Thursday 26 December 2013

CONCLUSION - Present Day Relevance

CONCLUSION - Present Day Relevance

As Indian economy became more liberalized since the beginning of 1980s there has been a spurt of entrepreneurship across the country. The IT boom since 1990s did not see any major Marwari business house taking to it.

As caste barriers reduced and movement of people across he country increased English and Hindi came to be spoken understood across the entire country. With improvement in banking and telecommunication today one no longer faces the communication barriers which early Indian entrepreneurs faced.

India is supposed to have one of the best eco-systems today and 60% of the start-ups are from individuals with less than 5 years of work experience. There are a number of venture capitalist with access to funds from India and overseas who are eyeing these start-ups and not only fund their ventures but also help them in executing their plans and help them sail through the first few difficult years of setting up an enterprise.

Social networking has enabled aspiring entrepreneurs to connect to people of similar ideas and even find mentors across the globe who would be able to provide an input.

Resource group, access to capital etc which have been cited as the success to Marwari enterprise are today at the disposal of any aspiring entrepreneur.

Then how relevant is the Marwari enterprise today?



The Bengali nationalist Prafulla Chandra Ray's autobiography (1932) is a well-known text documenting a modern Bengali ambivalence about the Marwaris. Ray unfavorably compared the more fiscally conservative Marwaris with the urban Bengali gentry. The former, Ray argued, earned a thousand times more than they actually spent; unlike the anglicized Bengal Zemindars, the Marwaris were "mere parasites" who "do
not add a single farthing to the country's wealth, but have become the chosen instruments for the draining away of the country's wealth—the lifeblood of the peasants—to foreign lands." Despite his stated admiration for the Marwari penchant for hard work and business aptitude, Ray criticized Marwaris for not reinvesting their wealth back into the Bengal economy.

Even the Marwari diet, argued Ray, contributed to the economic drain. The Marwaris "survived" on dal, ghee, and wheat flour‚‚all items imported from outside Bengal. He wrote: "Whatever they spend finds its way back into their own pockets. Hence the Marwari or the Bhatia or the Punjabi, although they make their money and live in Calcutta, seldom add any wealth to Bengal nor is Bengal in any way materially benefited by their being residents of Bengal. They might as well have been residents of Kamchkatka or Timbuctoo."

PC Ray's comment about siphoning of Bengals wealth might have been relevant in the pre-independece era when India as a country did not come into being as a Sovereign country or due to over-romanticizing of a nationalist Bengali vouching for its region. However the community led government in Bengal couldn't do any better while in power post-independence. He would have been rather distraught after his founded company 'Bengal Chemicals' became un-manageable after his death and had to be nationalized by the Indian Govt.

Even the former Prime Minister of India JN Nehru commented in a rather helpless tone "Giving the drawbacks of the Marwari community and their ingenious practices they are still keep the money within the country and want their ashes to be immersed in the Ganga"

Wednesday 25 December 2013

CONCLUSION - Limitations

CONCLUSION - Limitations

The 'bazaar' market was the grounds for capital accumulation for the Marwari community. As capital got accumulated through trading and speculation same were invested in the manufacturing sector which was a natural extension of the the bazaar which but then had become an essential part of the Marwari culture and identity.

In an economy where manufacturing licenses were hard to come buy and the government controlled all aspects right from the quantity of a product produces to the price it was sold in the market the ingenious accounting system of parta developed by the Marwaris proved successful in the manufacturing sector during the license raj.

The 'Ambassador' car manufactured by a Birla owned enterprise Hindustan Motors between 1950-1970s having a 'steering mechanism with the subtlety of an oxcart, guzzled gas like a sheik and shook like a guzzler became a symbol of India's sluggish Industrial sector where the marwari community had a major share.

Altough some critics might argue that Marwari enterprise flourished during this time next generation family members like Aditya Birla established Industries outside India in Indonesia and Malaysia to become global market leaders their respective Industry.

Another Limitation of the Marwari enterprise came was when the business reached a sizable level the promoters of the company would deploy family members at key decision posts which led to reduced accountability and discourage other people in the organization who would be worth that post.


CONCLUSION - Family Names

CONCLUSION - Family Names

Until mid-nineteenth century Hindus all over India did not use family names. It was their first name followed by the fathers name which was commonly used. As the British used family names extensively families who came in touch with them and migrated to British controlled regions also adopted the system of using family names.

