring too.
 Gujarat was known for its commercial tradition- trading and
moneylending.
 British people had limited presence in the west when compared to the
east.
 The western regions trade with Persian, Arabian and gulf countries
stopped after the decline of the Mughal empire.
 The western approach was very inward looking, and it had weakened the
commercial links with other parts of the country and the world.
 RISE OF BOMBAY –

12.Need for opium started increasing.

13.New opportunities came for Ahmedabad, Surat, broach, chambray,
Baroda, Bombay.
14.Chinese were addicted to opium and British loved the Chinese tea, so this
was the kind of exchange they made.
15.Large proportion of opium produced from Bengal was under the direct
jurisdiction of EIC.
16.Only EIC could secretly sell it to Chinese via private contractors.
17.The city of Ujjain was the most important part of the opium production,
and it was not under EICs direct control.

18.like the Europeans in the east used banias, the Europeans in the west used
Parsees.

19. EIC established Bombay dockyard in the year- 1736.

20.Wadia’s were one of the very prominent parse families. Their fortunes
increased when they started exporting cotton to china among other things.

21. After Parsees the next to be lured were the Guajarati banias, both Hindus
and Jains.

22. The Hindus and the Jains were involved with exporting cotton to china
as well as to Persian and Arabian markets.
KUTCH-KATHIWAR- REGION TO BOMBAY

 HINDU MERCHANTS – BHATIAS, LOHANAS, BANSALIS started

moving to Bombay in the beginning of the 19th century.
 MUSLIM MERCHANTS- BOHRAS, KHOJAS, MEMONS.
 Konkani Muslims were more successful in Bombay.
 Most prominent of them all – ROGHAYS- Muslim – NAKHODA
(ship maker).
 Bombay also had a small Jewish population – DAVID SASSON joined
them in 1832, started a two-way business house from India to Persia
known as – David sasson and sons.
 Bombay had become the commercial center by this time.
 1831 EIC lifted the opium ban, MALWA region became famous for
production of opium.
 BOMBAY BECOMES THE HUB FOR THE ENTIRE WEST
COAST.
 Exports to china successively rose after 1831, especially of opium,
Parsees were dominant in the field and retained their positions.
 British merchants used Indian ships to export opium instead of their own
to avoid the risks, because the export was unlawful.
 In the west people wanted banking system to emerge because of they
were taking losses with certain investments and thought banks can act as
a repository in the middle, but the emergence also did not fluctuate the
local business of shroff who were known for their hundi system.
 Parsees and Konkani Muslims build their trade on china trade.
 After 1840s their profits and business model took a hit because post that
the treaties of Nanking (1842) and Tientsin (1858) opened china to the
rest of the world for opium trade, and while the European and the other
exporters had steam engines, the Indian ships were outdated vessels.
 By 1850s India lost all its trade with china to Europe.
JAMSEETH JI JEJEEBHOY-

 born in 1783, to poor Parsee family, by 12 came to Mumbai to live with

maternal uncle and found his cousin who was a china trade, made 3 trips
to china and sold cotton to England during the napoleon wars and made a
small fortune, was in the leading businessmen in Mumbai at the early 19th
century(1800s) and by 1822 the britishers were using him to export
opium to china. By 1826 he started participating in the auction of the
trade and had a fleet of ships too.
 JEJEBOY has close ties with the most prominent men of Ahmedabad like
Kushal Chand, hatheesing, Karamchand, premchand related to shantilal
Zaveri, lalbhai family. Vakhatchand – was a nagarseeth.
 JEJEBOY was in business with the JARDINE MATHESON AND CO.
on the Chinese shores which was one of the most powerful agency shores
in china but later all this fell off once china made themselves open to the
worldwide trade.
 Jeejeebhoy was knitted in -1842,
 FIRST INDIAN TO RECEIVE THE – BARONETCY- 1857.
 As the china opening themselves to trade was the fall of Jeejeebhoy it
was an opportunity for David sasson the Jew from Persia who fled to
India.
 DAVID SASSOON- developed a multi-lateral channel among Persia,
Iraq, and Britain.
 Sassoon started doing business with china after 1842 once they were
open, Sassoon’s son elia has taken the responsibility for this trade, set up
bases in Shanghai and expanded to canton and Hong Kong, within the
first 5 years since 1842 gained near monopoly of the opium trade and
unlike the Jeejeebhoy he used rental ships.
 Where the first to open shop in JAPAN- 1853, after JAPAN ended
their centuries long isolation from the rest of the world.
 Sassoon later applied for British citizenship in 1853.
 Sassoon opened a branch in LONDON- 1858.

Others expanded themselves at regional or local levels only. – like

Hinduja, Lohana, and Bhatia’s
 a lot of them came to Gujarat and few of them went to all parts of the
world, these people where generally Rajasthani people looking for better
opportunities. They hailed from a region called Marwar and first went to
west Bengal now and they coined the term Marwari there.
 First railway line opened in the year- 1854. Dalhousie made it happen.
 DALHOUSIE- father of post and telegraph system of INDIA.
 He emphasized on the people of India learning the English language and
under his rule the first 3 universities were established.
 Gujarat vernacular society was established in -1848.
 Brahmo samajh founded in late-1820s.
 1850- first company law ever adopted in India.
 After the losses suffered by the Indians in the Calcutta region, they were
not ready to take another risk, so when the jute production opportunity
came knocking, they let the scotmen-scootish people take it.
 Crimean war (1854-1860) was the reason their supply from Russia was
affected which gave the opportunity for jute production.
 Scott people had the jute monopoly in the city of Calcutta till 1920s.
 Then came setting up the manufacturing plant for cotton, which was first
started in BOMBAY and later in Ahmedabad as well.
 In Ahmedabad it was done by RANCHODLAL CHHOTALAL, who
worked in the British government and rose to the highest rank possible by
an Indian, but lacked funds to start it, it took him nearly 10 years to get
his plan into proper motion when he started working in a bank in
Ahmedabad in the year-1858.- AHEMDABAD SPINNING AND
WEAVING COMPANY.
 All the technical details of the manufacturing plan were given to
ranchodlal by George full James.
 The first cotton manufacturing plant based on modern technology was
started by a PARSEE in Mumbai named- cowasji nanabhai davar in the
year 1854.
 Looking at this at least 6 other mills were opened in the next 6 years.
 BOMBAY AND AHMEDABAD were the hub for the textile production.

THE INTERLUDE

 Britain used to import cotton from USA, but in the year 1861 civil war
broke in USA causing a heavy disruption in the supply and Britain turned
 to India to fill this gap, so the production rose to very significant level
and people started investing in this business, but as soon as the war was
over (1865) the Britain shifted again to the USA causing a major turmoil
in the Indian economy. One such businessman who got affected was
premchand roychand. By1866, he lost a lot of money.
 In Calcutta people tried investing in tea plantations in 1861 because of the
increase in demand but eventually it all collapsed by 1866.
 So, during this time it was only the Scotsmen who could make some bank
in the jute industry.
 Brahmno smajah was started in Kolkata.
 PRARTHANA SAMAJH – was the next samajh made for competent
authority.
 All the business brought a lot of wealth to the city.it was first used to
improve the city, then to promote the businesses.

