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Trade, Finance, and Industry in the Development of Indian Capitalism: The Case of Tata

Published online by Cambridge University Press:  04 September 2020

Mircea Raianu
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Abstract

This article rethinks the relationship between trade and industry in the development of Indian capitalism, focusing on Tata, pioneers in textile and steel production. It shows how two little-known affiliated trading companies, R.D. Tata & Co. in Shanghai, Hong Kong, and Kobe, and Tata Limited in London, played a crucial intermediary role in securing financing and market access for the parent firm in Bombay while simultaneously increasing its exposure to the effects of global crises. Tata's ultimately dominant position in a protected national economy was due to the contingent failure of these trading companies rather than a foregone conclusion.

Keywords

bankingcottonfamily firmsfinanceGreat DepressionIndiaindustrializationJapanMarwarisopiumParsisshippingsteelTatatrading companies
Type
Research Article
Information
Business History Review , Volume 94 , Issue 3 , Autumn 2020 , pp. 569 - 592
Copyright
Copyright © The President and Fellows of Harvard College 2020

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Footnotes

My foremost thanks go to the anonymous referees, whose detailed comments and suggestions significantly improved the manuscript. Previous versions were presented at the World Economic History Congress in Kyoto in August 2015 and at the Business History Conference in Baltimore in April 2018. I am grateful to fellow panelists, discussants, and audience members, especially Tirthankar Roy, Douglas Haynes, Chinmay Tumbe, David Engerman, Michael Aldous, and Johan Mathew. Heidi Tworek advised me on the publication process and Kirsten Pontalti provided invaluable guidance in making the family tree. Lastly, I thank the staff of the Tata Central Archives in Pune, the Tata Steel Archives in Jamshedpur, and the Godrej Archives in Mumbai, for their assistance. All errors and omissions are my own.

References

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51 Tata Iron and Steel Company (TISCO) Board Meeting No. 87, 23 May 1912, box 502–23, T53-DES-T34-MINUTES-01, TCA.

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86 R. D. Tata & Co., Ltd. (Liquidation), file No. 240, TCA. As table 1 shows, the amount of capital required to rescue Tata & Co. was small by the firm's historical standards but far from negligible in a post-crisis context. Around this time, TISCO was capitalized at a massive Rs 1,907 lakhs but had found it difficult to raise Rs 300 lakhs to fund plant extensions in the early 1920s. See Nomura, House of Tata, 189.

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88 R. D. Tata & Co., Ltd. (Liquidation), file no. 240, TCA.

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98 Tumbe, “Transnational Indian Business,” 667–70. After independence, Tata engaged with the world only through a few companies, including TELCO (Tata Motors), Tata Consultancy Services, and Tata Exports (established in 1962 and later renamed Tata International). Of its remaining overseas offices, New York eclipsed London in importance.

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