Rejuvenating India’s manufacturing base, and the jobs it creates, is a twenty-first-century government priority: a concern the nineteenth-century owner of the mill would have shared. Jamsetji Nusserwanji Tata created one of India’s greatest industrial houses, and showcased an entrepreneurial art in short supply lately: the ability to balance short-term, private interests with a farsighted sense of public purpose. His story is also something of an anomaly for its times, expressing an unusually global ambition for India’s economic growth.
Tata was a contemporary of robber barons such as John D. Rockefeller and Andrew Carnegie, and as with these Americans, the origins of his wealth weren’t pristine: he was an opium trader and profiteer of British imperialism in Africa. Yet animated by a faith in free trade and Indian capability, he went on to do more than play a central role in establishing the country’s industrial base. He also helped sustain it by creating institutions to produce a better-educated professional, managerial, and scientific class.
Born in 1839 into a Parsi family in the small town of Navsari, Gujarat, Tata grew into a short, sturdy man who dressed in the Parsi style, with a white frock coat and turban-like hat. An American engineer later recalled that this strangely dressed fellow with a deep voice appeared one day at his New York office and asked him to help build a steel plant in an Indian jungle. The dubious engineer found himself agreeing, explaining, “You don’t know what character and force radiated from Tata’s face.”
But the real source of his power lay in his entrepreneurialism, not his aura. Although he sought lessons for India in the rapid rise of America, Germany, and Japan, he was operating in a colonized country where markets were controlled to serve the interests of the British, and where there was little access to investment capital or technology. He couldn’t hope to emulate the path of Western national economies, and he had to be immensely creative in navigating the great global financial crises of his time.
“India was a conquered nation,” the Harvard historian Emma Rothschild observes, “and the British, believing in freedom and democratic government and free enterprise in the abstract, did not believe in all those things in the particular in India. Yet Tata and his associates were able to get outside that iron constraint of British rule.” In her view, the Tata story is more modern than the iconic legends of American or European titans, because it was global from the very beginning.
“Make the world England” was a popular slogan at the height of the British Empire. Today, the companies that sprang from Jamsetji’s first concern have made the world more Indian. In 2014 the annual revenue of Tata companies (derived from businesses ranging from power generation and real estate to hotels and information technology) was equal to more than 5 percent of India’s GDP. Those great brands of British mechanics, Jaguar and Land Rover, are Tata-controlled, as are Tetley Tea and, until recently, the company that was once British Steel.
While the Tata group’s archives are an invaluable resource for the history of modern Indian economic life, most of Jamsetji’s papers were destroyed by his son Dorabji, for reasons unknown. So we’re left to judge Tata mainly by how he was seen by others, and by what he did. We can trace his shift from private interest toward nation-building concerns by following the names of his mills. A factory in Nagpur, opened in 1877, was named Empress Mills in homage to Victoria, but nearly a decade later, when he set up a more sophisticated mill—now the carcass at Bandra Kurla Complex—he named it Swadeshi, which means, essentially, “self-made.” Swadeshi was then a fresh term in Indian public life: two decades later, it would become a battle cry against the British in Bengal and, from the 1920s, the banner for Mohandas Gandhi’s mass movement (38). But in Tata’s own time, when independence from Britain seemed not just impossible but imprudent, the mill’s name was a gesture in what we might call the era of corporate protonationalism: a moderate challenge to empire waged by an impatient and entitled elite that the empire itself had created.
* * *
Every colonial power requires the aid of a favored tribe to help administer its outposts. The Spanish in Mexico had the Tlaxcalans; the Dutch in Indonesia had their Pijaji; and the Raj, in western India, had the light-skinned and often anglicized Parsis. Reputed for their honesty and business sense, Parsis received government jobs and commissions greatly disproportionate to their number. Tata’s father, Nusserwanji Tata, was one of the beneficiaries.