RISE OF THE INDUSTRIAL ELITIE

 The telegraph line between India and Europe was set up by 1866.
 The Suez Canal opened for business.
 A lot of new cotton and textile mills surfaced from m1860-1875 and all
the indigenous people even made a mill-owners association to preserve
their rights.
 Ahmedabad people also started their own mill-owners association in the
year 1891.
 In 1882 the Britain government abolished all import duties on textile
goods. And this was done to promote free trade.
 Factories act of 1881-1892 were announced for the legislation purposes
of the millworkers and increased the cost of labor to the producer.
 Bhatia’s who were active in the Bombay region since the early 19 th
century only stepped into the textile business once they saw that it was
profitable and with them came a lot of other industrialists like Gokaldas,
vasanji, thackersey and jaitha. By 1880 there only 6 mills only controlled
by the Bhatia’s.
 In Ahmedabad it was seths- Jains and Vaishnava banias, once they
realized cotton manufacturing was more profitable than trading.
 Gujarat spinning and weaving company was found by – bhagubhai in
1877.
 Banias were spinning around 65% of the entire Ahmedabad textile scene
by 1892.
 Sassoon the Jewish businessman from Bombay also started his own mill
in the year 1874, but by 1892 he also added a silk mill to his empire.
 Sassoon company were the largest employers in and around Bombay in
the year 1877.
 The most powerful British agency was the killick Nixon and co. and did
not enter the industry till 1896, this was when they launched the
Kohinoor mills.
 Parsees who dominated the mill industry- din Shaw petit he did so well
that he was knighted in -1887 and conferred a BARONETCY 3 years
later.
 Dinsaw petit came in collab with nowrosjee Wadia to introduce a 4000-
horsepower steam engine.
 The other formidable parses were the tatas, Jamshedji tata whose dad
shifted to Bombay from Navsari in the early 19th century.
 Jamshedji tata was sent to London to study how they operate the mills
and plants and came back to India and wanted to start a big plant to make
waves. The first mill they set up was called Alexandria mill in the year
1869.
 Jamshedji was one of the first few businessmen who set up plant not in
Bombay but close by to the resources they needed, like Nagpur.
 Jamshedji’s tatas most successful venture was the set-up of the taj mahal
in Bombay in 1904.
 Morajee gokuldas was another such person who set up shop close to the
resource and not in Bombay.
 After moranjees death – thackersey mulji was the leading Bhatia in the
family. And makanji khatau.
 Sir currimbhoy Ebrahim was the only prominent Muslim in the textile
market scene, owned ships, had offices in Bombay, Hong Kong, and
shanghai. Founded his mills in 1888 which was in Indore.

CALCUTTA SCENE –

 From 1866-1872 there were a lot of jute firms being set up mainly by
the Scotsmen.
 This quick expansion was too much for the market such that the
market went into recession.
 Indian jute mill association was set up in the year 1884.
 But after a while the market caught up and started doing well and it
was profitable.
 The use of coal increased as it was the fuel which ran the jute and
cotton mills and even railways, so from 1860 the the coal demand and
coal mining also increased exponentially especially in the raniganj
area. EASTERN INDIA was the highlight for the coal mining in India.
 The tea industry also bounced back after the 1860 fiasco from the
1870s,
 Indians were mostly aloof in the eastern part from the growing
opportunities, and it was done by English or Scotsmen, which were
mainly (JUTE, COAL, COTTON, TEA)
 After a long time, a partnership of Rajendra Mookerjee and martin a
London based businessmen started a company called martin&co in the
year 1892. And soon Mookerjee took over once martin was dead.
 MOST prominent partnerships under British controls were BIRD &
CO. Sam bird the founder came to India in 1858 and started as a
labor contractor joined forces with his brother in 1864 and founded a
coal company and jute company and became the largest exporter of
Indian coal.
 Another such story was from the Scotsmen called Andrew yale who
started his firm in the year 1863 and went to own as many as 31
enterprises. And put a firm foothold in the 19th century.

NORTH, SOUTH, NORTH-WEST

 Everything was started by expatriates.

 Elgin mills in Kanpur was the first cotton mill set up in north India in
1861.
 Marwaris were dominant in the north and chettiers in the south in the
madras region.
 Thomas perry the welsh guy was the pioneer of industrialization in the
south region as he set up an indigo shop.
 After parry died William dare overtook the company and expanded
into coffee plantation in the year 1823 near the Mysore region.
 They expanded to sugar mills as well which played a crucial role, this
was done in the year 1842 and soon bone mill for manure production.
 Binny and co. was another such industrialist of the south and acquired
Indian steam navigation company in the year 1865, which was a
highlight of his company.
 The top 3 industrialists of the south were- THOMAS PERRY, BINNY
AND ARBUTHNOT.
 Binny’s best contribution was the introduction of a cotton mill to the
region in the year 1876.
 North-west was only known for its brewery set up by general dyer of
the Jallianwala bag.
 West and east were known for- cotton, jute, coal, and tea.
 South was known for – sugar, shipping, manufacturing, and
navigation.
 J.N TATA was the first mill owner to allow calculating the
depreciation costs.
 Stockbrokers’ association of Bombay was established in the year-1875
and Calcutta stock exchange in the year 1908.
 First bank to be launched in India was the Alexandria bank in the year
1770.
 All the presidencies had government-controlled banks which were
called the presidency banks, there were 4 private banks out of which
also the 3 were under British rule.
 The bank of Allahabad was founded in the year-1865.
 PNB was the only bank which was controlled by Indians- in the year
1894.

DEVELOPING AND IDENTITY -CHAPTER- 7

 The indo-british partnership was formed in the 1830-1840s but

recently as the industrialization era started, the Indian industrial
class was becoming increasingly more conscious about its own
identity.
 Certain events made them think so too
 Manchester’s growing hostility towards the Indian textile industry
was the first visible sign on the assault on the Indian sensitivities.
 All the import duties on textile duties were abolished in the year
1882, as in the factory act of 1892 they set up a ploy to snatch from
the competitive advantage. The 2nd sign was the imposition of
countervailing excise duty in the year 1894 on the production of
the textile goods in India to offset the duty on imports.
 Many Indian industrialists were openly against it like J.N. TATA
and ranchodlal but did not participate in the protests.
 As the industrial revolution came and the country was growing the
middle class started a sense of disillusionment from the crown
government and many Indian journalists pointed this out as-well
like dadabhai naroji, mahadev Govind ranade etc.
 They clearly mentioned that the crown government was exploiting
the Indian resources for their own benefit. All the Indians wanted
was to be treated equally with the British.
 The INDIAN NATIONAL CONGRESS was set up in the year
1885.and all the industrialists were in close contact with the party.
 Godrej is owned by a parse.
 The swadeshi spirit got stronger in – Delhi, Punjab region.
 Agriculture was still the primary job of these people.
 The importance of industrial revolution and modern industries for
the economic good was seen by everyone now.
 The establishment of PNB bank was the result of this swadeshi
movement in 1894.
 Harikishan lal was one of the very prominent owners of PNB and
started – BHARAT INSURANCE company and PEOPLES BANK
of India the first of their kind and he was also responsible for
generating industrial interest in the Punjabi households.

