In today’s political discourse, Bengal and Bengali Hindus are hardly associated with enterprise and industry. The general perception is that Bengali Hindus especially educated ones are basically job seekers who want the comfort of salaried employment and a sense of security that comes with it. Not necessarily a government job, but a private salaried job is much better than the risk of running a small or even a medium sized business. Being a petty clerk is safer than setting up a shop.
While this perception certainly holds true for the post 1960 generation [the reason behind that need not be discussed now], Bengal in the 1st half of the 20th century, did have a rich history of establishing modern industries starting from the Swadeshi movement and in some cases, even few years before that. And even before the advent of modern industry, Bengalis had a history of taking up commercial pursuits not just within Bengal, but also beyond.
A brief history
Most historians agree that Bengal from antiquity to the late 18th century had always been extremely prosperous (although during Mughal era this prosperity rarely touched the toiling masses). Its prosperity largely due to its incredibly fertile and productive plain land, monsoons (which makes Rice its predominant crop) and large network of rivers which start at the Himalayas and end up on the bay of Bengal. This led to Bengal emerging as a hub of industry (of the primitive kind of course) and transnational trade between that extended from the islands of south east Asia, Sri Lanka to Burma and Tibet with ports like Saptagram in modern day Hooghly, Chandraketugarh in present day north 24 parganas and Tamralipta in today’s Medinipur. Even in the middle ages Bengali Hindu epics are filled with stories of merchants like Chaand Sadagar, Srimanta Sadagar etc
Even when the British first landed in what is now Kolkata in the 1680s, it was already a prosperous commercial hub with the Seth & Basak families dominating the textile industry. It had thousands of weavers & other craftsmen working in the workshops of the Basaks producing textiles meant for exports elsewhere.
After the British East India Company established itself in India, many Bengali traders and their immediate families accumulated huge amounts of wealth by becoming “Banians” (partners and intermediaries) of the EIC, its officials who used to conduct their private businesses and other British owned firms that set shop in Calcutta for trading.
However, these “Banians” were essentially collaborators of British imperialism & British commercial interests. The British imperialists in order to conduct trade and commerce needed the collaboration of Indian mercantile class. That’s where the Banians came in with their extensive knowledge of how to conduct trade in India. One sector in which Bengalis dominated was the Salt trade.
These “Banians” were an integral part of British East India Company’s commercial networks set up in India; the British needed them for their exploitative trade in India and their survival was dependent on British patronage. Their investments in new businesses (Coal mining, Shipping, banking, Indigo, silk) were not without partnership with British firms and dependence on British commercial networks. This form of trade combined with British policy, despite making a handful of British intermediaries rich, ultimately led to destruction of handicrafts /cottage industry of India and the British flooding the Indian market with imports following the industrial revolution.
This phenomenon though was not peculiar to Bengal. Merchants from all over India, especially those from western India actively collaborated with the British, and became part of transnational trade (including opium trade) conducted by the British across the world including their colonies. Some business dynasties from western India who were partners and intermediaries of the British in their opium trade are now oligarchs in present day India with business interests and connections in Britain!
In Colonial Bengal, the Nandys of Kasimbazar (Krishna Kanta Nandy was the Banian of Warren hastings), Pal Chaudhuris of Ranaghat, Nabakrishna Deb of Sovabazar in 18th century & the Tagores, Ghoshals, Mitras, Mullicks, Duttas of 19th century North Calcutta were some prominent families engaged in this type of trade. Ramdulal De, Motilal Seal, Dwarakanath Tagore, Digambar Mitra, Ramgopal Ghosh were some of the richest men in Bengal in early 19th century (Randulal De was the local “Banian” of American firms conducting businesses in British Calcutta). Most of these families came from diverse “castes” & social background – some were from communities of artisans and craftsmen (called “Nabasakh”), some were Subarnabaniks and Gandhabaniks (who despite their small numbers were extremely wealthy and highly educated) and of course there were Brahmins and Kayasthas.
However, by the mid 19th century (and in some cases since late 18th century) most of these mercantile families in Bengal were investing heavily in acquiring Zamindari instead of pursuing further Trade with the British. The story was the same almost in every rich Bengali trading family — most prominent member of the family acquired wealth by doing business with the British but by 1840s most of the next generation invested this wealth in buying Land (and earning their income from that Land) and lost interest in trade and commerce, though only temporarily. Meanwhile “Marwari” traders from Rajasthan and Haryana who by mid 1700s had spread their networks across large parts of India (including Bengal) filled the gap and became intermediaries or partners of British firms operating in Calcutta. A handful of remaining Bengali intermediaries lost patronage of the British by the last decades of the 19th century.