Nusserwanji was quick to see economic opportunities in the military and trading needs of the far-flung British Empire. He left his home in Gujarat, and the family’s priestly profession, for Bombay, where he set up a trading agency with another merchant and won a lucrative military contract from the British during the Anglo-Persian War of 1856–57. He invested the profits in a new trading partnership, and when Jamsetji, his only son, finished his college education, he was put to work for it—in China.
Unlike caste Hindus, Parsis didn’t see traveling abroad as a pollutant. This gave them considerable advantages in trade. Tata’s immediate task was to ship opium and cotton to Hong Kong and Shanghai and to send back tea, silk, camphor, and gold—a well-worn profit loop in the imperial economy. Yet as he learned the exigencies of running an Indian business under colonial control, he was also receiving a crash course in world economics.
Not long after his arrival in China, the outbreak, in 1861, of civil war in America radically transformed economic opportunities in western India—for the better, at first. Southern cotton farmers having taken up arms, British mill owners had nothing to weave with, and global cotton prices rose; Indians quickly stepped in to cover the shortfall. By 1862, India was supplying the vast majority of the cotton used by Britain and France, and Tata’s business partner, Premchand Roychand, set up a bank to deposit all the bullion flowing into Bombay.
In the early years of colonization, the East India Company had allowed Indian industries, among them textiles, to stagnate; in a scathing critique of the 1780s, the conservative British politician Edmund Burke accused company officials of ruining India’s economy and society. Yet during the cotton boom, British mill owners were benefiting, so government policy was inclined to help Indians produce more cotton, and the British took what looked, retrospectively, like a benign disinterest in Indian profits.
Neither the disinterest nor the boom was to last. In 1865, not long after Tata moved to London to manage the firm’s cotton business and open a branch of Roychand’s new bank, the Confederates in the U.S. Civil War were defeated. Ships laden with American cotton soon resumed their transatlantic routes. A Boston merchant working in Bombay described the local reaction: “I am sorry to say such long faces I never saw on any set of mortals as the English & Parsees put on here. Our success at home is their ruination.”
The bursting of the Indian cotton bubble left Tata in London with so many worthless bills of credit that he had to liquidate his own company. Returning to Bombay, he found his father had sold the family home to pay off more debts. But as many of their counterparts were ruined, old British military connections gave the Tatas a third chance to capitalize on other countries’ conflicts.
In 1867, the negus, or ruler, of Abyssinia imprisoned a handful of British subjects, at which the British sent a force (of, staggeringly, sixteen thousand men) to free them. The commander in chief at Bombay led the expedition, and Tata was among the contractors who received handsome orders to supply it. The incursion ultimately caused a British scandal for costing taxpayers more than ten million pounds. Yet Tata was left sufficiently flush that, instead of just trading cotton, he was able to expand into yarn and cloth. He felt that manufacturing at home might help protect his company from future fluctuations in the international market, and in that thinking he wasn’t alone. Indians were setting up cotton mills across western India, hoping to profit from the cotton glut that followed the end of the American Civil War. But Tata would set himself apart by dint of his early adoption of international technology.
A habitué of the Great Exhibitions of the nineteenth century,
Tata was obsessed with innovation. His home had an electric piano, a cinematograph, and other nineteenth-century technological toys. His carriage was one of the first in India to have rubber tires, amazing bystanders as it rolled silently by. He introduced refrigeration to Bombay and tried to build a business shipping mangoes in cold storage to Britain. And he obsessively upgraded his mills.
He visited England to learn the fine points of spinning technology, then traveled to Egypt to master the cultivation of higher-quality cotton. Just as cannily, while his contemporaries relied on family members to run their operations and purchased labor at the cheapest rates, Tata recruited professional managers and sought to maintain a reasonably contented workforce. His prize mill, Swadeshi, was so poorly designed and managed when he acquired it that he had seizures while trying to fix it. Yet after turning it around with new spindle technology and new managers (some of them Westerners), he became the first mill owner in India to institute a pension fund for his employees. A grain depot, a medical dispensary, and a nursery for the infants of women workers soon followed—an early sketch, perhaps, of the model city that his son would later build around the Tata steel plant at Jamshedpur, in central India. The prompt for these benefits wasn’t softhearted generosity. As Tata had learned when traveling abroad, the extras gave skilled workers incentive to stay.