 The swadeshi movement was in simmer till 1905, but when lord
Curzon decided to divide the Bengal into east and west it
transformed into full- fledged protest movement.
 A call was taken by the Indians to boycott all foreign goods and
promote indigenous products.
 Experiments of 1840s killed the Bengali interests for business, but
the swadeshi movement revived it
 PRAFULLA CHANDRA RAY - set up Bengal chemicals and
started their own pharmaceutical company.
 TRIBUVANDAS KALYANDAS GAJJAR and A.S.
KOTIBHASKAR to form alembic chemicals which was one of the
 first 4 chemical plants established in India and first in the entire
west.
 LAXMAN RAO KIRLOSKAR- invented a better way to yield
plough. And later, set up the Kirloskar brothers.
 PAISA FUND GLASS works set up at Talegaon POONA in 1905.
 1899 IRKSOME archaic regulations were replaced by a new set of
granted rules.
 CHANDA district was a bust and later DURG district was set up as
the goal for iron production.
 Jamsedji TATA passed on the helm to darobji TATA and died in
the year 1904 in Germany.
 TISCO- TATA IRON AND STEEL COMPANY was finally
registered in the year 1907 and was situated in SAKSHI, a district
in BIHAR. Started production by 1911 and was the first steel firm
in India.

THE IMPACT OF THE SOUTH

 The swadeshi spirit in the south was manifested in the region by
establishing several banks.
 The south was mainly owned by the trio of binny, parry and
Arbuthnot. But 2 of the 3 failed by 1906.
 Sir JAMES LYKE head of BRITISH INDIA NAVIGATION
COMPANY took over the binny and co.
 Arbuthnot was sentenced to prison for 18 months for cheating.
 This made way for Indian. Banks. –
 INDIAN BANK- 1907
 New ventures like UNITED INDIA LIFE INSURANCE
COMPANY were floated by lingam brothers.
 PUNAJB AND SIND BANK- 1908.
 CENTRAL BANK OF INDIA- 1911
 BANK OF BARODA- 1908.
 After the steel plant, the TATAs wanted to venture into the
hydroelectric power supply, darobji registered the company by
1910 and was functional by 1915 as LORD SYDENHAM helped.

EFFETCS OF THE FIRST WORLD WAR

 The WAR was a very profitable time for the INDUSTRIAL

AND COMMERICAL SECTOR, but disastrous for BANKING
SECTOR.
 WAR disrupted imports and exports, so the price of the Indian
goods went up.
 Crown government which was skeptical for using TATs steel
had no other choice as the imports stopped and they developed a
great synergy together.
 To meet the power generation as the Indian companies were
supplying materials to both the government and for exports tata
hydroelectric plants had to expand and new players like
ANDHRA VALLEY POWER SUPPLY AND TATA POWER
COMPANY.
 TATA GROUP diversified into CEMENT PRODUCTION
established plant in PORABANDAR KATHIWAR and added
the 2nd one in BIHAR.
  TATA joined into many other sectors but little they knew about
these sectors.
 THE COTTON INDUSTRY benefited the most from the war as
much as 15-18 times more than pre-war.
 Greatest were the companies that catered to the domestic
demand of the cloth.
 LOSSES FOR THE CHINEESE MARKETS-1913.
 European industrialists like BIRD BROTHERS who were into
jute, coal and tea also made handsome profits but not in the tea
sector.
 BIRD BROTHERS acquired F.W. Heliers& co.
 THE BANKING SECTOR did not function well at all the RBI
HAD TO SET UP RULES FOR proper functioning in the year
1936.

MARWARI ENTRY INTO THE INDUSTRY

 A sizeable Marwari population had migrated everywhere, even to places

like Hyderabad, Poona, Nagpur etc.
 SARUPCHAND HUKUMCHAND was one of the first most prominent
Marwaris who made his money through opium, sugar and other trades
opened cotton mills at his headquarters NDORE in 1909 and 1914 and
later a JUTE MILL.
 Perfect pottery was formed by KHUSHALCHAND IN JABALPUR by
1905.
 Marwaris made their presence felt especially in the KOLKATTA region.
 Marwaris were the locals who helped the European industrialists and thus
were near all the new things happening.
 GHANSHYAMDAS BIRLAs family symbolized more than any other
family. From PILANI in RAJASTHAN they moved to Mumbai in 1857
looking for trade but eventually had to move to CALCUTTA because of
the plague.
 IN CALCUTTA they got associated with the firm TARACHAND
GHYANSYHAM DAS and later became the BANIAS for the ANDREW
YULE & CO.
 BIRLAS made a ton of fortune during the war, trading in jute, coal,
cotton etc.
 BIRLAS WERE THE FIRST TO OPEN A JUTE EXPORT OFFICE IN
LONDON IN THE YEAR 1917.
 GHYANSHYAMDAS then in the year 1916 marked the beginning of his
industrial carrier by buying a cotton mill in DELHI.
 Barely after 4 years BIRLAS set up a JUTE MILL IN COMPETITION
WITH THE EUROPEANS.
 There was a competition between BIRLAS AND HUKUMCHAND until
HUKUMCHAND sold all his mills to the BIRLAS in the year 1939.
 Other famous mar -wadis were-
 HARGOVIND DALMIA- COTTON MILL- 1921
 SINGHANIAS WHO WERE VERY PROMINENT IN KANPUR and
JUGGILAL their forerunner.
 JAIPURIA partnered with SHOBA SINGH – KHALSA MILLS – 1923.
 NANDAL FAMILY TEXTILE MILL INDORE- 1922.
 ANANDILAL PODAR in collab with JAPANEESE in the year 1924.
 CHAPTER-8 TOWARDS MATURITY

 THE CROWN government started placating a healthy relationship

towards Indian businesses, because they saw how useful they could get
during the WORLD WAR-1 phase.
 INDIAN INDUSTRIAL COMMISSION was set up to help Indian
interests, and the tariff protection to Indian industries.
 GOVERNMENT ACT OF 1919- to represent the native business
interests in the legislative councils.
 MAHATMA GANDHI entered the scene around 1915 and was fighting
for better rights and this drove a gulf between the native and the
expatriate business interests.
 THE INDIAN BUSINESSES WERE GROWING AT A FASTER RATE
THAN THE EXPATRIATE ONES post the WORLD WAR.
 INDIANS could not challenge BRITISH MONOPOLY in the sectors like
coal, tea, jute etc.

