India Before the Ambanis review: How Indian business changed the course of history over 300-plus years

Mughal-era jeweller-cum-banker Shantidas Jhaveri, Kirloskar group founder Laxmanrao Kirloskar (image cropped from India Post stamp), and textile industry baron Ranchhodlal Chhotalal from Ahmedabad. (All images via Wikimedia Commons)

History books rarely give business the credit it deserves as a driver of events. Take the example of colonialism. While it's common knowledge that there was a huge transfer of wealth from the colonized countries to the colonizers, the role of indigenous business in facilitating regime change is less-widely appreciated. For, if Indian business families from the Birla's to the Bajaj's helped to finance the struggle for freedom from British Raj, it was also Indian Jagat Sheths who bankrolled the East India Company's early conquests that set the stage for British colonial rule in India. This neat (and rare in history) bookending apart, the two instances offer a glimpse into how Indian business has historically influenced everything from our political fortunes to social customs and vice-versa. Business historian Lakshmi Subramanian brings this out in sharp relief in her latest book 'India Before the Ambanis'. She spells it out in the epilogue to the book: "Being rooted in one’s context with the ability to see into the future was a trait common to all of them across time and space, whether it was Arjunji Nathji, the Gujarati banker who bankrolled the English Company’s wars and expansion projects, or J.N. Tata, whose ideas and aspirations were in perfect sync with those of the enterprising free merchants and private traders, or Dwarkanath Tagore, who followed European commercial methods closely to revisit the very idea of trade and entrepreneurship as a public good."

Subramanian covers a lot of ground in the book: How Indians did business in the time of the Mughals; how noble patronage helped establish and enforce good business practices; what role businesses played in the colonization of India by the British; what changed during the colonial era, as Europeans from the Portuguese and French to the English tried to capture territories and revenue streams; how business and politics helped in the rise of Mumbai over Surat as a centre of trade (and how Parsi businessmen made inroads in shipbuilding and shipping - both areas where the British were loath to have locals participate); how politics and business clashed in the east and then the west of India - from the Battle of Plassey in 1757 to the third Anglo-Maratha War (1817-19); how businesspeople negotiated these regime changes; how the Parsi community cemented its reputation for trustworthiness; what happened to Indian banking systems as British imperialists took over; and what role Indian family businesses played in all this. Finally, how pioneers from Lovji Nusserwanji Wadia (who went from Surat to Mumbai with 10 carpenters in 1736 and cornered a share of the shipbuilding industry in the rising port city), Jamsetjee Jeejeebhoy and Dwarkanath Tagore ("both of whom saw enterprise as a conduit to modernity" in mid-19th century), T.V. Sundaram Iyengar (who pioneered public transport in Madurai a century ago), Laxmanrao Kirloskar and his brothers (who set out to mechanize and modernize agricultural tools), the Godrej family starting with Ardeshir Godrej (who made Swadeshi desirable again in post-Independence pre-liberalization India) and "the flamboyant Dhirubhai Ambani, who...gave innovation a new meaning altogether" - aligned their business goals with national aspirations, both before and after Independence.

As a structural framework, Subramanian focuses mainly on Bengal and Maharashtra, with central Indian and Malwa (Punjab) merchants making a brief appearance in segments about the ultra-lucrative opium trade. Here's what she writes: "What accounted for their success? What lay at the core of successful Indian enterprise at a time when the ascendancy of the new power, the English East India Company, and of British capital swept all competition away? How did Indians learn to work with new masters? How did they strike on their own? Was it to do with their personal temperament and risk-taking acumen, was it contingent upon local circumstances or did they draw from a legacy of stewarding trade and landing business? To answer these questions, we will need to go back to the actual material context in which Indians, especially men of capital, operated in the two cities of Calcutta and Bombay, both of which emerged as crucial nodes in a newly emerging global economy, to the specific advantages our protagonists enjoyed, not to speak of their individual attributes and appetite for success."

The title of the book offers an immediate index on to the broad time-sweep of the book, covering over 300 years of Indian business - from the time of the Mughal rulers (1600s) to Dhirubhai Ambani who set up "Reliance Commercial Corporation in Bombay, which undertook trading in spices (ginger, cardamom, pepper and turmeric), betel nut, cotton and nylon textiles to Ethiopia, Somalia and Kenya" in 1958. In-between, Subramanian offers up examples of extraordinary Indian businessmen (and they were all men) who worked within the rules of engagement set by the dispensation of the day. Take, for example, Mughal-era jeweller-cum-banker Shantidas Jhaveri who "provided funds to the state and jewels to the Mughal court, whose appetite for luxury items was insatiable. The basis of Shantidas’s wealth and proximity to the court was trade and banking; he transported goods on freight to West Asia and participated in sarrafi". In his time, Jhaveri offered loans to both Mughal rulers and English traders. So influential was he that Shah Jahan in 1636 elevated him to governor of Gujarat - home to some very important ports of trade including Surat.

