These articles are created with for light reading just before the lights are out and should be taken in a lighter tone.
Within the Indian Business landscape, Tata Group is not just looked upon with awe for its sheer size and diversification, but also for its strong code of Business Ethics. In fact, Tata Steel plant at Jamshedpur was the world’s first factory to introduce an 8-hour work week which is now been adopted by the international labor organization. Another example was more recently during the 26/11 Taj attack. The Taj staff had locked many of the rooms from the outside with the guests inside to give the impression the rooms were empty, in spite of putting great risk to their own lives.
In this piece we are going to talk about a legacy they are not so well known for, but yet it is a very important to the founding of the group.
The Founder of the group is considered to be Jamsetji Tata, He is attributed for his contributions as “the father of modern industry”. He is considered as the force behind grand projects as the TATA steel plant in Jamshedpur (The city is named after him), IISC India’s best university, Tata Hydroelectric Power Supply Company which today is India’s largest power company Tata Power and the famous Taj hotel in Mumbai.
Though interestingly with an exception of the Taj hotel he had passed away before the setup of the other organizations, yet he is credited as the founder of the enterprises, also he was not the main financier of these projects.
The person who was financier and instrumental in setting up these industries was Ratanji Dadabhoy Tata. Surprisingly he isn’t credited as one of the founders or even as one of the directors of the industry. There is a reason to this, he made most of his fortune in the very controversial Opium Trade. In the late 19th century and early 20th century, the opium trade was legal in India but not in completely in China. It was considered extremely controversial in both countries for the following reasons.
In India, opium cultivation was forced upon the local farmers by the zamindars as it was extremely profitable. This lead to great famines like the Bengal famine which had a death toll on the local population far exceeding the numbers of other comparable human tragedies of its time like the Holocaust. Millions died every year in these famines as there was less grain production in places like Bengal as they were replaced with opium production.
- In China, the narcotic had a destructive effect on the local population. The Qing dynasty ruling China tried to have it outlawed which led to the British government declaring war on China and the corresponding humiliating losses in the Opium wars bought China to near ruin and was ransacked by the western powers for their profit. The humiliation in the Opium wars and the inability of the crown to stop the flow of opium into China was the primary reason for the Boxer rebellion and the overthrow of the Qing dynasty.
- India and China had been historical neighbors and powers in Asia for over five millennia and had never gone to war in that period. The opium war which British India waged on China was the first break of peace between the two nations. The McMohan line drawn between the Sun Yat Sen’s Republic of China and British India was not accepted by Communist China. Which even today is disputed by both sides.
In these tumultuous times, R.D Tata wasn’t just an opium trader. He was actively involved in lobbying the British government in arm-twisting the Chinese to benefit his narcotics industry. Provided is a reference from the archives of the Hong Kong government a petition filed by him and other prominent opium traders like David Sassoon to complain about the HK legislative council of how the new policies were affecting their trade (Reference).
This is why he is hardly mentioned in the history of the Tata Group. An organization he actively financed and setup. Though in the end, his son JRD Tata ended up inheriting the Business Group.
This brings us to a confusing conundrum on how to judge the Tata Group today. A parallel example will help us. Consider this hypothetical example India’s most notorious gangster who resides probably in Pakistan. Uses his influence with the Pakistani Government to stoke discord between the two nations in hopes of progressing his narcotics and underworld activities in India. In saying the near future with the fortune he has generated from these activities transforms his present organization D-company into a completely legitimate and admirable business. Would we over the years forgive the company and forget its past deeds.
Bonus Fact – The Indian parliament under the influence of Feroze Gandhi (Indira Gandhi’s late husband) was on verge of nationalizing TELCO (today known as TATA motors). The subject lost importance in the parliament because the Chinese had launched a surprise invasion in 1962. This saved TELCO from the fate of TATA airlines which had priorly been nationalized into Air India.