EXPANSION OF THE OLDER HOUSES

 AS TATAS opened a lot of companies and diversified a lot during

WW-1 a lot of them stopped generating profits after the war ended,
which either led to them selling it other people or closing the shop.
 TATA bank was merged with CBI.
 TATA CONSTRUCTION was acquired by WALCHAND
HIRACHAND.
 And the cement company became a part of ACC (associated cement
company) in the year 1936.
 After the war ended the British started importing steel again which
left TATAS in the cross-roads with overcapacity. It lost a lot of its
revenue overnight and was struggling to stay afloat.
 TATA management did 3 main things to stop the bleeding.
1. Borrowed 2 million pounds on the London market.
2. DORABJI put all his personal assets as collateral to get 100 lacs
loan from imperial bank of INDIA.
3. Management stepped up efforts to secure protection for the steel
company.

 1919 – finally a act was passed to impose duties on the imports,

thus protecting the TATA steel.
 TATAs had to sell 50% of their stake in the hydroelectric plant to a
firm American and foreign power in the year 1930. And was in joint
custody till 1951.
 J.R.D TATAs major contribution was to the civil aviation
department because there were no substantial air services in India
till 1932.
 AIR INDIA was started as the division of TATA and sons.
 TATA CHEMICALS reputed to be the biggest chemical works in
the country at the time of its birth in the year 1939.
 The location was MITHAPUR near DWARKA the seacoast in the
state of the maharaja.

TATA WITHOUT A DOUBT IS THE FIRST FAMILY OF

INDIAN BUSINESS-1930.
 BIRLAS-

BIRLAS were right after them and it was only because they
came into the industrial sector a little late who were considered
the cotton and jute Indian giants.
 1922-1930 was a confusing period for the Indian economic
environment. Major changes were the increase in cotton imports
from England and japan. And the abolition of the excise duty in
the year 1924.
 1932-CHANGE IN THE GOVERNMENT POLICY GRANTIG
TRAIFF PROTECTION TO INDIAN SUGAR INDUSTRY
encouraged BIRLAS to diversify once again.
 From 1929-1936 the sugar factories increased from 27-150 and
BIRLAS were the first to secure this position.
 They started with UP and western BIHAR where sugarcane was
grown in abundance.
 TOP THREE SUGAR PRODUCERS- BEGG SUTHERLAND,
GOKULCHAND NARANG AND BIRLAS.
 BIRLAS WENT AHEAD AND STARTED ORIENTAL
PAPER MILL COMPANY TO BREAK THE EUROPEAN
MONOPOLY in 1936.
 BIRLAS ANOTHER PROMINENT INITIATIVE WAS -
TEXMACO.
 BIRLAS was a patriot and had strong ties with everyone who
wanted to promote indigenous products.
WALCHAND HIRACHAND

 Gujrati Jain family.

 Started with shipping as a business.
 Scandia steam navigation company. -
 Suffered losses and came under James Lyle MacKay.
 By 1920s TATS sold off their construction company to WALCHAND
who renamed it to premier construction company.
 Opened a sugar mill – 1932, in Nashik district.
 Have a reputation of running the most efficient sugar mills in the country.

LAXMAN RAO KIRLOSKAR

 Factory owner – iron plough and shaft cutter.

 Kirloskar brothers into a public limited company 1920.
 1920s important were the diesel engine and centrifugal pump to
facilitate drawing off well for irrigation.
 Collaborated with DCM- Delhi cotton mills and even acquired a jay
engineering works.
 Diversified from textile to cotton to sugar and expanded to Calcutta
they were the firsts to include sewing machine in their portfolio
along with fans and pressure gauges.

MERCHANTS IN THE WEST WERE SKEPTICAL ABOUT

EXPANDING BEYOND THEIR HOME GROUND.
 Parekhs and sarabhai did not expand but still made good profits in their
home state.
 on the OTHER HAND LALBHAIS, WHO HAD A TOKEN
PRESSENCE IN AHMEDABAD INDUSTRIAL SCENE WENT
FOR MAJOR EXPANSION FROM 1929- 1931 JUST BEFORE
GREAT DEPRESSION TO EMERGE AS THE LARGEST GROUP
IN THE INDUSTRY IN THE MIDDLE PF THE DACADE.

 AHEMEDABAD WAS CALLED THE MANCHESTER OF INDIA.

 MAFATLAL was another exception who expanded from Gujarat to other
states too.
 The most distinguished casualty was the one and only MUSLIM group
CURRIMBHOY group who had almost 12 companies under them.
 MAFATLAL had contacts and ginnies in AFRICA, UGANDA.

NEW ENTRANT MAKING MONEY

 SINGHANIAS of Kanpur expanded and came into the textile and jute
sectors during war -1 years.
 JAMANLAL BAJAJ OF WARDHA and JEEVANLAL
MOTHICHAND of GUJARAT.
 RAMKRISHNA DALMIA a Marwari from ROHTAK PUNJAB, had
a lot of diversified companies under him called it the ROHTAS
INDUSTRIES.
 AMONG THE FIRST INDIANS TO MANUFACTURE PAPER.
PROMINENT CHANGES OCCURRED IN SOUTH INDIA TOOO

 CHETTIARS AND NAIDUS OF THE SOUTH WERE PROMINENT

NAMES DURING THE WAR YEARS.
 OTHER NAMES WERE R-SHEESASAYEE AND C. RAJAN IYER
who were also known for BRAHMINS ENTERING THE SCENE.

OTHER CHANGES -

 IN 1921 ALL THE 3 PRESIDENCY BANKS ALMALGAMATED

AND BECAME IMPERIAL BANK OF INDIA.
 RBI WAS ESTABLISHED IN 1934.
 PUROSHOTAM THAKURDAS WAS KNOWN AS THE COTTON
KING OF INDIA.
 GOENKA ENJOYED THE SAME POWERS IN THE EAST, WAS
A GROUP LEADER OF SMALL MARWARI COMMUNITY, WAS
IN SEVERAL BOARDS INCLUDING IMPERIAL BANK OF
INDIA, BECAME THE CHAIRMAN OF IMPERIAL BANK OF
INDIA IN 1933. FIRST INDIAN TO HOLD THIS POSITION AND
IN RESERVE BANK TOOO.
 ASSOCHAM – ASSOCIATION CHAMBERS OF COMMERCE
FOUNDED IN 1921 first pressure group who claim to represent the
Indian and the European businesses.
 FICC- federation of India chambers of commerce finally came into being
in the year 1927, showing the growth of the Indian native businesses.
CHAPTER-9 EXPATRIATS AND MULTINATIONALS

