22nd February 1854 Cowasji Nanabhai Davar Started First Cotton Mill The Bombay Spinning Mills

The Way Of The Traveller
The story of the Indian entrepreneur is chiefly a tale of displacement and the ability to adapt.
By Seema Shukla

To shake off the fetters of ordinariness, the leaden weight of routine, and the slavery of convention, is to adopt the way of the traveller. We talk here of the commercial migrants, the Indians who displaced themselves or were displaced as they set out in search of new opportunities. They have filled the annals of India’s business history, these travellers. They have set up corner shops in every corner of the world, from Fiji to Kenya. They have seeded India and Indians with an energy that subsumes its other myriad worries.

So it was when the Parsis landed in Gujarat, surviving the loss of their Persian homeland to power Bombay’s cotton boom in the late 19th century. So it is today as thousands of dotcom entrepreneurs survive the loss of their technological roosts to offer a glum India their banks of energies. It is in our DNA, this ability to excel in times of stress and displacement. The Indian entrepreneur has always been a child of displacement and travel, getting a foothold first and then becoming a support base for the community that followed. The Parsis have always done that. So have the Marwaris, they who fanned out across India from their desert home in Rajasthan. As they did, they maintained organisations like the Marwari Relief Society to assist their own. The old ties of family and caste still bind our entrepreneurs, but as the globe-straddling Indian tech support structure shows, globalisation will make Indian entrepreneurial communities more inclusive than they ever were in the past.

Some migrations were forced, some were voluntary. Some had no choice, others travelled because opportunity called. The Gujaratis followed the Parsis into Mumbai but they did so of their own volition. So it has been with the Punjabis, the Keralites, and host of others who displaced themselves or were displaced. Whatever. The end result is the same.

Among the earliest travellers were the Nattukottai Chettiars, whose entrepreneurial trail can be tracked from Chennai to Burma, Malaya, Sri Lanka, and the Indo-China region in the 19th century. The 20th century witnessed the largest migrations from Indian soil. Indians left home in this period of time not just as indentured labour and sepoys, but as doctors, law students and software engineers. From Porbandar to Silicon Valley, from Bengal to London, we know of doctors who became hotel magnates, petrol-station clerks who became petrochemical tycoons-Swaraj Paul, L.N. Mittal and Srichand P. Hinduja in the UK, Kanwal Rekhi, Sabeer Bhatia and Gururaj Deshpande in Silicon Valley-the names roll on.

But it is now in the age of global opportunity that the Indian traveller stands on the threshold of the greatest opportunity yet. There are idols galore: people like Dhirubhai Ambani and Karsanbhai Patel, who used opportunities within; and people like N.R. Narayana Murthy who used opportunities without. As the managing director of DSP Merrill Lynch, Shitin Desai, says: ”The 1990s have shown the Indian entrepreneur that there are huge local and global opportunities in India.” On the threshold of the golden age of Indian entrepreneurism, the travellers journey got just that much easier.

10 Entrepreneurs Who Changed
The Face Of Corporate India

1 Cowasjee Nanabhai Davar
The Inspiration To Invest
Davar inaugurated India’s industrial revolution. In 1854, he set up India’s first steam-powered textile mill in Bombay. Capitalised at Rs 5 lakh, the Bombay Spinning and Weaving Company paid a 10 per cent dividend for six years straight. Davar set the stage for the safety of industrial capital in India. Galvanised by his example, others too made industrial investments. Among them: the Wadias and the Tatas.

2 Sir Jamsetji Nusserwanji Tata
The Father Of India’s Industrial Revolution
Tata was the first Indian to understand the significance of the industrial revolution. At his swadeshi textile mill, he instituted pension funds and accident compensation. He believed India’s progress hinged around steel, hydroelectric power, and technical education. He inspired creation of the Indian Institute of Science-formerly Tata Institute-in Bangalore. In 1900, when he was 60, he set up Jamshedpur Steelworks after learning steel-making in Europe.

3 V.O. Chidambaram Pillai
The Steamships That Cried Freedom
Pillai was a nationalist who entered business to prove a point as much as to make profits. His Swadeshi Steam Navigation Company Ltd broke the monopoly of British shipping in coastal trade with Ceylon. VOC, as he was popularly called, was a radical Congressman who was arrested in March 1908 on charges of sedition. He was finally released in 1912. Pillai inspired an entire generation of conservative southerners to plunge into business.

4 Rai Bahadur Mohan Singh Oberoi
The Brown Sahib’s Opportunity
In 1934 Oberoi mortgaged his wife’s jewels while scratching together Rs 20,000 to buy his British partner’s stake in the Clarke’s Hotel, Simla. He put in money while the Brits pulled theirs out, and a decade later, he was the first Indian to run a hotel chain. In 1965, he opened the first five-star international hotel in India in Delhi. Thirty-four hotels in seven countries later, Oberois was the first real Indian multinational.

5 Henning Hock Larsen
The Dane Who Never Went Home
One of a small flock of Europeans who refused quit India, Larsen and his partner Soren K. Toubro-both came here to set up a cement plant for a British employer-set up a company in 1938 that became India’s pre-eminent engineering giant. Larsen knew independent India offered much scope for his company and his skills. Worth Rs 5,400 crore today, Larsen’s push to manufacture it all in India sparked off an engineering boom that hasn’t quit. From nuclear plants to new expressways, Larsen’s stamp on India is indelible.

