Colonial Firms and the Decline of Colonialism in Eastern India 1914–47

Abstract

The spectacular decline of the expatriate business houses of eastern India in this century is one of the many underdeveloped areas of Indian economic history. The extent of the decline itself seems hard to exaggerate. In 1900 almost all the commanding heights of the colonial economy appeared to the dominated by expatriate and foreign firms, most of them British. Not only was the foreign trade of Bengal almost exclusively in their hands, but so was the industrial and banking structure. In addition, most historians of the period have stressed that the expatriate sector was able to dominate internal trade, operating in amonopsony position in regard to cash crop production and marketing and also, thanks to its contacts with government, the railways and the port trusts, to enjoy hegemonic powers that impeded the development of indigenous rivals. Thus, as A. K. Bagchi has stressed, 'social discrimination was complemented and supported by political, economic, administrative and financial arrangements which afforded European businessmen a substantial and systematic advantage over their Indian rivals in India.' The fate of the expatriate groups since 1950 has beenvery different. Many suffered considerable depredations during and after the second world war, losing important sectors of their business to Indian rivals, and even being bought out entirely by native enter-prise. Such expatriate interests as survived after Independence have generally failed to perform well. Their recent history has been agloomy one of a steady erosion of profitability and viability, so that most of those that still remain are now taken seriously only by a new generation of indigenous speculators and asset strippers.