 TATAs were the largest of all BUSINESS GROUPS native and foreign.
 After the tatas it was E.D SASSOON who was after them in the cotton
textile manufacturing.
 BIRD AND HEILGERS were one of the most prominent of expatriate
firms and along with YULE and co. but just like the TATAs they opened
a lot of shops during the war to make profits but after war it all collapsed.
 JUTE, COAL AND PAPER were the most profitable avenues for
businesses.
 BIRD AND TATAS came together to defeat the other AMERICAN
competition.
 After the wars there were a lot of entry barriers in the Indian markets for
foreign traders or consider it stagnation period after much growth.
 ANDREW YULE MAIN BUSINESSES WERE- JUTE, COAL AND
TEA.
 INDIAN PAPER PULP COMPANY WAS SETUP IN 1919. TURNED
PUBLIC IN 1933.
 INDIAN INSURANCE COMPANY WAS ALSO SET UP YULE IN
1931.
 TOBACCO INDUSTRIAL LIMITED WAS SET UP IN 1931.
 NEW ENTRIES WERE – SHAW WALLACE AND DUNCAN
BROTHERS.
 WALLACE WAS KNOWN FOR THIS COAL BUSINESS AND THE
CHEMICAL BUSINESS-LIKE KEROSENE AND SULPHURIC ACID.
 DUCAN FOR HIS TEA BUSINESS.
 NORTH, WEST, AND SOUTH

 BEGG SUTHERLAND -PIONEER – TEXTILE AND SUGAR

INDUSTRY IN NORTH.
INDEPENDENCE – A NEW BUSINESS CLIMATE – CHAPTER – 11

▪ 15TH AUGUST 1947 India was partitioned into two countries namely
India and Pakistan.
▪ It was a loss of land and with that loss of some of the finest cotton
growing tracts and most of them jute growing areas and the loss of a few
manufacturing units set up in Lahore of BIRLAS AND BAJAJ, loss of a
business partner to the MAHINDRA AND MAHINDHRA.
▪ Modern industries made a considerable headway in investing India.
▪ But they were still dependent on the imported technology.
▪ NATIONAL PLANNING COMMITTEE (NPC) was formed in the year
1938 whose president was JAWAHARLAL NEHRU.
▪ Before independence a lot of the people were in the same political party
because of their combined interest of independence but once this became
a reality the members started having very polarizing views on how to run
the country. JLN wanted a assertive control over all the companies but
SARDAR VALLBHAI PATEL was a capitalist didn’t want the
businesses to be regulated beyond a point.
▪ The industry policy resolution of 1948 was the first major pronouncement
of the new government formed.
▪ The first 5-year plan was set for 1951-1956 which was in accordance with
the Bombay plan of 1944.
▪ A system of industrial licensing was the 2nd instrument devised by the
new government to achieve industrial policy.
▪ The main theme of the new government was to produce the local
businesses from the boost in imports, so they levied a lot of import taxes
and even the subsequent exports declined gradually.
▪ A new industrial policy was announced in the year 1956.
▪ Imperial bank of India got Indianized to STATE BANK OF INDIA.
▪ A new company law was enacted in the year 1956.
▪ A new rule stated that no managing company would have more than 10
companies under them.
▪ This new law came into effect from April 01/1960, this law stated that
you cannot own more than 10 companies, but you can be the treasurer for
them, so basically its harmless.
▪ Government tried to create credit facilities to help private sectors to run
their business smoothly
▪ Institutes like IFCI (INDUSTRIAL FINANCE CORPORATION OF
INDIA)
▪ NSIC- NATIONAL SMALL INDUSTRIES CORPORATION.
▪ ICICI-
▪ IDBI- INDUSTRIAL DEVELOPMENT BANK OF INDIA
▪ IRCI- INDUSTRIAL REFINANCE CORPORATION OF INDIA.

The government was leading for the first time and there were a lot of faulty
implementations which created loopholes and for a lot of corruption, but
they learned to be better over the years.

CHAPTER-12- BUSINESS IN THE NEHRU ERA

▪ People were a little unhappy of NEHRUs approach because putting a

limit on the native businesses after the independence did not make
sense to them.
 ▪ SWATANTTRA PARTY WAS FORMED BY RAJGOPALCHARI
THE FIRST INDIAN GOVERNOR OF THE FREE INDIA.
▪ NEHRU DEATH- 27TH MAY 1964.
▪ The coming 5 years after NEHRUs death were chaotic
▪ The bloody war with china left INDIA in chaos which started in the
year- 1962.
▪ War with PAKISTHAN started in no time.
▪ THERE was no rainfall for 3 years in succession.
▪ WHEAT PRODUCTION WAS KNOWN AS THE GREEN
REVOLUTION.
▪ INDIAN ECONOMIC SCENARIO WAS IN DISTRESS IN THE
1960s.
▪ NEHRUS successor was LAL BAHADUR SHASHTRI who could
not serve as the PM for more than 20 months, but the music was faced
by INDIRA GANDHI who was the daughter of NEHRU and she
failed to catch the trend in the first 2 years leading to an economic
CRIPPLE.
▪ TO GAIN THE SUPPORT INDIRA GANDHI NATIONALISED
THE BANKS ON 19TH JULY 1969.
▪ NATIONALISING THE BANKS WAS THE END OF NEHRU ERA.

NOW LET’S SEE HOW THE OLD ESTABLISHED HOUSES

PERFORMEND UNDER THE NEHURU ERA

▪ TATA iron and steel company TISCO never participated in the freedom
movements but was a close ally to the Indians, and after the world war it
 was impaired the the demand for product dropped substantially and the
Indian government and the foreign banks helped too.
▪ THE INDIAN GOVERNMENT HELPED TISCO IN GETTING
PERMITS AND THE LOAN OF 10CR WAS GRANTED TO TISCO
TO DOUBLE ITS PRODUCTION FROM 1 MILLION TONNES TO 2
AND THIS WAS LARGEST LOAN GIVEN OUT EVER TO AN
AISAN COUNTRY.
▪ TELCO WAS FORMED – automotive and engineering company to
produce railway cars but it was not allowed to produce passenger
vehicles, it tried collaborating with BENZ AG but the government did not
allow that.
▪ The TATA chemical company was gaining stability but was not allowed
to expand into fertilizer manufacturing. The government claimed that
TATAS were too big already to expand.
▪ THE AIRLINE INDUSTRY WAS RESERVED FOR PUBLIC SECTOR
WAS TATA were already in the advanced stage of production when this
bill passed so the government and the TATAS collared and started the
TATA AIR INDIA THE YEAR 1948.
▪ TATA COLLABORATED WITH JAMES FINLAY AND STARTED
TATA TEA IN 1963,
▪ TATA CONSULTANCY SERVICES WAS STARTED IN 1968.
▪ TATA CHEMICALS WAS ALLOWED TO OPEN THE FERTILIZER
PLANT IN THE YEAR 1967.
▪ BIRLAS

▪ Grew their business more than the tatas post-independence.

▪ One of the first producers of the cloth fabric RAYON.

 ▪ G.D BRILAS proposal to open a steel mill was not accepted and later he
had to open the aluminum plant which turned out to the biggest on in this
field. -HINDALCO in RENUKOOT UP in partnership with KAIZER
American company.

▪ DIGVIJAY WOLLEN MILLS WAS REGISTERED IN THE YEAR

1948.

▪ the most important ventures were the Hindustan motors and TEXMACO.

▪ the group grew exponentially post 1947, from 13 they almost acquired 31
companies

▪ Birla’s were amongst the first companies to expand globally because the
laws were not favorable, they expanded to Ethiopia, NIGERIA, KENYA,
MALAYSIA.

