What’s Good for India

Acrumpled​ hundred-rupee banknote falls from a man’s pocket. The camera shows Gandhi’s face on the note. A young girl picks the money up, and asks her mother what she should do with it. Her mother says she can get herself chocolate, buy a doll or give it back. The girl hands the note back to the man who dropped it. Against a background of sentimental music, a voice announces: ‘If every mother gives her child a pinch of honesty every day, the nation will become honest too.’ Then the mother says to camera: ‘After all, we’ve eaten the nation’s salt.’ Launched in 2012 in the wake of mass protests against state corruption in India, the advertisement was part of a campaign for Tata salt, which was described as ‘desh ka namak’ or ‘the nation’s salt’.

In Tata: The Global Corporation That Built Indian Capitalism, Mircea Raianu writes that during the Mughal period the eating of salt functioned as a ‘ritual of incorporation’, binding conquered subjects to the emperor. Salt also connects the citizen to the nation because of the part it played in the struggle for emancipation from colonial rule. In 1930 Gandhi led a protest against the British salt tax, in a march that ended at Dandi on the Arabian Sea, where people made their own salt by evaporation and then ate it. We are meant to relive that act of protest with each pinch of Tata salt. The slippage between salt and nation, between Tata and India, speaks not just to Tata’s central place in the development of Indian capitalism but also to the way in which the corporation has variously come to represent progress, the evils of capitalism, and even the state itself.

Incorporating more than a hundred companies operating throughout the world, the Tata group sells gold jewellery, tea, clothes, health insurance, mobile phones and artificial intelligence, and consultancy services to governments and businesses. It produces cars, steel, electricity and chemicals, and runs airlines as well as luxury and budget hotels. The Tata adverts I grew up watching seemed to be doing something more ambitious than selling clothes or groceries: they represented values to live by, a guide in how to be a good Indian citizen. ‘What is good for India is good for Tata’ it says on the group’s website. The Tatas aim not to profit, but to serve.

Charting the development of the Tata conglomerate from its origins in 19th-century trade to its primacy in the manufacturing, service and trade sectors in postcolonial India, Raianu paints a more ambiguous portrait. The business was started by Nusserwanji Tata, the son of a revenue clerk in Bombay. He was a Parsi – Zoroastrians whose ancestors migrated to India from the Persian Gulf more than a thousand years ago to escape conversion to Islam. The Parsis dominated shipbuilding in India in the 18th century and formed successful trading alliances with British firms, becoming key players in the trade between India, Britain and China. Nusserwanji’s fortunes were made by his work as a contractor during the Anglo-Persian War of 1856-57, when British troops and ships raised by the government of India occupied the Persian port of Bushehr at great expense. James Outram, who lends his name to many neighbourhoods in India, led the British forces. He returned to India to quell the uprising known as the Indian Mutiny – or, depending on your choice of historian, the First Indian War of Independence.

As Indian rebels tried and failed to reinstate the last Mughal emperor, and control of the government of India passed from the East India Company to the British crown, Nusserwanji brought his son, Jamsetji, into the family business. They opened branches in Hong Kong and Shanghai, exporting Indian cotton and opium to China, and taking tea, silk and gold back to India. It was a risky way to operate: Indian merchants depended on bills of exchange, promissory notes, to cash their profits. These bills were part of a system of speculative credit which connected Britain and its colonies. The reliance on bills of exchange led, in Marx’s analysis, to commodities ‘overflooding the markets’. When Bombay was hit by financial crisis, the Tatas had to suspend the China trade (they returned to it some years later), but another colonial war soon came to the rescue. In 1868, Nusserwanji Tata won a contract to supply General Robert Napier’s expeditionary forces in Abyssinia: Napier was leading an expedition against Emperor Tewodros II, who had asked for help quelling internal revolt and, receiving none, had taken hostage the British consul and a group of Europeans. Rescuing the hostages entailed building a port, laying down a railway line and transporting thousands of men and animals from India to Ethiopia. Raianu notes that the Tatas’ involvement in the opium trade has often been criticised, but not their central place in ‘a 19th-century version of the military-industrial complex revealing the nexus of Indian capital and imperial power’.