Or the example of Gujarati banker Tarwady Arjunji Nathji who financed the British company during the Anglo-Maratha wars (there were three, fought between 1775 and 1819). Subramanian writes: "During the wars, the contract with the banker to provide funds at the local currency to armies on the move, was the lifeline for the Company, which, on every occasion, had to give in to the demands of Tarwady as far as the exchange ratio between currencies was concerned. It was the senior banker alone who had real power over the money market, which was expressed in his ability to command huge funds at any given time and determine the rates at which his Surat–Bombay–Bengal rupees or the Surat–Malwa rupee would be exchanged for local money."

Or perhaps the example of Mulla Abdul Ghafur who used a combination of a 17-ship fleet and network of nakhuda or agents who were mostly family members to build a rather handsome net worth of Rs 85 lakh in the 1700s. Both Tarwady Nathji and Abdul Ghafur employed a trusted network of people they knew, often family members, in their businesses. Indeed, business families and communities are a constant presence all through this history without quite being foregrounded until we reach the 20th century, when founders like T.V. Sundaram Iyengar, the Kirloskar Brothers, Ardeshir Godrej offer pegs to talk about the idea of development through the decades - representing innovations in mobility (including public transport), agriculture, modern furniture and joint-stock companies.

Penguin Business, 320 pages

To be sure, Subramanian explicitly states that her intent here is not to write mini-biographies or document any one business family or personality. Instead, her narrative follows the evolution of local community networks in the service of trade: of "hundis" credit notes (darshani hundis for instant payment + railway receipts, shahjogi hundis issued by people with a high standing, etc.), of indigenous banking and arbitrage, of economic systems that ran on trust and often boggled the East India Company officials who sought to replace them with standardized cheques and currency. Indeed, much about the Indian way of doing business at the time confounded the British traders, from the multiple coins (a recent WhatsApp message about a coin used by the Company in India - with Hindu symbols where the English coinage typically has the head of their king or queen - perhaps inadvertently and misguidedly suggested there was just one type of coin used when the then-tiny trading company arrived in India).

Subramanian's book takes stabs at explaining how the politics and business of the times intersected and responded to each other. Some examples of this in the book cover 20th-century founders. This brings us to perhaps an unintended consequence of reading this book: a revived admiration for the institution of family business. For all its shortcomings, it was a system that was built over generations, and which seemed to work for domestic and international trade for a long, long time.

Pejoratively called Lala companies today, family businesses in India don't always get their due despite their rich (pun intended) history and continuing importance in current times. Consider this: family-owned businesses account for three-fourths of India's gross domestic product (GDP), according to data collected by Visual Capitalist. Further, this share is expected to grow to 80-85 percent by 2047, according to an analysis by McKinsey. Not to put too fine a point on it, there's a reason why family businesses are still typically structured the way they are - and it has everything to do with convention and trust. And in unpacking some of this history in 'India Before the Ambanis', Subramanian nudges us to check some of our prejudices.

Of course, the book has its flaws. A long and winding introduction explains the author's focus on broad business movements and the inner workings of the money bazaars rather than penning biographies, but it can be confusing in bits. Subramanian is on stronger footing when she gets into specific examples, like her description of Mulla Abdul Ghafur, who in addition to being a shrewd businessman who could read future market demands better than most, is described as someone with the acumen to recognize and overcome the tactics of the English who tried to delay his shipments on the pretext of offering ship-protection services. Subramanian writes that Ghafur managed to circumvent them by leaving earlier than planned, and then claiming compensation if his ships were intercepted by pirates at sea.

Also, because the book covers such a wide range of time and systems, it's better at painting the big picture than getting into the weeds of any one business system - case in point: the segment on the types of hundis and how they began to recede during the British Raj can be a bit confusing. Additionally, for all her denials the final chapters about 20th century business founders seem to have a eulogistic quality about them.

Having said that, the book has more than a couple of things going for it. Often when we say 200 years of India's colonial past, we glaze over so much of what was happening on the ground, and the agency that some Indians continued to exercise and fight for in arenas like business despite the constraints. (Manchester cotton had unfair advantages to Indian textiles in the home market, for instance). The book is an interesting introduction to these movements for non-historians; to acknowledge the people who were able to build business empires within political regimes that cared little for local industry or customs.

Subramanian is unrushed in her descriptions of these business agents of history. From Dwarkanath Tagore's ambitions in coal and shipping funded by the trusting public (he set up the Calcutta Steam Tug Association, the Steam Bridge Ferry Company and the Indian General Steam Navigation Company in the mid-19th century) to Ranchhodlal Chhotalal, "a Nagar Brahmin who worked with the government, (to) seriously contemplate the revival of textile industry in the city (Ahmedabad)". From the Parsis with their shipbuilding and joint stock companies in Bombay (now Mumbai) to the Godrej's and how they overcame the near-perennial steel shortages in India to make their then-ubiquitous typewriters, government office kursi and steel almirahs.

Subramanian, who teaches history at the Centre for Studies in Social Sciences, Kolkata, has written on the history of business before in 'Three Merchants of Bombay: Business Pioneers of the Nineteenth Century' (2012). In that book, she had focused attention on three business leaders: Trawadi Arjunji Nathji, Jamsetjee Jeejeebhoy and Premchand Roychand. They find mention in this book as well, but in the much larger context of empires, markets, businesspeople that came immediately before and after.