Traditional Marwari names provide many examples of the relationship between lineage and geographical aspects of identity, as well as connections to trade and occupation.

1. Lineage: Names formed from the suffix '-ka' being added to a nickname for eg. Himmatsingka would relate to an ancestor named "Himmatsing" who became opoular in the society and his successors came to be known as  "Himmatsing Ka Beta" or "Himmatsing Ka Pota" literally meaning  "Himmatsing's Son" or "Himmatsing's Grandson". Family names like Murar-ka, Goen-ka, Harbajan-ka, Harlal-ka. Khem-ka are some examples of prominent Marwari names which originated from an ancestor.

2. Geographical Location: Named formed from the suffix '-wala', '-wal' or '-ia' being added to a nickname would relate to the family last village/town of migration while migrating within Sekhawati region. for eg. Tibre-wal comes from tiba, a village in Khetri. Jhunjhun-wala, Dumre-wala, Khandel-wal, Ganeri-wala, Kanod-ia, Didwan-ia, Patod-ia, Ber-ia, Manglun-ia, Makhar-ia, Murmur-ia, Garod-ia, Singod-ia, Bagar-ia, Sultan-ia, Parasrampur-ia, Singhan-ia, Sanganer-ia etc can all be traced to existing villages in the Sekhawati region.

Some Bania families form 'Bhiwani' region of Haryana role to prominence in the trade circles used 'Agarwalla' or 'Agarwal' as their official family name however they continue to be referred to as Bhwani-wala (pronounced as bihani-hala) by the older members of the community.

3. Occupation: There is no thumb rules to family names originating from occupations. Here are a few examples and their meaning

a. Modi: This family name is used across by Parsis, Gujarati Banias and Marwaris. Modi means 'Official Supplier'. Armies maintained by the princely states shifted from region to region to fight wars hence a Modi was appointed as the official supplier to the army who was responsible of arranging for provisioning and ratio for the army wherever it set its camp.

b. Todi: The name comes from the word 'toddy' which is country liquor. As the British established cantonments in different parts of India supply of good quality alcohol was needed to keep the troops entertained. Until then their limited required which was confined to establishment at sea ports was met through imports. Shortage or lack of alcohol availability in the country side often lead to soldiers falling for illicit liquor and poisoned themselves. Hence Todi was appointed to ensure supply of quality country made liquor to its troops.

c. Poddar: Those who financed the state against right to collect land-revenue.

d. Ruia: Supposed to be derieved from Cotton

e. Saraf: Again a name found commonly in Gujarati and Parsis in the form of 'Shroff'. With the plethora of currency in circulation during pre-british times the money changer was reffed to as a 'Shorff' and its occupation as Sarafi. 

4. Miscellaneous: Decendents of Nawab 'Kaim Khan' established estates of Fatehpur and Jhunjhunu in 15th Century. 'Khemani' a popular family name among Marwari families suggest these families had connections with these nawabs. Aggarwal Choudhris of Fatehpur were intimately connected with these Nawabs.

Use of 'gotra' like Mittal, Bansal, Singhal etc have also been in popular usage. In recent times traditional Marwari names have also been replaced simply by 'Agarwal'

Tuesday 24 December 2013

OCCUPATIONS - Betting or Gambling?

OCCUPATIONS - Betting or Gambling?

Rain Gambling or "barsat ka satta" has they call it in Hindi was introduced to Calcutta public life by the Marwaris sometime in the nineteenth century, either by the 1820s (as Marwaris claimed) or by the 1870s (as the colonial government claimed). Rain gambling was confined to Cotton Street in the heart of Burabazar in northern Calcutta.

During the rain gambling season, corresponding with the monsoon rains, dozens of people all negotiating with the Marwari-financed brokers who handled bets on how much rain would fall during a certain period of time and when. The rain water was collected in the so-called "Calcutta rain gauge ( means "drain"). The term "Calcutta " suggests the pan—North Indian character of the practice, and may allude to its site of origin.

Anti-gambling legislation in British India initially took effect only in the three major cities of the colonial presidencies (Bombay, Calcutta, and Madras) after 1856. Subsequent pieces of legislation expanded the geographical jurisdiction of the law to outlaw gambling within ten miles of any railway station house in the (country stations and districts). But the major problem the British faced in such legislation was crafting a legal definition of gambling.