War profiteering is left out of Peter Casey’s ‘authorised’ history of the Tata conglomerate, The Story of Tata: 1868-2021. According to this version, in 1868 Jamsetji Tata merely ‘brought industry to India’. Unlike Raianu’s historically situated account, Casey’s book elevates Tata to mythical status (it is dedicated to the keepers and protectors of the ‘Tata flame’). What it lacks in historical detail is made up for in colour photos and ‘exclusive’ interviews with members of the family and their confidants. Much of the literature on Tata is like this, written by senior executives in the company, or by writers who are devoted to it. Last year, waiting for a flight at Mumbai airport, I counted at least six titles in the airport bookstore, each telling the story of the company’s successes.

Tata’s first industrial enterprises were cotton mills. In 1877, the year Queen Victoria was proclaimed empress of India, Jamsetji founded the Empress Mills in Nagpur. The company’s next mill, opened nine years later in Bombay, was called Swadeshi. The name was supposed to show Jamsetji’s support for the new Indian National Congress party, which had a political programme intended to combat the drain of wealth from India to Britain. Swadeshi, which means ‘of one’s country’, encouraged production and consumption in India and the boycott of imported goods. By this time, capitalist expansion was also coming into conflict with imperial policy, which was to preserve India as a captive market for British manufacturing. However, as Raianu shows, this wasn’t a simple opposition. The Swadeshi mill produced cloth for China with cotton imported from Egypt, so of necessity participated in imperial networks of trade and commerce.

After Jamsetji’s death in 1904, control of the Tata holdings passed to his sons, Dorabji and Ratanji, and his cousin Ratanji Dadabhoy Tata (R.D.), who dealt mainly with international trade. Towards the end of his life, Jamsetji had concentrated on gathering capital to build India’s first iron and steel plant, and a hydroelectric plant to supply energy to the firm’s cotton mills. Neither project was finished during his lifetime. When the Tata Iron and Steel Company (Tisco) was established in 1907, all of its shareholders were Indian and much of the capital was supplied by the rulers of India’s princely states – which seemed to be in adherence to swadeshi principles. The first plant, located about 250 kilometres from Calcutta, was in a densely forested region that was home to India’s Adivasi (indigenous, or tribal) population.

Though the plant is often presented as a triumph of swadeshi, in acquiring land to establish Tisco and Jamshedpur – named in honour of Jamsetji – the Tatas exploited colonial laws. The Land Acquisition Act of 1894 facilitated compulsory dispossession in favour of private companies if they served a ‘public purpose’. Over the years, Tisco was landowner, landlord and municipal authority in Jamshedpur, buying up entire villages, charging rents at a profit, and providing patchy services. The ostensibly swadeshi Tisco plant resembled a colonial state, and this wasn’t entirely by accident. After Jamsetji’s death, B.J. Padshah, whom Raianu describes as his ‘right-hand man’, advised the Tata heirs to ‘plant your industrial empire with the organising precision of the Roman, not the fever of the Arab’. And it wasn’t just that empire provided an apt metaphor for the Tatas’ aspirations. Their fortunes were directly connected to the British Empire. When R.D.’s speculations risked the finances and reputation of the Tatas, another war came to the rescue. All of Tisco’s steel production was placed in service of the British colonies during the First World War, guaranteeing the company’s financial future.

Suggestions for improving the working or living conditions of the workers at the plant were often rejected on the grounds that the Adivasi had peculiar habits, temperaments and physiological characteristics. This racist colonial attitude was most apparent in the treatment of Adivasi women, who made up a sixth of the workforce. The company provided housing for just eight thousand of its fifty thousand workers and many of the women travelled in from villages miles away. They would stay overnight at the plant, bathing in waste-water from the blast furnaces. In the recollection of a timekeeper in Tisco’s brick department, cited by Raianu, it was commonplace for supervisors to touch women’s bodies without their consent.