Tata was as much an opportunist as many of today’s entrepreneurs are. If you had money, he’d sidle up to you for financing. He raised funds for his enterprises in France and in French India, and from India’s princes; he acquired partners in Switzerland and America. Yet a harsher British imperialism would soon clip his sails.
* * *
By the 1870s, the Raj had begun to put the screws on manufacturers in the colonies, particularly in the cotton industry that had helped it through the American Civil War. Competition was the issue. As Tata and other manufacturers increased exports by penetrating the Chinese market, the mills in Lancashire and Manchester began to suffer, and to protect them, in 1878 the British government imposed higher import and excise duties on Indian-made textiles. This increase came during a fraught decade for India: an era of famines and of periodic riots by cultivators in the western part of the Empire. A reaction was inevitable, but it came about gradually.
Tata was, in many ways, an Anglophile; Gladstone was one of his heroes. But he’d also experienced the less attractive side of British rule. In 1863 he had attended a celebration in Bombay to mark the occasion of the Prince of Wales’s marriage; when a British official helped himself to a chair being used by the Tata party, Tata’s objections landed him in the city jail. That may have been a mere social slight, but now, in middle age, he was not alone among India’s elites in feeling harassed in business and seeing the point of organizing some resistance. Tata’s friend and fellow Parsi, the liberal free trader Dadabhai Naoroji, had already begun publishing what would become an influential polemic, based on compendious statistical tabulations: England’s policies were draining the Indian economy dry at a time when it needed active support to develop its long-term value.
At the end of 1885, Tata joined seventy-two mostly wealthy men (primarily lawyers and businessmen) in Bombay, at the first annual meeting of the Indian National Congress. Alongside Parsis such as Tata there was another group that had benefited from British policies and patronage: the English-educated Brahmins and upper castes. They now populated a restless professional class impatient with the status quo and eager to translate their education into jobs with rank and earnings. In time, the Congress would become Gandhi’s mass movement, and then the political party that would dominate the government of independent India for decades. But the first order of business was to push for greater representation in the Raj’s administration and legislative councils, in order to secure more equal rights and more government jobs.
Much as his admirers might like to slip Tata into the mainstream of this early political struggle for more self-rule, he’s decidedly peripheral in the extant firsthand accounts of the Congress. There is no evidence that he made any intellectual contribution, though a donation of five hundred rupees was recorded. Tata’s was a different, non-Brahminical strain of early nationalism. It wasn’t rights-based; it was focused on skills and essentially practical. He saw a need to expand the range of Indian talent, broadening education and, to some extent, those to whom it was available. It’s a strand of Indian nationalism that’s often overlooked, if nationalism is viewed purely in cultural and political terms.
In 1892, Tata launched a scheme to send young men to train abroad as future administrators, scientists, doctors, lawyers, and engineers. It’s possible that he took to heart his friend Naoroji’s argument that the drain on India was moral as well as economic: British Indian officials retired to Britain, taking their professional skills back home, as well as their wealth. In time, Tata scholars would number around a fifth of all Indians in the Indian Civil Service.
A grander initiative was reflective of his sense that America, Germany, and Japan were growing on the strength of scientific research. With the progressive ruler of the princely state of Mysore (see 33, Visvesvaraya), he created an endowment to establish in Bangalore the Indian Institute of Science (IISc). Although Tata sent his elder son to Cambridge, in planning his own institute he showed himself to be unimpressed by the privileged gentility of Oxbridge: the models that mattered were modern research universities such as Johns Hopkins. After his death, the IISc would become a pioneer of Indian scientific research and inspire the creation of other institutions (including more Tata-supported ones). Without those institutions, software India, and for that matter, nuclear India, might not yet have emerged. It’s as if Tata had been standing on a parallel site to the abandoned mill by Mumbai’s Bandra Kurla Complex, considering a hollow in the economy of his own era, and marshaling the resources to fix it.