▪ THAPARS- acquired greaves.

▪ Trading in engineering products and engines.

▪ Acquired a paper mill from Ballarpur and opened a few sugar and
coal mills as well down the line.

▪ Almost had 50 companies under them. It became the 4th largest

business house in the NEHRU ERA.

MAFATLALS- lead by navinchand, acquired the sasson spinning and

weaving company, these guys were in the front row in textile
manufacturing companies.
 ▪ Allied to dyestuffs and soon to chemicals and petrochemicals around
1957.
▪ Resulted in the emergence of NOCIL AND PIL. Became the 3rd
largest business house of the country.

KIRLOSKAR BROTHERS.

▪ Started by Lakshman Rao Kirloskar and now the power being

shifted to S.L. KIRLOSKAR the eldest son.
▪ Pursued oil engines and marketed them in 14 different countries and
started producing combustion engines also.
▪ Merged with an American company and started a company called
Kirloskar cummings and similarly Kirloskar electrical company.

LALBHAIS AND WALCHANDS AND DALMIAS

▪ LALBHAIS had Atul products limited which but eventually

developed to become the most sophisticated dye producer of the
country.
▪ Walchand had to sell his shipping business, but he had other things
to hold on too which were more important and profitable like
premier automobiles, premier construction and they wanted to
maintain these and gain profits rather than diversifying.
▪ DALMIAS started great and acquired a lot of companies, but it fell
as soon as it rose because tax evasion problems and this was the first
company to face this, few of its famous accquisions were- BENETT
COLEMAN AND CO,
MARTIN AND BURN who was one of the most profitable business groups
also sold itself to the government because of labor issues in 1960, and it was
the 3rd largest group in the country.

New entrants were – BAJAJ, MAHINDRA, SINGHANIAS, BANJURS and

GODREJS.

BAJAJ – set itself up as an automobile and electrical company mainly

producing supplies also had Mukund steel company under them.

MAHINDRA- took their first franchise of jeeps from the American willy
overland company but later started assembling them and became the
market leader in a decade. Also went ahead and acquired a British house
called turner and co.

BANGUR WAS A MAJOR PLAYER – came into the picture only after
world war-2, made its fortune there and acquired a lot of mills and
expanded.

GODREJS – making toilet paper soap and security equipment before they
diversified into office equipment’s like furniture.

SINGHANIAS – stepped out of Kanpur and acquired new mills from

Sassoon’s and others and became a national character by the NEHRU
ERA.

Others who emerged strong during this time were – GOENKAS

(MARWARDI FAMILY), KALYANIS, KHAITANS.
AND 3 FAMILIES FROM GOA- CHOWGULES, SALAGONKAS,
DEMPOS.

OTHER people who just started were AMBANIS, MAPPILLAI OF MRF

TYRES and BRIJ MOHAL LAL OF HERO and RAUNAQ SINGH of
APOLLO TYRES.

THE GOENKAS- RAJASTHANI TRADRS SHIFTED TO CALCUTTA AND

WERE THE OPERATING BANIAS FOR THE EUROPEAN AGENCY
HOUSES LIKE DUNCAN BROTHERS, AND OTHERS WHO WERE THE
MOST IMPORTANT AT THAT TIME

THE GOENKAS OPENLY CHALLENGED THE BIRLAS ALTHOUGH

THEY WERE NEVER IN THE INDUSTRIAL PART FORMALLY.

THE GOENKAS INDUSTRIAL JOURNEY BEGAN UNDER KESHAV

PRASAD THE SON OF BADRIDAS GOENKA. THEIR FIRST
ACCQUISION WAS OCTAVIA STEEL, SUGAR MILLS AND
COLLIERIES.

AFTER INDEPENDENCE THE EUROPEAN AGENCIES THOUGHT OF

WITHDRAWING AND SOLD THEIR ASSETS TO THE GOENKAS
SOMEWHERE AROUND 1963.

KESHAV PRASAD ACCQUIRED 3- 4 MAJOR COMPANIES DURING

1966-1969 COTTON AND ELECTRIC CABLE PRODUCTION
COMPANY.ALSO SHOWED INTEREST IN BALMER LAWRIE AN
EXPATRIATE FIRM.
KHAITANS- STARTED AS SUPPLIER OF PLYWOOD AND PACKING
CRATES TO THE TEA PLANTATION AND THIS WAS STARTED BY
BRIJ MOHAN LAL AND SOON HE BECAME THE MD OF THE TEA
PLANTATION POST 1950 AS THE EUROPEAN FRIM RICHARD
MORGON WAS LOSING CONTROL AND THEN GAVE UP THE
COMPANY TO BRIJ MOHAN AND THEN EVENTUALLY HE ENDED UP
BEING THE BIGGEST INDIVIDUAL TEA PLANTER IN THE WORLD.

THE RUIAS FROM-MADRAS STARTED OFF BY NAND KISHORE RUIA

THEY WERE IMPORTING TRUCKS AND EXPORTING GROUNDNUT
OIL AND COTTON FROM MADRAS TO BOMBAY.MADRAS BEING
THE HEADQUATERS.

THE GOA BASED 3 FAMILIES BECAME A SINGLE ENTITY AND

WORKING TOGETHER AFTER THE PORTUGEESE LEFT IN THE YEAR
1962. AND THESE 3 FAMILIES WERE CONROLLED BY A
MAHARASHTRIAN BRAHMIN FAMILY.

KALYANI GROUP- FOUNDED BY MAHARASHTRIAN BRAHMIN

FAMILY, TRADER IN TURMERIC AND GROUNDNUT, SET UP BHARAT
FORGE WITH FINANCIAL HELP FROM ICICI IN 1964.

DHIRUBHAI HIRACHAND AMBANI- FROM GUJARAT, GAS FILLER

IN THE ANDEN STATION, STARTED BUSINESS CARRER IN 1958, SET
UP RELIANCE COMMERICIAL CORPORATION IN BOMBAY WHICH
EXPORTED- CASHEWNUTS, PEPPER, NYLON, RAYON. EARNED A
LOT OF PROFITS CUZ NO ONE PRODUCED NYLON IN INDIA, SET UP
RELIANCE TEXTILES IN 1966 IN AHMEDABAD.
MAMMEN MAPPILLAI AND RAUNAQ SINGH FOUNDERS OF MRF
AND APOLLO TYRES- STARTED BUSINESS IN 1939, AND FROM 1961
CAME INTO TYRE MANUFACTURING, RAUNAQ SINGH BEING A
REFUGEE FROM PAKISTAN GOT LOAN FROM PNB.

DRUG MANUFACTURING- BHAI MOHAN SINGH(REFUGEE),

UTTAMBHAI MEHTA, RAMBHAI PATEL OF CADILA.

BHAI MOHAN LAL SINGH WAS IN BED WITH ITALIAN DRUG

MANUFACTURER LEPETIT WHICH WENT BANKRUPT, AND HE
BOUGHT THE COMPANY THEN DIVERSIFIED INTO HEALTH CARE
BY SETTING UP MAXX INDIA. - RANBAXY WAS THEIR COMPANY.