Casey describes ‘the Tata Way’ as a ‘practical alternative to Marxism’, quoting Ratan Tata, its chairman until 2012: ‘Marx’s vision was to take from the rich to feed the poor. Jamsetji’s vision was to make the poor rich.’ Fine sentiments weren’t enough to stop workers at Tisco, in 1920, going on strike to protest about workplace injuries, racial discrimination and compulsory overtime. When one group of strikers attempted to block a train carrying labourers to the plant, the town administrator asked the police to open fire. Five people died, 21 were injured. A much bigger strike followed in 1928, with workers organising across caste and community divisions. The women employees were particularly militant, combating strike-breakers with ‘brooms, stones and bodily refuse’. The Tatas’ practical alternative to Marxism, in this instance, was to remove women from the workforce.

It’s true that the company saw itself as committed to the uplift of the nation and its less fortunate citizens, but the charitable philosophy of Tata was informed by Jamsetji’s ideas of ‘constructive philanthropy’, which was intended to ‘lift the best and most gifted’ members of society out of poverty, rather than prop up the ‘weakest and most helpless’. When Dorabji and Ratanji died, they left their shares in the Tata companies in trusts, an unusual arrangement for an Indian business, which enabled the family to claim that its wealth was held in trust for the nation. This was, of course, a simplification. Constructive philanthropy laid bare that some were more deserving of charity than others, and Adivasi workers didn’t even count as citizens, much less as citizens who could be classed as gifted. The Tata Institute of Social Sciences, founded in 1936, concerned itself with industrial relations at a time when there were strikes in Bombay textile mills and militant trade unions were gaining in popularity. The scientific institutes endowed by the Tata trusts had greater autonomy, but the trusts’ role in setting them up meant that the Tatas had licence to meddle, as they had a habit of doing, especially when the spectre of communism loomed, as it did when the nuclear physicist Homi J. Bhabha wanted to travel to the Soviet Union, or the mathematician and Marxist historian D.D. Kosambi mounted an anti-war critique of atomic research.

In the years before the Second World War, the Tatas had to manage the competing pressures exerted by the colonial state, the nationalist movement, striking workers and others who accused them of subverting the war effort. In 1942 a strike was called in support of the Quit India movement, organised by the Indian National Congress, and foremen at Tisco said they wouldn’t manufacture ‘steel which would be turned into bullets and then used against their countrymen’. A report issued by the Indian Federation of Labour suggested that Tata’s middle management had colluded with the strike and pressured workers into participating. The IFL, whose Jamshedpur branch was led by Maneck Homi, a firebrand leader during the 1928 strike, was linked with the Radical Democratic Party founded by M.N. Roy, a swadeshi radical and former Comintern member. Roy believed that the anti-colonial struggle should be part of the global fight against fascism and was worried that the Quit India movement would entrench the rule of aristocrats and capitalists, leaving the nation in the hands of stockholders and profiteers.

The leadership of Tata had passed in the late 1930s to R.D.’s son, Jehangir Ratanji Dadabhoy Tata. The dapper, cosmopolitan J.R.D. was the driving force behind the Bombay Plan, an economic blueprint drawn up by eight Indian industrialists once it became clear that colonial rule was coming to an end. It advocated an ambitious investment plan and state ownership of essential industries, and emphasised the patriotic duty of industrialists. In response, M.N. Roy put forward a People’s Plan, advocating land reform and the modernisation of agriculture. The Tatas were worried about land reform, and J.R.D. lobbied the Constituent Assembly, then drafting the Indian constitution, against the abolition of large holdings without compensation to landowners. The right to private property was duly enshrined in the constitution. The consequences of the failure of the new Indian state to enact radical land reform persist to this day in the form of widespread rural poverty.

Neither the Bombay Plan nor the People’s Plan was carried out. The new state wanted control over economic planning, and in response the Tatas pursued a twofold strategy, trying to raise capital independently in the US and proposing ‘joint enterprises’ with the state, offering expertise in return for investment in an effort to get ‘state support without state discipline’. They weren’t getting very far with their American connections until a new state-owned steel plant was built at Bhilai with Soviet money and expertise. A fever of Cold War anxiety broke out, and US capital finally began to flow. This enabled J.R.D. to expand Tata’s own steel production at Tisco, with the help of a loan from the World Bank. The company continued to object to state regulation and planning, but when Indira Gandhi suspended constitutional freedoms in 1975 for a two-year period known as the ‘emergency’, the Tatas and Gandhi’s Congress administration made common cause against communists and trade unionists. J.R.D. was, it turned out, willing to support authoritarianism, at least when it protected the interests of capitalists.