* * *
A fascinating aspect of Tata’s story, Emma Rothschild points out, is how many failures he was able to absorb. The most politically combative that Tata ever became was in the 1890s, when the British added to their profits by exploiting a shipping monopoly over freighting Indian goods. He sought to break the rate-gouging, and even tried to set up his own shipping line. The British ensured that it failed, though they had to make a few concessions to Tata’s cause.
This late-life provocation may be why, as many Indian business and social eminences routinely received royal knighthoods or baronetcies, Tata was bypassed. You could see it as a particularly delicious, and high-minded, form of revenge that Jamsetji’s son, continuing his father’s enthusiasm for research, was to help fund studies on British poverty and social welfare at the London School of Economics, an act of what Rothschild calls “reverse imperial generosity.”
Tata’s last major obsession was a dream of steel. This would also be a failure, but only in the short term. During a visit to England, he had been convinced by the historian and social critic Thomas Carlyle’s argument that developing an iron industry was the straightest path to national wealth. In India, though, little was known about where iron deposits might be, mining licenses were controlled by the British, and investment capital was hard to come by. Still, Tata toured the mining and steelmaking centers of the United States, recruiting their engineers and technology to scout central India for ore. His son would later hit upon a major lode, steering the Tata companies away from cotton and toward steel and hydroelectric power, resources that would be essential to India’s development.
Jamsetji’s final project, though, opened just before his death in 1904: the luxurious Taj Mahal Palace hotel in Bombay, named after the most iconic building in India and now a brand that stands for Indian luxury. During the Mumbai terrorist attacks of November 2008, when Pakistani jihadists roamed the corridors and lobbies, shooting guests and staff, they still took time to marvel at the opulence before they began to burn it down. But even in old age, Jamsetji was less interested in splendor than in technological firsts: the Taj was the first hotel in India to have elevators
and electric lights.
* * *
Of the institution-building that represented Tata’s great philanthropic legacy in India, he once wrote, “What advances a nation or community is not so much to prop up its weakest and most helpless members as to lift up the best and the most gifted so as to make them of the greatest service to the country.” This marks one of the limits of his developmental imagination. Preference for the gifted over the average, already ingrained in Indian society, would become a trait of government policy, continued to this day. Its consequences—among them primary schools whose poor quality has been a consistent feature of modern India—have shackled India’s development and kept its benefits firmly within privileged enclaves.
Tata did, though, rightly see that successful business depends on what people nowadays call an “ecosystem”: to provide trained professionals, to generate new ideas and research, to ensure that the entire chain of production is created, and to develop the workforce, the human capital. He recognized that as long as India was ruled by a colonial state, bent on stifling any Indian industry that might compete with British interests, Indian industrialists could not just content themselves with being sharp arbitrageurs. They had to create their own institutions to succeed. Gandhi once said of Tata that he “never looked to self-interest.” Gandhi was wrong about that. Yet at some moments, rare historical sweet spots, private business interest, and public purpose do align.
Four decades after Tata’s death, another industrialist family, the Birlas, provided the compound where Gandhi would spend his final days. A joke went around that it took a lot of money to keep the Mahatma in poverty. But the connection between great wealth and the freedom fight had deeper roots than this. British favoritism helped create an English-educated class of Brahmins and upper castes confident enough to demand, through the Congress, greater political rights and representation. Yet it had also overseen the rise of a small, ambitious business class confident enough to challenge British trade policies—and, in the case of Tata, to create institutions that substantially expanded India’s educated, privileged class.
Incarnations Page 23