Marwari practices of "rain gambling" came to the attention of the Bombay Legislative Council several years after the passage of the general Anti-Gambling Act of 1886, when a group of Bombay Marwari rain gamblers took their case to the High Court. The court ruled that gambling on the rainfall did not fall under the scope of the 1886 Act. Rain gambling, the defense had argued, operated on the principles of betting (which was legal),not gambling (which was illegal). The precedent used in the case was the 1889 Bombay High Court case of, which held that rain gambling was a form of betting and not a form of gambling.

In short, the distinction held that gambling required persons to take an active role, whereas betting did not. If it were to be classified as actual illegal "gambling," the so-called rain gambling required a contest and active participation, which could not be proved in persons merely watching the rain fall. Rain gambling was defined as a monsoon event, when bets were placed on the amount of rain that would fall within a three-hour period, a period of time known in Hindi as In order to calculate the precise amount of rain that had fallen, a tank was
fitted with a spout from which the rainwater would overflow once a certain amount had fallen. Rain gambling, the defense argued, was really just a form of betting on a contingent event, without any kind of contest acted out between two persons. The defense argued that it was simply not possible for anyone to take an active role in the event, since rain gambling involved placing a bet, and then just watching and waiting to see if, when, and how much it would rain.

Even though laws had already been passed in England that outlawed wagers, bets, and gaming houses, similar laws had not been passed in India. This was partly because traditional Hindu law had permitted
such wagers.

As existing anti-gambling law could not include rain gambling in its scope. A new act was then proposed that would specifically target rain gambling in Bombay.One of the official reasons for banning rain gambling in Bombay was that the practice had reputedly spread to other communities. The fear that rain gambling networks would now lure non-Marwaris, even poor Europeans, became a sufficient reason to attempt to put it out completely.

The passage of anti-rain gambling legislation in Calcutta did not go unnoticed by Marwari merchants. On the evening of March 25, 1897, a large group of Marwari merchants gathered in what newspapers described as a "monster protest meeting" at the Dalhousie Institute, a well-known Calcutta social club. The purpose of this unusual meeting was to protest the rain gambling bill under consideration by the Bengal Council.

While the 1897 rain gambling act did effectively put an end to large-scale rain gambling operations, other forms of gambling arose in the place of rain gambling, possibly operated by the same brokers and dealers who had managed the gambling on rain. By banning rain gambling and attacking opium-figure gambling as well, the government may have counted on the "native instinct" to gamble to encourage former rain-gamblers to take up gambling on the government opium exchange, thereby increasing the government's revenue.

Despite the immense popularity of gambling and speculation as Marwari pastimes, these activities are seldom acknowledged in Marwari narratives of self-description, such as business, caste, and family histories. People peak  generally about the prevalence of speculation but are reluctant to speak about specifics, particularly regarding their own families. Biographical materials on various Marwari families also do not acknowledge,
at least openly, that fortunes were built from gambling and speculation. In fact, family history accounts often attempt to boast that the family's wealth did arise from speculation.

OCCUPATIONS - Industry & Manufacturing

OCCUPATIONS - Industry & Manufacturing

Raja Govindlal Pitty, a leading Marwari merchant and banker of Hyderabad & Bombay bought over cotton mills in the 1870's

During the 1st World War, encouraged by a lack of competitive imported goods from abroad and government assistance, Indian industrialization took on some impetus. In eastern India for the 1st time major enterprise emerged that were Indian-owned. In trade too, Indians, among them Marwaris expanded their share.

Until World War 1, Marwaris had not been prominent in Industry. The early Bombay cotton textile factories were all founded by Gujrati Banias and Parsees. The Brilas were in the forefront in Industrialization of all Marwaris. It was estimated by an insider that they increased from a party Rs.20 lac to Rs.80 lac during the war. They went on to establish their first Jute mill in Calcutta in 1919, Cotton Textile Mill in Delhi in 1920 and started Gwalior Cotton Textile mill in Delhi in 1921.

At the dissolution of the Currimbbhoy and Petit Cotton mill group in the 1930's several of their Bombay mills were taken over by Marwaris.

The protective tariff for sugar in 1932 led to the construction of a large number of sugar mills. Government encouragement helped the cement Industry. Birla built 3 giant sugar mills and Dalmia built 1. Ram Kishen Dalmia became a major factor in the Cement Industry.