UTTAMBHAI MEHTA- LAUNCHED TORRENT IN 1969.

OTHER STEEL PRODUCERS WERE – JINDAL, MITTAL, RAI.

STEEL ROLLING MILL USING JAPANEESE TECH WAS SET UP IN

SOUTH INDIA IN THE YEAR 1956, ONE OF ITS KIND.

MITTALS FIRST BUSINESS WAS AN OIL MILL IN KANPUR.

SPIC, MAC, ESCORTS, TVS, HERO, AND AMALGAMATION

STARTED PRODUCING POWER DRIVEN 2 WHEELERS FOR THE
LESS AFFULENT SECTIONS OF THE SOCIETY.
LAMBRETTA WAS STARTED – POINEER OF ITS KIND BUT
SUCCUMBED TO THE COMPETITION BY BAJAJ.

CHINDAMBARAM MOVED OUT OF THIS DEAL AND SET UP A

FERTILIZER PLANT IN TUTICORIN IN TAMIL NADU.

ESCORTS- HARI PRASAD NANDA- 1944- ELECTRICAL APPLIANCES

AND THEN CARS.

TVS- IYENGAR SUNDARAM.

AMALGAMATION – WAS ALSO CONTROLLED BY TAMIL
BRAHMINS.

HERO- BRIJ MOHAN LAL A REFUGEE SET UP CYCLE SHOP IN

LUDHIANA AND LATER IN 1956.

OTHER COMPANIES LIKE AVON AND ALTAS WERE ALSO

REFUGEE COMPANIES.
BRILAS ALSO HAD THEIR HIND CYCLES.

HERO GROUP BY 1969 CAME OUT ON THE TOP FOR CYCLES.

VITTAL MALLAYA WHO WAS A STOCKBROKER BOUGH UNITED

BREWRIES AND BOUGHT THE CONTROLLING SHARES OF THE
COMPANY AND SET UP NEW BREWERIES POST INDEPENDENCE.

OBEROI- STARTED BY MOHAN SIGH OBERI, FIRST HOTEL WAS IN

CALCUTTA, EARNED HUGE PROFITS DURING WW-2 AND
EXPANDED GLOBALY.
PUBLIC SECTOR- DURING THE NEHRU ERA THE PRIVATE SECTOR
WAS NOT HAPPY WITH TOO MANY RESTRICTIONS ON THEM AND
THE FAVOURISIM TO THE PUBLIC SECTOR BUT THIS WAS DONE IN
ORDER TO HELP THE COUNTRY BUILD AND DEVELOP RATHER
THAN JUST HELPING PRIVATE SECTOR.

EXPATRIATES AND MULTINATIONALS – ALL THE EXPATRIATE

AGENICES FOLDED AND LEFT SOON AFTER INDEPENDENCE OR
SELLING OFF THEIR COMPANIES TO THEIR OPERATIONAL BANIAS,
FEW FIRMS LIKE ANDREW YULE, BIRD, AND IN THE SOUTH PARRY
AND BINNY THOUGHT COULD SUSTAIN BUT THAT DID NOT
HAPPEN, THE GOVERNMENT MOSTLY TOOK ALL OF THEM UNDER
BY 1976, A DISASTUROUS FLOOD IN MADRAS EVEN DESTROYED
THE FACTORIES WHICH LET THE BINNY GROUP TO FOLD BY 1980.

ASSAM UNDERTAKING COMPANY SUSTAINED TILL- 1991, TAKEN

OVER BY THE MEHTA GROUP.

AS THE EXPATRIATES WERE FOLDING IT HAD ONE EXCEPTION

THO, THE L&T COMPANY, WHICH WAS STARTES BY THE 2 DANISH
BROTHERS,

HILDA LIMITED REGISTERED ITSELF IN 1943. THE BUSINESS OF

HILDA WAS TO REPAIR SHIPS, AND THE PARTNERSHIP BETWEEN
HILDA AND L&T IN 1946 TO THE IMPORT AND EXPORT OF CAPITAL
GOODS IN 1946.
IN 1958 GOI CANCELLED A LOT OF IMPORT LICENSES TO HELP SET
UP MANUFACTURING SECTORS IN INDIA, COMPANIES LIKE
UNILIVER AND ITC SET UP SHOP AND EVEN CHANGED THEIR
WHICH RESONATED WITH THE INDIAN COUNTERPARTS.

UNILIVER INDIA-1956- PRAKASH TANDON-1964.

THE 3 OIL COMPANIES SET UP IN INDIA WERE – SHELL,

BURMAH, STANDARD VACCUM AND CALTEX.

THE SOVIET GOVERNMENT HELPED INDIA IN SETTING UP THEIR

CRUDE OIL REFINIERS IN THE 1960S.
CHAPTER-10 DURING THE WAR AND AFTER

▪ THE TOP 5 INDIAN BUSINESSMEN WERE

1. TATAS

2. BIRLAS

3. WALCHAND HIRACHAND

4. KIRLOSKAR BROTHERS.

▪ During the world war-1 the import and export network was disrupted
and the demand for indigenous products increased a lot because of it.
▪ This naturally pushed the prices of the products and the Indian
businessmen started making good profits.
▪ To ensure the maximum production the British government started
offering a series of incentives to the manufacturers and invoked the
famous DEFENCE OF INDIA RULES TO BAN STRIKES AND LOCKDOWNS.
▪ SEVERAL PROVISIONS OF THE FACTORIES ACT WERE RELAXED AND
UNHINDERED SUPPLY OF RAW MATERIALS.

On the eve of the World War 1 there were 3 categories of businessmen

1- Indian businessmen who dominated the customer good segment in the
Indian business.
2- The expatriate firms whose business was mainly dependent on the
imports and exports of commodities like JUTE, COAL AND TEA.
3- Subsidiaries of the multinational firms that focused on what may be
called the new industries such as chemicals, engineering, and stores.

