The idea of ‘economic swadeshi’ emerged by the second half of the 19th century. Gopal Hari Deshmukh was one of the firsts to advocate economic swadeshi in 1849. But the credit for translating it to a call to action goes to the ‘college faction’ of the Arya Samajists in Punjab.
A group of middle-class, western-educated Punjabis– prominent among them were Lala Lajpat Rai, Lala Harkishan Lal, and Sir Dayal Singh Majithia came together to found the Punjab National Bank (1894). This was the first major Indian-owned bank.
Lala Harkishan Lal, who launched a series of joint-stock companies. These included insurance firms like Bharat Insurance was the first major Indian-owned insurance company.
In Bombay, a Parsi lawyer Ardeshir Burjorji Sorabji Godrej (1868-1936) came to realise the importance of indigenous manufacturing. After failing in a series of ventures, he tasted business success with mechanised locks and founded Godrej & Boyce in 1897.
Acharya Prafulla Chandra Ray (1861-1944), a pioneering chemist, founder of Bengal Chemicals (India’s first pharmaceuticals company), and a devoted nationalist spent his entire life (and life’s savings) in promoting education and scientific research and in advocating knowledge-based industries to address India’s poverty.
In Bengal, at least since 1867, when some members of the Tagore family helped Nabagopal Mitra to organise a fair to promote swadeshi enterprises.
Bhagyakul Roy who developed a flourishing trade in rice and jute, and were the chief organisers of the Bengal National Chamber of Commerce (1887).
Jyotirindranath Tagore who launched a major venture in 1884 with his Inland River Steam Navigation Service.
The announcement of the Partition of Bengal (1905) unleashed a surge of nationalism and rekindled the Bengali entrepreneurial spirit.
Members of the Tagore family, including Rabindranath; Satish Chandra Mukherjee’s Dawn Society, and many others were regularly organising Swadeshi fairs, setting up shops to sell swadeshi goods (Rabindranath’s Swadeshi Bhandar in 1897, Jogesh Chandra Chaudhuri’s Indian Stores in 1901, Sarala Debi’s Laksmir Bhandar in 1903), and working for the revival of the traditional crafts.
Landlords and professionals came together to found the short-lived Bengal National Bank (1908). Calcutta also saw a spate of insurance ventures, especially the National Insurance Company (1906) and the famous Hindustan Cooperative Insurance (1907).
British dominance of shipping lines was a matter of deep discontent, especially in riverine East Bengal.
Despite the collapse of Jyotirindranath’s venture, swadeshi days saw renewed interest in launching shipping ventures.
But they were unable to withstand brutalrate war unleashed by the English shipping lines, where as many as twenty Indian shipping companies failed between 1905 and 1930.
Bengal’s leading landlords, businessmen, and political leaders came together to launch the most high-profile swadeshi venture – Banga Luxmi Cotton Mill (1906).
The real achievement of the Bengali swadeshi entrepreneurs was to venture into new industries based on their technical knowledge.
Most of these ventures ended in failure. They were built on the limited finances of petty landlords and the savings of professionals. They had the technical knowledge but not always the business acumen to deal with supply bottlenecks or distribution challenges.
They were often more focused on developing technical knowledge, replacing foreign goods,
and contributing to nation-building.
Emergence of Modern Banking
In the wake of the swadeshi spirit, different groups of people across the country came to the same conclusion as that of the Arya Samajists in Punjab and what thinkers like Bholanath Chandra advocated in Bengal earlier– the central role of finance in creating an indigenous business ecosystem.
A large number of Indian banks were founded between 1900 and the First World War (1914-1919), and helped to extend modern banking facilities to Indian customers, but due to the lack of managerial experience, most of them failed.
Swadeshi in Everyday Lives
Boycott of foreign goods and the use of India-made products– the trend that started in Bengal in 1905, spread to the rest of the country with Mahatma Gandhi and his advocacy of khadi. With rising nationalism, there was a definite change in consumer culture too.
Irrespective of whether they were actively participating in political movements or not, people wanted to use India-made/local products as a badge of their patriotism. This also led to the emergence of a swadeshi retail network.
Business ventures also appealed to patriotic feelings or Indian sensibilities– Banga Luxmi proclaimed that they offered Bengali cloth, manufactured in a Bengali factory by Bengali workers and sold through shops owned by Bengalis.
Godrej promoted their soap as the first vegetable soap in the world and it was endorsed by none other than Rabindranath Tagore.
All Indian sugar companies insisted that their swadeshi sugar was ‘pure’, meaning no chemical had been used.
Thus, production, distribution, advocacy, and usage of such products (even when of inferior quality and costly) became an extension of one’s patriotism and a way to contribute to nation-building.
After the First World War, a large number of Indian businesses made the crossover from trading to manufacturing.
The emergence of Mahatma Gandhi with his credo of non-violence and the idea of trusteeship found deep resonance with the Indian business elite.
By the late 1930s, it was clear that the days of the British Raj were numbered and the nation-building had to be a joint exercise between the political and industrial leaderships. There are two major landmarks in the evolution of this relationship:
In 1938, Congress President Subhas Chandra Bose set up a National Planning Commission under the chairmanship of Jawaharlal Nehru.
In 1944-45, eight leading industrialists came out with a blueprint for independent India’s economic development. This ‘Bombay Plan’ outlined the strategy for doubling of the agricultural output and fivefold increase in the industrial sector within 15 years.
They accepted that without State support this would not be possible. Though it was never officially accepted but the post-independence economic planning did follow the same path of State interventions and a mixed economy with large-scale public sector.
Apart from the handful of material successes like Godrej or Cipla or Alembic or (a much-diminished) Bengal Chemicals, and a clutch of PSU banks, what are the legacies of swadeshi business enterprises?
Right from the late 19th century, the general trajectory of Indian business has been a shift from trading to manufacturing. Taking advantage of their accumulated capital, control of distribution and raw materials, large traders belonging to traditional trading communities gradually shifted to entrepreneurship.
Bengal during the Swadeshi days saw for the first time, a concerted effort by educated middle-class entrepreneurs to build businesses based on their technical knowledge. Similarly, modern banking in India developed due to the efforts of these Swadeshi inspired entrepreneurs.
Since then, we have repeatedly seen this trend of new waves of entrepreneurs, creating disruptions based on their technical knowledge.
Evaluating Lala Harkishanlal’s contribution, all his ventures ultimately failed but his real contribution was the transformation of the Punjabi middle class– he showed them the way to shift from traditional commerce to modern industrial and financial sectors.
This could be said about the swadeshi phase of Indian entrepreneurial history in general.
It expanded the social base of the Indian business class, showed the youth a constructive way of contributing to nation building, and provided tremendous inspiration for future generations.