1900 Onwards – Swadeshi Movement
The Swadeshi movement started in 1905 as a protest against the partition of Bengal by the British government. Swadeshi was not just about boycotting British goods, as much as possible, but also about setting up Swadeshi enterprises focused on producing & manufacturing of goods which would not be dependent on British patronage for either capital or market to sell their produce. Collaboration with British was kept at a minimum, often confined to purchasing machinery.
Though some of the early swadeshi industries started much before the 1905 like PM Bagchi &Co in 1883, CK Sen & co in 1878, Bengal Chemicals (1892), Sakti Aushadhalaya in 1901; it became a widespread phenomenon and a socio-cultural & political movement from 1900 onwards.
Names of some of the well known enterprises established by Bengali Hindus which not only survived foreign competition but thrived and expanded (at least till the disastrous decade of 1940s) are as follows – Bengal Chemicals, Calcutta Chemicals, Alembic Chemicals, East India Pharmaceuticals, Mohini Mohan Cotton mills, Sri Annapurna Cotton mills, Bangalakshmi Mills, Dhakeshwari textile mills, Calcutta Fanworks, Scientific and Industrial Glass works, Bharat Battery Manufacturing, Bengal waterproof, Bharat Jute mills, India Machinery Company ltd (formed by merger of Bengal weighing scales, Paul’s engineering, Atlas weighbridge company), Bengal immunity, Krishna silicate & glass works, Comilla Union Bank, Comilla Banking Corporation, Bengal central bank, Hooghly Bank, House of Labourers and its Steel Construction Co ltd, Bengal pottery works, Hindustan Cooperative Insurance, GD Pharmacauticals, Sulekha Ink, Nadia tanneries, Bengal Lamps, Sreenath mills.
Apart from these well-known enterprises, there were several smaller enterprises and industrial clusters that produced a wide range of goods. The sectors in which Bengali entrepreneurs excelled were foundries and machine tools industry. 24 parganas, Howrah, Calcutta and Comilla became the hub of small engineering firms manufacturing knives, scissors, locks & keys, chains, iron safes, trunks, boxes, buckets, mugs, water tanks, cutlery, crockeries, water taps, spiral staircases, pipes, surgical instruments, gates, agricultural implements, machinery to be used in smaller industrial units like machinery for crushing sugar, for making matchsticks at small scale, cutting timber, water pumps, machinery for making pottery, drilling machines, lathes, presses, weighing machines, machinery used in bakeries & food processing units, soap making.
Besides these small & medium scale units, there were numerous workshops run by traditional artisans in the hinterlands of Bengal.
By the time of independence, Howrah alone had close to 1000 small & medium sized units overwhelmingly owned by Bengalis (specifically the Mahishya caste, who were previously landed farmers in Howrah before turning to industry & commerce).
Apart from this, Bengalis dominated small scale paper manufacturing, small scale match manufacturing, food processing industries (Bengal till 1980s was probably largest market of bakery goods), gold jewellery (most of the well known Jewellery companies of present day Bengal started during Swadeshi era), printing & publishing industry, footwear industry, household articles of daily use and of course Ayurvedic Medicines. In case of Ayurvedic medicines, CK Sen & Co, Sadhana Aushadhalaya, Dacca Ayurvediya Pharmacy, Dabur (started by a Punjabi family) were prominent names.
Starting of Swadeshi mills also paved the way for expansion of the retail sector; shops owned by Bengali shopkeepers were needed to sell swadeshi goods. Newspaper & printing businesses boomed because of advertising and drummed up the propaganda in favour of Swadeshi & advertising industry began to emerge.
Not because of British Rule but despite British Rule
There is a general myth about Bengali business community that they came up because of British patronage.
It is certainly true, as mentioned above, that when the British EIC first began to colonize India, Bengal like all other provinces had its share of collaborators who made tons of wealth. Yet, Bengal witnessed a peculiar phenomenon where by 1840s and 1850s Bengali business community invested in Land and stopped doing business with the British.
When the number of Bengali Hindu owned Swadeshi enterprises began to increase in Bengal after 1905, these industries were directly in conflict with not just British commercial interests but also a section of big Indian Conglomerates who collaborated with the British at a far greater scale. At that time there were several conflicting business interests operated in India – British firms manufacturing in Britain & exporting to India, firms importing British made goods in India, Indian intermediaries working under such British importers (working as wholesalers, distributors of imported goods), British firms operating businesses and producing goods in India and their Indian intermediaries, British businessmen who collaborated with large Indian conglomerates in Bombay & finally Swadeshi Industries which depended upon Highly educated Indians (sometimes even educated abroad or worked previously in Japan, Germany, USA) for management of firms instead of hiring foreigners as consultants & managers and occasionally tried to make their own machinery or outsource it to other Indian firms instead of importing.