6 Dr. Verghese Kurien
Father Of The Unlikely Entrepreneur
Dr Kurien created Operation Flood, the largest dairy development program in the world. He made India the world’s largest milk producer. But most importantly, he put economic power in the hands of the producers, all 10 million families at last count. The Kaira District Cooperative Milk Producers’ Union, or Amul as India knows the giant, is modern and fleet enough to lord it over an array of multinational competitors. Humble farmers, and cowherds-they all have a stake in one of the world’s best dairy operations.

7 Karsanbhai Khodidas Patel
The Power Of The Grassroots
Patel knew no marketing, had no management qualifications and no collaborator, Indian or foreign, when he created the first Indian brand to humble the best multinationals. The saga of this Gujarat government chemist began with a 12-yard shed in his backyard in 1969. Worth Rs 2,440 crore today, Nirma’s cut-price detergent shook the likes of Lever. Patel, who speaks little English, inspired legions of Davids to do entrepreneurial battle with India’s corporate Goliaths.

8 Aditya Vikram Birla
The First Mogul of Globalisation
When MIT graduate Aditya Vikram Birla returned to India to be a part of his grandfather G.D. Birla’s sprawling empire in the 1960s, he could have gone with the flow. But when it took Indian bureaucrats 11 years to clear a refinery project, Birla did not believe it worth his while to work the licence raj. Instead, long before globalisation became a buzzword, he spread outward, setting up a textile mill in Thailand, later the world’s largest palm oil refinery in Malaysia. When he died in 1995 his group had 17 companies in 14 countries.

9 Dhirubhai Ambani
The Saga Of The New India
Truly an entrepreneur for the tumultuous, new India. Poor son of Gujarat village school teacher reached Aden at age 17 and worked as petrol station attendant. Mixing grand opportunism with extreme guile, he clambered his way up, manipulating the licence raj to his advantage. He created an equity cult by going to millions of small investors when the big bankers refused him money. He adapted as easily to liberalisation. At Rs 60,000 crore, there’s quite simply nothing larger than Reliance in India today.

10 N.R. Narayana Murthy
Messiah Of The New Middle Class
How many companies have 1,388 employees that are rupee millionaires and 72 that are dollar millionaires, including drivers and peons? Murthy’s miracle is not just that he and seven professionals built a tech powerhouse from Rs 10,000 as initial investment in 1981. He did it with middle-class values-hard work, humility, honesty and innovation-and inspired uncountable thousands on the good way to make money. And as the thousands clamouring to get into Infosys indicate, there is no better employer around.

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Created on Dec 27, 1995. Last modified Jul 21, 1997.

The Cotton Mills

Growth and Decline

Before the middle of the nineteenth century, India used to export cotton to Britain, and then reimport the textile. In 1820 the total textile import cost only Rs. 350,000. However, these costs escalated tremendously until in 1860 textile imports stood at Rs. 19.3 million.

The impetus towards the founding of a cotton industry came from Indian entrepreneurs. The first Indian cotton mill, “The Bombay Spinning Mill”, was opened in 1854 in Bombay by Cowasji Nanabhai Davar. Opposition from the Lancashire mill owners was eventually offset by the support of the British manufacturers of textile machinery.

By 1870 there were 13 mills in Bombay. Cotton exports grew during the American Civil War, when supplies from the USA were interrupted. At the end of 1895 there were 70 mills; growing to 83 in 1915. A period of stagnation set in during the recession of the 1920’s. In 1925 there were 81 mills in the city. After World War II, under strong competition from Japan, the mills declined. In 1953 there remained only 53 mills in the city.

The Cotton Boom

The growth of the cotton industry was spurred, and for a small time eclipsed, by the the cotton boom. Before the American Civil War, the mills of England imported only 20% of their cotton from India. With the blockade of the Confederate ports, Indian cotton prices rose. By 1865, when General Lee’s army surrendered, Bombay had earned 70 million pounds sterling in the cotton trade.

This money spurred on a financial bubble, with land reclamation schemes and the dock yards attracting huge investments. By January 1865 Bombay had 31 banks, 8 reclamation companies, 16 cotton pressing companies, 10 shipping companies, 20 insurance companies and 62 joint stock companies. Within two months the American Civil War ended and most of these companies went into liquidation. Large numbers of speculators became bankrupt. However, wealth had been created and this led immediately to an industrial growth.

Indian Entrepreneurship

The cotton mills of Bombay, and the rest of India, were owned and managed mainly by Indians. The initial investments came from families of the mill-owners, mainly obtained from trading. Later, when shares became available to the public, much of the ownership still remained Indian. As an example, of the 53 mills in the city in 1925, only 14 were British owned. The management and directorships of these mills were also mainly Indian. Of the 386 directorships recorded in 1925, only 44 were English.

Social Dimensions

The rapid growth in mills was sustained by a large migration of mainly Marathi speaking workers into the city. Most often, the male member of the family would work in Bombay, leaving the rest of the family in the village. These workers were initially accommodated in hostels. Eventually, these chawls became tenements, with full families crammed into single rooms. The mills filled up Parel and then expanded westwards all the way to Worli.

The high density of population, coupled with low pays and insanitary living conditions caused high morbidity rates in Bombay. The infamous plague epidemics at the end of the 19th century only equalled the morbidity due to other diseases. The efforts of the City Improvement Trust to better living conditions was only partially successful. Many of today’s slums are the byproducts of the cotton boom; as much so as the Victorian Gothic architecture of the Fort area.

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