The document discusses the emergence of business groups in 19th century Bombay and Calcutta, India. It describes how trading communities like the Parsis, Gujarati banias, Marwaris, and others established themselves and grew wealthy through trades like cotton, opium, banking. Many trading families then became industrialists, with the Parsis pioneering the cotton mill industry in Bombay. Calcutta emerged as a center for jute, tea, and other industries, dominated initially by Europeans but later by the Marwari community. These business groups expanded their economic power and influence over time.

1. Business History

2. Business History
The emergence of industrial groups in Bombay
and Calcutta
• In the 19th century Bombay’s wealth was firmly hitched to
her two main exports: raw cotton and opium; and her
leading imports became cotton piece goods, metals, silk
and sugar and later mill stores and machinery.
• The banias of Gujarat – both Hindu and Jain – had for long
been bankers, traders and shopkeepers. They were active
in the coasting trade between Bombay and Kathiawar and
Konkan, from where they bought grain, vegetables, fruits,
and mutton for the growing populace in Bombay.
• The early decades of the 19th century also witnessed other
important commercial communities gravitating to Bombay.
Chief among them were the Bhatias, the Khojas and the
Memons.

3. Business History
The emergence of industrial groups in Bombay
and Calcutta
• Akin to the Bhatias were two other trading communities, the
Bhansalis (general merchants) and the Lohanas (grain
dealers and shopkeepers).
• The Marathas had been the original inhabitants of the island
of Bombay, but until 1818, they had their political centres in
Poona and Satara.
• The first caste of Brahmins to come to Bombay in large
numbers were the saraswats.
• At the end of the 18th century, the most influential Muslim
community in Bombay was that of the Konkan Muslims.
• The Shetias of Bombay, in the first half of the 19th century,
controlled large fortunes and trade worth millions. The Parsis,
because of their vast wealth, were easily the most

4. Business History
The emergence of industrial groups in Bombay
and Calcutta
• Most of the Shetia families of the 1830s and 1840s had their
roots in the late 18th and early 19th centuries when their
founders had made their fortunes by providing the East India
company with boats for the transport of their troops and
drinking water facilities for their officers.
• The founder of the Petit family established himself as a
dubash (interpreter) and a commission agent to a number of
French and Dutch ships.
• Upto 1813, there were only a few European agency houses
operating in Bombay with a license to trade. After 1813 and
particularly after 1833, with the opening of the China trade
and the rise in price of American cotton, large influx of
independent European merchantile firms were there in the
country. All of these firms had Parsi guarantee-brokers.

5. Business History
The emergence of industrial groups in Bombay
and Calcutta
• Raw cotton was sent to China from the year 1770 onwards,
and some other Indian goods such as yarn, muslin and
precious stones.
• Manekji Nasarvanji Petit bought his own ships in 1848 and
traded with both Britain and China.
• The families most closely associated with the China trade
were the Readymoneys, the Camas, the Banajis and the
Jamshedji Jeejibhais.
• The first Parsi to establish a presence in China was Hirji
Jivaji Readymoney in 1756. Kharshedji Nasarvanji Cama
(1815-85) became one of the most successful merchants to
trade with China. He founded his own firm in 1839 and built
two ships.

6. Business History
The emergence of industrial groups in Bombay
and Calcutta
• Jeejibhai Dadabhai employed some of his capital in the
plantations of coffee, sugar and coconuts on the Malabar
Coast, and in Ceylon and some other places.
• In 1850, the bania firms of Bombay were regarded as
rivalling those of the Parsis in prosperity; they tended to
specialize particularly in banking, inland trade and money-
lending.
• Raw cotton was brought from Gujarat and Kutch for export to
China, and cotton piece goods from Gujarat were sent to
Arabia and the Persian Gulf. From 1820 onwards, private
firms began bringing bales for export to China.
• In 1840 the Government supported Bank of Bombay was
founded. It was followed by the Bank of Western India in

7. Business History
The emergence of industrial groups in Bombay and
Calcutta
• The launching of the Bombay cotton mill industry, which in a
short-time became the leading industry in India. The first
entrepreneur of manufacturing cotton in India was Cavasji
Nanabhai Davar (1814-73), who floated his Bombay Spinning
and Weaving Co. on July 7, 1854.
• A month after Cavasji Davar’s mill, another group of Bombay
merchants met a few close business associates and two
Europeans to promote the Oriental Spinning and Weaving
Company. M.N. Petit’s entry into the mill industry marked the
transition from trading to leading industrialization.
• In Feb. 1860, Mangaldas Nathubhai floated the Bombay United
Spinning and Weaving Company.
• IN 1836 the Bombay Chamber of Commerce was established,
comprising 15 European and 10 Indian firms on its first

8. Business History
The emergence of industrial groups in Bombay and
Calcutta
• In 1850 and 1853, the Chamber pressed for more roads and
other means of communication, particularly in the interior
cotton districts.
• The amount of cotton exports rose to a staggering figure. As
many as 14 new banks were established before 1865.
• The number of cotton mills on the island of Bombay had
increased from 10 in 1872 to 30 in 1881. In 1876 alone, 9
new mills came up.
• All the leading directors of spinning and weaving companies
in the early 1870s were themselves originally merchants, or
the Sons of merchants, bankers and brokers.
• The other great and most notable Parsi success story of the
second half of the 19th century was that of Jamshedji

9. Business History
The emergence of industrial groups in Bombay and
Calcutta
• The leading mill-owners of Bombay city joined together to
found the Bombay Mill-Owners’ Association. By 1882, the
Association represented 32 mills and consisted of a
Committee of 15, of which 8 were Gujarati Hindus, 3 were
Parsis, 3 British and 1 was Khoja.
• The large enterprises of India are a prototype of their foreign
counterparts in many respects with regard to technology and
organization. Between 1956 and 1966, nearly 5,000
collaboration agreements were entered into with the
developing countries of Western Europe, United States,
Canada, Japan and Australia.
• Both Calcutta and Bombay were places where economic
opportunities were fairly abundant, and their importance in
the economy of the country grew with the passage of time.