▪ TATA was a commanding amongst all business groups during World

War 1.
▪ TATAS HAD – STEEL COMPANY, COTTON MILLS, OIL MILL, CHEMICAL
COMPANY, AND AN AIRLINE.
▪ INDIAS textile industry boosted a lot during these times,
approximately 400% and all the countries who were exporting from
japan and other countries turned to INDIA NOW.
▪ TATA set up their RESEARCH AND CONTROL LAB in 1937, which was
the first case of an INDIAN BUSINESS GROUP.
▪ TATA was famous for 2 types of STEEL production- TISCROM (High
tensile alloy steel)- used to make the HOWRAAH BRIDGE IN
KOLKATTA (KOMALZ, ARPITA- FUN FACT).
▪ TISCOR- COROSSION RESISTANT EXTRA LONG STEEL USED IN THE
INDIAN RAILWAYS.
▪ KNOWN FOR BUILDING An ARMOURED CAR- TATANAGAR.
▪ TATA LOCOMOTIVE AND ENGINEERING COMPANY- POST WORLD
WAR 2 LAUCNHED IN 1945.
 BIRLAS

▪ PROSPERED MORE THAN TATAS DURING THE WARS, 2ND LARGEST

BUSINESSHOUSE IN INDIA.
▪ KNOWN FOR BUSINESS IN SUGAR, PAPER AND JUTE, PAPER AND
SUGAR INDUSTRY DOMINATED DURING THE WARS.
▪ BIRLAS NET WORTH WHEN UP BY 6 TIMES FROM 1939-1945.
▪ BIRLAS ACCQUIRED SWADESHI MILLS IN 1944 AT AHMEDABAD.
▪ STARTED NEW FLOTATIONS LIKE- INSURANCE COMPANY, A CYCLE
MANUFACTURING CONCERN IN -1940.
▪ UNITED COMMERCIAL BANK – 1943.
▪ CIMMCO- CENTRAL INDIA MACHINERY MANUFACTURING SET UP IN
GWALIOR IN 1945.
▪ HINDUSTAN MOTORS STARTED IN 1942- ASSEMBLY PLANT-
BARODA- IN COLLAB WITH MORRIS MOTORS FROM THE UK- FIRST
VEHICLE LAUNCHED IN 1950- BRAND NAME-HINDUSTAN.

WALLCHAND HIRCHAND

▪ WAS INTO SHIPBUILDING AND PASSENGER CARS.

▪ SCINDIA SHIPYARD WAS LAID OUT BY THE THEN PRESIDENT – RAJENDRA
PRASAD.
▪ COLLABORATION WITH – DHARMSEY MULRAJ KHATAU AND TULSIDAS
KIRLACHAND, PROMINENT COTTON TRADERS IN THE CITY.
▪ STARTED PREMIER AUTOMOBILES IN THE YEAR 1944, ACCQUIRED
COOPER ENGINEERING LIMITED IN 1932 AND BOMBAY CYCLE MOTOR
AGENCY FOR HELPING PRODUCE INTERNAL COMBUSTION ENGINES, SET
UP SHOP IN – BOMBAY.
▪ TOOK UP AIRCRAFT MANUFACTURING RANDOMLY AFTER TALKING TO
AN AMERICAN AIRLINES COMPANY HEAD, NAME UNKNOWN.
▪ SET UP LAND IN MYSORE – HINDUSTAN AIRCRAFT COMPANY- 1940. AND
PRODUCTION STARTED BY -1941.
▪ AS THE 2ND WORLD WAR WAS GOING ON DURING THAT TIME, THERE
WAS AN OPINION THAT JAPAN MIGHT COME INTO INDIA AND HIGHJACK
THE COMPANY SO THE BRITISH GOVERNMENT TOOK OVER THE
COMPANYS PRODUCTION UNDER WAR POWERS, AND THOUGH IF THE
JAPANEESE FORCES CAME INSIDE, THEY WOULD DESTROY THE PLANT.
(SAD SHIT).
▪ SHIPYARD COMPLETED- 1946, FIRST CAR LAUNCEHD- 1947 IN COLLAB
WITH CHRYSTER USA.
▪ BRITISH GOVERNMENT ASKED THE COMPNAY TO SURRENDER TO 9
SHIPS TO HELP FOR THE WAR, THE COMPANY ALSO STARTED BUILDING
VESSELS IN VIZAG – 1943.
▪ APART FROM ALL THIS WALLCHAND AND HIS BROTHERS HAD
SEPARATE BUSINESSES LIKE THE COOKING OIL, VEGETABLE OIL UNDER
THE BRAND NAMED WALDA, VANASPATI BRAND OF THEIR FAMILY
WAS PRODUCING SOAPS AND TIN CONTAINERS.
 KIRLOASKAR BROTHERS.

▪ IRON CASTS PRODUCTION FOR GRENADES.

▪ HAD A PLANT IN MYSORE ON THE BANK OF THE RIVER
TUNGABHADRA SET UP IN 1941.
▪ AGRICULTURAL MANUFACTURING WAS TOP PRIORITY FOR THE
FAMILY.
▪ STARTED 2 COMPANIES – ELECTRIC COMPANY AND THE OIL
COMPANY.
▪ ELECTRICAL COMPANY IN 1946, WAS THE FIRST FIRM TO
MANUFACTURE ELECTRIC MOTORS IN INDIA.
▪ OIL ENGININE WAS SET UP IN POONA.
▪ ONLY 2 OTHER COMPANIES WERE PRODUCING ENGINES- OREINT
ENGINEERING IN PUNJAB AND WALCHAND COOPER ENGINEERING AT
SATARA NEAR BOMBAY.

▪ DCM- founded by LAL SHRI RAM.

▪ PRODUCTION OF COARSETS AND YARN AND CLOTH.
▪ DCM ADDED A CHEMICAL DIVISION – 1941.

OTHER GROUPS AND COMPANIES-

▪ SINGHANIAS- DEVELOPED INTO A HUGE ORGANISATION DURING WAR.

▪ ACCQUIRED NATIONAL INSURANCE COMPANY AT CALCUTTA AND
HINDUSTAN COMMERICAL BANK AT BOMBAY NO LONGER CONFINED TO
KANPUR.
▪ MODI- TOILET SOAP – 1940 AND WASHING SOAP.
▪ COTTONSEED AND GROUND NUT OIL.
▪ MODI SPINNING AND WEAVING COMPANY WAS THE BIGGEST MODI
ENTERPRISE.
▪ THAPARS – JUTE, PAPER AND COAL BEFORE THE WAR, JAGJIT TEXTILE
MILLS.
▪ DALMIAS – SET UP CEMENT PLANTS AND FLOATED BHARAT BANK AND
BHARAT AIRWAYS IN 1943 AND 1946.
▪ ALEMBIC CHEMICALS – INDIAN LIQUOR IN 1942.ALSO STARTED MAKING
BOTTLES AND ENGINEERING TOOLS, AND VEGETABLE OIL TOO.
▪ SHEESASAYEES MADE THE MOST SPECTACULAR PROGRESS IN WW2
THEY HAD THEIR OWN ELECTRICAL COMPANY AND FROM 1930-1940S IT
EXPANDED FROM URBAN TO RURAL AREAS TOOO.
▪ SOUTH MADRAS ELECTRIC COMPANY WAS THE NAME OF THEIR
COMPANY.
▪ METTUR CHEMICAL – HYDROELECTRICITY PLANT IN THE SOUTH.
▪ FERTILIZER COMPANY IN TRAVENCORE, KOCHI.
▪ THEY HAD SMALL SHARES IN THEIR BUSINESSES
▪ ACC WAS CREATED BY 4 COMPANIES.
▪ BANGURS- RAJASTHAN- TRADER, PROPERTY DEALER AND SHARE
BROKER, CAME INTO TEXTILES-1934.
▪ SOMANYS- MARWADI- TEXTILE AND CEMENT
▪ BALDEO SINGH- FIRST DEFENCE MINISTER OF INDIA.
▪
▪