The last type of Swadeshi firms were most numerous in Bengal (where it was mostly run by Bengali Hindus, followed by few Marwaris & north Indian Hindus) followed by Madras, Mysore (where it received patronage from the Royalty) and slowly made its way into Punjab (where Punjabi Hindus dominated industry) and pockets of UP. Bombay too had Swadeshi enterprises but fewer in number compared to those which actively collaborated extensively with the British not just for business but also politically.
Right from the beginning many of these Swadeshi mills began to face problems. To begin with they operated in an environment of “free markets” & “free trade” without government support and British government’s policies favoured all other groups (British firms got maximum support) to varying degrees but not those who did Swadeshi as they often meant losses for British businesses. These Swadeshi companies did not take monetary support from British banks, hence shortage of capital; lack of experience in running industry, lack of large-scale Caste, community & kinship networks across large geographical distances, attempts by various rival lobbies (mentioned above) with whom there were conflict of interests). Even if many of them bought machinery from British firms, they would not go for long term collaboration. When foreign collaboration became unavoidable then they preferred collaboration with Germans and Japanese (they sold machinery and sent consultants). Cooperation from British controlled Railways was often difficult. Hindustan Cooperative Insurance Society (which was financially healthy and efficiently run) even faced fake news and propaganda from a section of the press controlled by foreign insurance companies!
A large percentage of smaller enterprises shut down temporarily within a few years of their establishment due to lack of capital, experience & onslaught of foreign competition; owners making a comeback after a few years with more capital to invest & better manpower. But the majority of firms across different sectors managed to stay alive with modest production capacity though with little expansion for many years. They stayed alive initially because of public sentiment, solidarity; later these enterprises improved upon their performances and survived foreign competition. A minority of the enterprises did quite well right from the beginning due to steady supply of capital from Zamindars, rich Lawyers, professionals and highly qualified Bengali workforce and management. Almost all Pharmaceutical and Drug (medicine) manufacturers did their own in-house research and development (which required a lot of funds) instead of collaborating with British firms for technology.
Some Swadeshi entrepreneurs also ended up in jail for funding revolutionary groups (instead of Gandhi of course)! Khagendra Chandra Dasgupta of Calcutta Chemicals, Hirendranath Duttagupta of East India Pharmaceuticals, Bibhutibhushan Sarkar of Krishna silicate & glass works, Surendra Mohan Basu of Bengal Waterproof all ended up in jail and stayed there for few years.
One advantage Bengali owned Swadeshi enterprises had over their western Indian counterparts was that ownership and management of Bengali firms were not in the hands of few “Castes”. The investors, board members, top management of one company were made up of Bengali Hindus from different Castes, social & professional backgrounds, each bringing their own expertise, education, talent & knowledge. Traditional trading & artisan castes; Landed peasants turned small businessmen; big Zamindars of different castes; Brahmin, Baidya & Kayastha professionals with high educational qualifications (often educated or trained abroad) all collaborated & were involved in Swadeshi enterprises.
Problems faced by Swadeshi enterprises
By the 1940s, barring a few dozens of or perhaps close to hundred firms, all other Bengali owned firms remained what we today call small and medium scale enterprises (SMEs). They were often not diversified and specialized in only one sector. Many could not scale up. The large conglomerates of that era on the other hand enjoyed patronage of the British government and had far superior networks and financial muscle. What was needed was independence and a benevolent government at the provincial level. There is no shame in admitting that no industry can survive in an absolute free market and free trade environment against bigger sharks. All industries do receive patronage from political leaders. What matters is what sort of industries are receiving protection and care should be taken that individual industrialists should not benefit at the cost of rest of the society; at the same time, interests of consumers (lure for relatively cheaper imported goods) must not always triumph at the cost of indigenous industrial development.
As “independence” approached, it was thought that the Provincial government of Bengal and to some degree the central government of an Independent India would provide patronage to Swadeshi Companies and create an environment of stability and support which would take these enterprises to the next level.
Instead independence (or a mere transfer of power & India’s transformation from a British colony to a semi-colonial entity part of the commonwealth) came with a botched up partition of Bengal which included Gandhians and Nehru giving away large chunk of fertile land of Bengal to Pakistan and lack of rehabilitation to the refugees. A large number of mills which should have ended up in India went to Pakistan apart from loss of Landed assets. This combined with Nehru’s vindictive attitude towards Bengali Hindus and Bengal in general started a process of decline. The factors that led to the decline of Bengali industries can be discussed in detail in another article.
- India’s new capitalists by Harish Damodaran
- Swadeshi enterprise in Bengal 1921-1947 by Amit Bhattacharyya
- Swadeshi enterprise in Bengal 1900-1920 by Amit Bhattacharyya