10. Business History
The emergence of industrial groups in Bombay and
Calcutta
• The process of industrialization as it forges ahead will help in
the homogenization of the various factors. The continuity of
the age-old Indian culture has, however retained its influence
over the Indian entrepreneurs.
• The caste system was one of the restraining factors which
retarded the business activities of the capitalistic enterprises
in modern India. The South Indian Chettiars Association
ensured spatial unity. The Chettiar community was heavily
engaged in money lending not only in South India but also in
Burma, Ceylon and Malaysia-Singapore.
• The Parsis showed diligence and an ability to take risk. They
were also adventurous.

11. Business History
The emergence of industrial groups in Bombay and
Calcutta
• In Bombay, the Indian merchant class displayed much greater
entrepreneurial dynamism and was instrumental in pioneering
the cotton mill industry.
• In Calcutta the Europeans predominated in jute, tea, coal,
engineering, import-export, banking, insurance and shipping.
• The Indian merchant class “were primarily brokers and
moneylenders and graduated into jute baling and pressing
only towards the closing years of the 19th century.
• In the post-Independence era, many medium and long-term
financial institutions have been set up by the Government.
With the nationalization of life insurance in 1956 and of the
Imperial Bank and the other large banks later, and the setting
up of the Unit Trust and mutual funds the financial institutions
have begun to supply the bulk of the capital needed by

12. Business History
The emergence of industrial groups in Bombay and
Calcutta
• In ports, both national and provincial, were the places offering
economic opportunities, but it was the cities which nurtured
ambitious businessmen and provided speculators with the
opportunities to launch their ventures.
• As the market gradually expanded, the production actively
centring around the cities began to adopt the factory system in
order to enter the mass production.
• Navsari in Gujarat was the stronghold of the Parsi community
and Murshidabad was the base from where the Marwari group
used to extend its influence in Calcutta.
• The Marwari community of Calcutta increasingly began to
control the economic activity. The Marwari groups of Calcutta
developed mainly from the merchant and trading class. The
Gujaratis and the Parsi communities had also largely come from
the merchant class. The TATA family was an exception.

13. Business History
The emergence of industrial groups in Bombay and
Calcutta
• The Marwari community till this day continues to be engaged in
business activities in its traditional style. The BIRLA group
before the split controlled over a total of 151 companies, of
which over 17 are owned by the Birla family. The BIRALAS are
characterized by family solidarity and are closely bound by
familial ties.
• The BIRLA group moved ahead after Independence by
employing its capital raising capability and its propensity for
making investments.
• The BIRLAS was largely beneficiaries of government supplies
and contracts during World War II and had closely collaborated
even earlier with the British authorities and firms like Andrew
Yule.
• Calcutta attained her important position by serving as the centre
for the jute, tea, coal steel and engineering industries.

14. Business History
The emergence of industrial groups in Bombay and
Calcutta
• Bombay prospered with the growth of the textile industry,
dependent on the cotton plantations of Gujarat and the Deccan
plateau, and as an import centre after the opening of the Suez
canal.
• Managing agencies played important roles in the early and
formative years of industrial development by facilitating capital
procurement. Among these industries were the railways, the
locomotives, the coal and the mining businesses.
• Managing agencies had helped to facilitate the capital raising
activity of the enterprises concerned due to their international
prestige and their access to bank credit.
• Originally, a managing agency took the form of partnership
made up of family and friends, but they were gradually
reorganized.

15. Business History
The emergence of industrial groups in Bombay and
Calcutta
• It was only in the early 1960s that the two Indian Institutes of
Management came up at Calcutta and Ahmedabad; some full
and part time courses were also instituted in Delhi, Bombay and
Jamshedpur. The management movement was still in its early
phase and has to strike deeper roots in terms of global
standards of professional excellence, research and publications
• The Gujaratis and Parsis, who accumulated their wealth
through the cotton and opium trade and financing, became
owners of factories, and eventually also made room for the
Marwaris who came from Rajputana.
• Originally, the groups began their business activities as
merchants and moneylenders; they expanded their economic
power gradually.

16. Business History
The emergence of industrial groups in Bombay and
Calcutta
• The Marwari groups of Calcutta maintained organizations and
basas or eating and lodging places near their gaddies (offices
using mattresses, desks and telephones) to promote mutual
assistance for the members of the Marwari group.
• The Marwari Chamber of Commerce in Calcutta strove to
promote the unity of its members and to extend mutual help.
• The Marwaris may be said to have been closely knit as a
resource group. The character of the entrepreneurs who
controlled these enterprises has undergone remarkable
changes, over time in response to economic development or
opportunities, following World War II.
• A great increase in economic opportunities has taken place
enabling businessmen with driving ambition or financial power,
to participate increasingly in business activities.