ECONOMY

Tata’s rise mirrors the sweep of India’s history

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Women workers at Tata’s company steel town, Jamshedpur, in 1957 © Keystone Features/Getty

In 1868 Robert Napier, a British commander in colonial India, hired local suppliers to provision a force readying to crush the emperor of Abyssinia across the Arabian Sea.

They ripped him off, cornering markets and hiking prices “for everything from mules to camels to coal”. The rampant “insider trading and corruption” even sparked a parliamentary inquiry.

Among the suppliers was a Parsi opium trader, Nusserwanji Tata. How his family went on to build the modern-day Tata Group is the subject of a new book by historian Mircea Raianu.

The Tata Group’s centrality to India’s modern history, Raianu suggests, goes beyond other corporate empires such as Hong Kong’s Swire or Anglo-American in South Africa.

It pioneered domestic heavy industries such as steel, and is present in dozens of businesses from tea to technology. It has navigated India’s turbulent politics, from colonial rule to socialism, and remains India’s largest conglomerate. It is also, thanks to its ownership of manufacturers like Jaguar Land Rover, the largest industrial employer in the UK.

Tata embodies contradictions. Its formidable philanthropic record, unmatched by other Indian businesses, made Tata “a byword for integrity and excellence in a corrupt society”. Yet for much of its history was a monopolist acting like a “quasi-sovereign power”. One 1920s trade unionist memorably dubbed it the “blind king” in a “city of darkness”.

Raianu’s book, the first by an academic historian mining the company’s archives, attempts to explain its rise and longevity without resorting to its own mythmaking.

Members of India’s ancient Parsi minority — Zoroastrians who migrated from Persia a thousand years ago — families like the Tatas prospered during British rule thanks in part to their liminal place in the Indian caste and social system.

Anecdotes like the Abyssinian affair sit awkwardly with Tata’s modern self-image but reveal the messy 19th century mercantilist imperial world from which they emerged.

The group thrived, Raianu argues, thanks to its own state-like apparatus, building company towns, endowing universities and even setting up Tata Administrative Services, an unsubtle replica of India’s civil service.

This helped it amass enough power to shield it from changing political winds. Tata maintained uncomfortable accommodation with the British Raj, and responded warily to Mahatma Gandhi’s ascendant nationalists. It worked within the socialist state of Jawaharlal Nehru, though it was burnt when India’s first prime minister nationalised Tata carrier Air India in 1953.

The most interesting passages deal with Tata’s quixotic construction of Jamshedpur, a company-built city for steel workers in India’s rural interior that embodied its sovereign aspirations.

Inspired by the garden city movement, Tata hoped to provide good housing and quality of life, pioneering industrial best practices such as the eight-hour work day.

Yet like all utopian quests it concealed dark instincts, and the project’s colonialist undertones come through in the book. Tata displaced local Adivasi, or tribal, populations to build the city. Its efforts to engender a capitalist work ethic among them was rife with racial supremacy. Jamshedpur was “engulfed in violence and political intrigue”, with managers harassing Adivasi women and police shooting strikers.

Ultimately, the company archives prove too narrow a lens through which to really grasp the world in which Tata operated. The most interesting moments come when it moves beyond the top-down accounts of company executives, such as for an Adivasi perspective, but they are few.

Raianu himself acknowledges the limitations of corporate archives, including the possibility that records were “destroyed or deliberately concealed” to hide uncomfortable facts, such as Tata’s opium-trading roots. And yet the book ends up skating over these fascinating and instructive episodes.

Chunks deal with historiographical debates that would be of limited interest to the general reader, and the account peters out in the late 1970s with an unsatisfyingly brief epilogue bringing us to the present.

Tata book jacket

Raianu notes that Tata is no longer at India’s entrepreneurial vanguard. The likes of Mukesh Ambani’s Reliance Industries and Gautam Adani’s eponymous group, with their investments in telecoms and renewable energy, hold stronger claim to be the “nation builders” of today.

These tycoons represent a different way of doing business, one that has prompted much consternation. They lack Tata’s ambivalence about the state, aligning themselves unabashedly with Narendra Modi, and share few of the conservative Tatas’ qualms about “wealth creation for its own sake”.

But the account of how one conglomerate came to dominate India’s economy for much of the past 150 years makes timely reading for those reflecting on whether capitalism and corporate power in India is entering a new era.

Tata: The Global Corporation that Built Indian Capitalism by Mircea Raianu Harvard, $39.95/ £31.95, 304 pages

Benjamin Parkin is the FT’s Mumbai correspondent

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