Raianu’s​ book ends in the 1970s. The Tata group is still today India’s largest conglomerate, though since the liberalisation of the Indian economy in the 1990s, the Tatas’ plans have continued to meet opposition. In 1996, when the group attempted to open a second steel plant in Orissa, once again on Adivasi land, there were protests against its coercive methods of land acquisition, forcing it to use a different site. Ten years later, there were similar protests about the new site too. This time the police fired on protesters, killing twelve Adivasis and injuring many more. That same year, 2006, the Tatas tried to acquire another site, at Singur in West Bengal, to build a factory to manufacture a low-cost car, the Nano. The government planned to acquire the farmland on behalf of the group under the Land Acquisition Act, the same law that had facilitated the building of Jamshedpur. After sustained protests, the Tatas eventually decided instead to open the factory in Gujarat, whose then chief minister, Narendra Modi, extended an eager welcome.

Even as it was having difficulties expanding in India, Tata was making large global acquisitions, including in 2007 the Anglo-Dutch steel manufacturer Corus. The deal left Tata overstretched. Its domestic steel production operation had full access to Indian iron ore mines, but now that it was engaged in international steel production, and faced competition from China in particular, it had to compete for raw materials in a volatile global market. The group began to sell off smaller Corus operations, though it did try to hold on to the works at Port Talbot in South Wales (the Tatas had made a lot of their reputation as ethical capitalists when taking over Port Talbot). All this took place under the chairmanship of J.R.D.’s successor, Ratan Tata, who described his philosophy as ‘evolution rather than revolution’.

When Ratan Tata retired in 2012, the task of managing the Nano and Corus projects fell to the new chairman, Cyrus Mistry. But Mistry’s decision to downsize and consolidate as a way of dealing with the group’s troubles was unpopular with Ratan, who was now in charge of the Tata trusts, which held 66 per cent of the shares in the company. ‘Although legally prohibited from interfering with the operation of the group,’ Raianu writes, ‘the trustees began to exert behind-the-scenes pressure,’ and Mistry was finally dismissed in 2016. It became clear that the trusts, which the Tatas had long maintained were only there to serve the public good, had a vested interest in the running of the group as a whole. The rounds of legal action that followed Mistry’s dismissal caused severe damage to the Tata brand. The Nano wasn’t a success in the Indian market, and has been discontinued. In January this year Tata announced the closure of two blast furnaces at Port Talbot, a decision that will result in three thousand job losses and means that the UK will be the only G20 country that doesn’t make steel from raw materials.

Yet whatever trouble Tata got into over the Mistry controversy, it pales in comparison to recent scandals surrounding India’s other prominent capitalists. The Adani Group, which has risen to prominence under the patronage of Narendra Modi, has faced accusations of tax evasion, fraud and bribery. Similar charges have been brought against the Ambanis, who own Reliance Industries. The Tatas became successful in a political and economic milieu in which they had to position themselves in relation to anti-colonial nationalism and communism. In their charitable work, commitment to workers’ welfare and endowment of educational institutions, the Tatas were both making a case for capitalism and warding off the threat posed by labour organisers. Later Indian capitalists haven’t had to worry about such things. As the Port Talbot story shows, Tata always in the end bends to the demands of capital. But what the company does have, which its more recent rivals do not, is a historical consciousness to which the excesses of capital appear shameful. Commenting on Antilia, the 27-storey private residence of the Ambani family in Mumbai, complete with helipads, hanging gardens, a spa and swimming pool, a snow room, a garage for 168 cars and accommodation for six hundred staff, Ratan Tata said: ‘It makes me wonder why someone would do that … That’s what revolutions are made of.’