The textile industry in India originated in the 1800s when the first cotton mills were established in cities like Mumbai and Kolkata. Pioneers like Cowasjee Davar and Maneckjee Petit helped establish the industry in Western India. Throughout the 1800s and early 1900s, the textile industry expanded as more cotton mills were established across the country. The industry struggled at various points, such as during the American Civil War, but continued growing. After independence, the government emphasized developing small-scale industries and the handloom sector to provide employment. Many textile mills became uneconomical and were nationalized under organizations like the National Textile Corporation.

1. Business History

2. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• 24 years after the first textile mill had been set up in Calcutta,
steps were taken in Western India by a triumvirate of pioneers –
Cowasjee Davar and Maneckjee Ptit in Bombay, and James
Landon in Broach – to esblish the textile industry.
• In 1817, Messrs Fergusson and Company, a leading trading
house in Calcutta, put up the first cotton factory in India. It
comprised 20,000 spindles and 100 looms; the entire machinery
was run by steam power.
• Another Englishman, John Patrick, planned a cotton mill which
was situated a few miles away from Calcutta, and was in
existence in 1854, around the same time as when the first
concrete steps were being taken towards the formation of a
cotton mill industry in India in Bombay and Broach.

3. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• In 1847, Thomas Fulljames started negotiations for the
construction of a cotton mill in Surat. Rao Bahadur Ranchhodlal,
who was later to pioneer the setting up of the mill industry in
Ahmedabad.
• Cowasjee’s father was a leading merchant and important enough
to be elected a member of the Committee of the Bombay
Chamber of Commerce when it was founded in 1837. In 1846-
47, he took the lead in the flotation of the Commercial Bank of
India.
• A few years later, in 1852-53, he also floated the Bombay
Hydraulic Press Company.

4. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• On Aug.10, 1854, Maneckjee Petit decided to float the Oriental
Spinning and Weaving Company, which was set up a composite
mill.
• On May 27, 1858, the first yarns were spun in the Oriental Mill.
From its very inception, the Oriental Spinning and weaving
company showed an impressive commercial performance.
• In 1871, Rai Bahadur Bechardas built-a mill, followed by
Jamnabhai Mansukhbai in 1877.
• On Feb. 21, 1860, Sir Mangaldas Nathubhai floated the Bombay
United Spinning and Weaving Company which was to build a
composite mill.

5. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• In 1861, two more companies were floated in Bombay city, and
one each in Surat and Kanpur. On the eve of American Civil War
in 1861, three cotton mills at work in Bombay, and three more
working in Calcutta, Ahmedabad and Broach.
• In centres other than Bombay, the influence of the boom had not
been very significant. A mill was established by Gavin Jones
and his friends in Kanpur. Calcutta added one more mill, as did
Ahmedabad and one or two other centres.
• Nearly a dozen mills with a little more than 3,00,000 spindles
had come into existence at the close of the American Civil War.
• By 1867, hardly 14 mills were left in the country.

6. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• By 1869 marked the opening of the Suez canal. A journey
between Bombay and London covered only 6,274 miles.
• The Suez canal helped Bombay’s prosperity and made it easily
India’s largest import centre for the textile and other machinery
and its accessories and supplies.
• A spectacular development was the capture of the Chinese
market by the yarn producers of India. Having made modest
beginnings, the Indian penetration of the Chinese market made
rapid strides and led to an increase of nearly 1,000 percent by
1882-83.
• In Ahmedabad, Mansukhal Bhagubhai was managing six mills,
and Ranchhodlal Chhotalal was managing three mills.

7. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• In Kanpur, the first steps had already been taken towards what
was eventually to become one of the largest cotton mill
companies, namely, the British India Corporation.
• In South India, the two Harvey brothers had laid the foundation
of their first spinning mill in 1880. They followed it up with the
Coral Mills in 1887 and the Madura Mills in 1889.
• The Thackersey family set up the Hindustan Spinning and
Weaving Co. in 1873. It was followed two or three years later by
the Thackersey Moolji Mill.
• In 1882, the Indian Manufacturing Company was floated. It was
followed by the Hong Kong Mill in 1892.
• The Killicks laid the foundation of the Kohinoor Mills in 1883.

8. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• A Government Report in 1888 characterized the management in
the Bombay mills as being comparable to the management in
Lancashire and Manchester; the Japanese paid a similar
comment to them in the 1890s when they sent a delegation to
study and profit from the management and technical practices in
Bombay mills.
• By 1885, Jamsetji Tata was convinced that the time was
opportune for Indian mills to manufacture finer counts of yarn.
• Jamsetji Tata brought into vogue a new concept of making
remuneration to the top management. He was a strong
opponent of the system which enabled the managing agents to
secure their remuneration on the basis of a commission.
• The years 1869 to 1892 mark the longest period of continuous
expansion in the mill industry.

9. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• According to a Government Report the number of deaths from
plague had risen to a million, by March 1902,
• Rising wages with no significant improvement in productivity
prevented the Indian mills from holding their share in the
Chinese market in yarn.
• Indian mills first came into competitive contact with Japan after
1900. During the years 1891 to 1894, Japan had imported less
than 12,000 bales a year of Indian yarn, and in the next two
years the offtake had fallen to just 2,500 bales.
• The Bombay Mill Owner’s Association commissioned Nowrosjee
Wadia to prepare a schedule of minimum wages, but he had to
abandon his plan of doing so because of lack of support from the
mill-owning community.

10. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• All the industrial policy statements made by the Government,
beginning with the April 1948 statement, emphasized the need
for encouraging small-scale industries to deal with the problem
of unemployment.
• The most welcome feature of the new textile policy was the
radical modification of the controlled cloth scheme.
• In 1905, the Indian Industrial Conference came into existence.
Gopal Krishna Gokhale, whose moderate and sound views on
political, economic and financial matters commanded
widespread respect supported Swadeshi movement on the
ground that India’s infant industries needed protection.
• The Swadeshi movement provided congenial climate for starting
new industries and for strengthening the existing ones.

11. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• The Government recognized that the position of the Bombay
mills had become precarious. In his budget speech in 1930, the
Finance Member announced a revised tariff on imported cotton
manufacturers.
• The Indian delegation to the Ottawa Conference was led by Sir
Atul Chatterjee and included Sir George Rainy.
• The Ottawa Trade Agreement of 1932 and the supplementary
Agreement that were concluded on Jan.1, 1995 were significant;
they provided for the grant of a preference of 10% on the
specified commodities imported into India from Britain.
• Countries like Ceylon and Australia and those of the Far East,
Middle East and Africa, which had long been accustomed to
supplies from Britain and Japan, now looked upto India to meet
their textile requirements.

12. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• The new rules of India were ardent believers in the country’s
industrial development. The Government of India requested the
Tariff Board to make a summary examination of the question of
protection after Independence.
• The Central Legislature passed a Bill on April 1, 1947 converting
duties into revenue duties. The cotton mill industry, which had
been given effective protection in 1930, was deprotected on
March 31, 1947.
• The question that faced the cotton mill industry in free India was
not how it could safeguard its position from foreign competition
but how best it could serve the country.
• Nehru had got his first opportunity to give shape to his ideas
about planning when the Congress formed its ministries in seven
of the eleven British-Indian Provinces in 1937.

13. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• The beneficiaries of the post-Independence era were medium
and small-scale industries such as light engineering, diesel, fans,
sewing machines, enginers, pumps, auto components,
pharmaceuticals, medicines and drugs, and cutlery.
• Mahatma Gandhi prepared a home-spun program for the
economic revival of India’s vast countryside, and earmarked
Rs.10,000 million in the blueprint for the development of key
industries.
• The Government announced its industrial policy on April 6, 1948.
When the mass of the people were still living below the
subsistence level, there was a need to lay stress on the
expansion of both agricultural and industrial production, and on
the production of capital equipment, wage goods, and export
commodities.

14. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• The new industrial policy announced by the Government of India
on April 30, 1956 stipulated that all industries of basic and
strategic importance, or in the nature of public utility services,
should be in the public sector.
• The handloom sector had also grown. The vulnerability of this
sector was indeed all embracing, as it covered the technical,
financial, marketing and organizational areas.
• Until the first two decades of the 20th century, handloom
production had remained at a high level, and in some years, it
had been twice the quantity turned out by the mills. The women
of India have been the mainstay of the handloom industry.
• The Indian Cotton Mills Federation was established in Bombay
on March 18, 1958 with ten mill owners’ associations situated in
different parts of the country as its constituent members.

15. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• At the commencement of the First Plan (1951-61), the textile
industry was saddled with as many as 150 uneconomic units,
and their number has grown in the last three and half decades.
During 1975-76, more than 750 industrial undertakings, including
small scale units, remained closed.
• The National Textile Corporation (NTC) established in 1968,
controlled 103 uneconomic cotton mills, and 23 more have been
added to it in the last few years.
• On October 31, 1972, the Sick Textile Undertakings Ordinance
was promulgated empowering the Govt. to take over the
management of uneconomic textile mills. The measure was
followed by the promulgation of the Sick Textile Undertakings
(Nationalisation) Ordinance on Sept. 21, 1974.

16. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• The nationalization of sick mills had become
imperative to rehabilitate them. The sick mills was
thus nationalized and placed under the control of the
NTC.
• The mill owners of Ahmedabad formed the
Ahmedabad Textile Industry’s Research Association
in 1950.
• While in 1951, the mill sector contributed as much as
75% of the total cloth output, its share declined to
62% in 1961 and to 48% in 1976 and has since
declined in the 1990s to less than even a quarter.

17. Business History
Indian Businesses prior to independence
The Saga of the Textile Industry
• The industry has nearly 700 units 1990 of which
about 300 are composite mills. There has been
some diversification but mostly in the related
industries and in the ancillary fields. The composite
mills are not doing well and are mostly sick.

18. Business History
Indian Businesses prior to independence
Infrastructure and Engineering
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