Resistance to the Industrial drive was however encountered. The Jute Mills Association refused to admit the Marwari owned mills, and the jute transport companies charged them discriminatory rates. But then economic strength of the large Marwari houses eas such that they were able to overcome these obstacles. 

OCCUPATIONS - Commodities Trading & Speculation - Jute

OCCUPATIONS - Commodities Trading & Speculation - Jute

Jute has been grown in East Bengal for ages. Since 18th century it has been exported to Dundee in Great Britain from Calcutta where it was woven into hessians (woven-cloth) or sand bags and used by the Army in trenches during War.

Jute was either sold to mills in Calcutta or shipped abroad. With a few exceptions the mills bought through European agents, and Indians could only under broker them. European brokers received 1.25% commission on purchase of raw material out of which 0.25% was passed on to Marwaris who acted as under-brokers or guaranteed broker.

The Jute Balers Association of Calcutta had both European and Indian members, but was entirely dominated by the Europeans among them. By 1900 there were 74 balers on its rolls, of whom 49 were Marwaris. The Marwari balers and brokers found it difficult to be admitted to the Royal Exchange where Jute transactions were made. By 1909 an effort lead by Sir Badridas Goenka and other leading Marwari merchants resulted in the formation of the Baled Jute Association, which provided facilities for Marwari trading in Jute.

By 1895 Scottish Jute Mill owners operating mills in Dundee established mills in Bengal. In the immediate pre-World War 1 period and during the way itself, Marwaris also entered hessians trade, formerly a European preserve.

In 1917, the Birla Brothers established the first Indian office for the export of Jute in London and rapidly became 1 of the 3 leading Jute exporters. The office had to fight hard to get into the market and was not admitted to the "official"? Baltic Exchange for several years.

Speculative gains recieved by various Marwari businessmen enabled some of them to start industries right after the World War 1. GD Birla and Sarupchand Hukumchand of Indore started Jute mills in 1918-19. These were the 1st large Indian Controlled Jute Mills.

Friday 20 December 2013

OCCUPATIONS - Commodities Trading & Speculation - Cotton

Commodities Trading & Speculation - Cotton

In 1788, the Governor General (at Calcutta) was requested by London to encourage
growth and improvement of Indian cottons to meet the requirement of the Lancashire
textile industry.

By 1793, the Court of Directors of East India Company in London revised their policy to

a. Increase import of raw materials
b. Increase the export of British manufactured goods.

By 1850, India accounted for almost one-sixth of the total textile exports from England and also became the largest consumer of British textiles. India was thus reduced from the position of a supplier of manufactured cotton goods to that of a supplier or raw cotton, for the British textile mills.

In 1820's the ryotwari system of land revenue was introduced in Madras Presidency. In the later years it was extended to Bombay Presidency. In the ryotwari system every registered holder of land was considered a Propritor and paid directly to the government.

It was introduced as an alternative to the zamindari system of land revenue which was practiced in Bengal Presidency which had generated a class of pest like blood sucking landlords which did not contribute significantly to the overall revenues.

The ryotwari allowed the landowner to gift, sale and mortgage his property. This allowed the land owner for the 1st time in history to obtain a cash loan against land.

As land now became a collateral Marwari money lenders who made inroads into cotton growing region for financing cotton cultivation.

When American Civil war broke out in 1861 there was a widespread belief in Britain that the supply of cotton from subsidiary sources especially India would keep the mills running. However in reality the total quantity of raw cotton imported into Britain from India was merely 20%.

The reason for this was the short-staple cotton grown in India was unsuitable for British Mills which were equipped for use of American long-staple variety.

The government stepped up measures to cultivate cotton in India. Under an executive order wasteland owned by the government could be acquired and held in fee simple by their owners and their heirs in perpetuity. This enabled Marwaris to amass huge land holdings which stayed with them until the Land ceiling act was imposed in 1976

By 1860 railroads from Bombay had extended until Nagpur trespassing Vidharbha region. This region having deep black soil and scanty rainfall coupled with railroad access to Bombay Port proved ideal for cultivation of cotton.

Moneylending for cultivation of cotton enabled the Marwaris to obtain tighter controls over the cultivators produced which led to natural extension into its trading and ginning. The prices of cotton increased manifolds which made farmers cultivate cotton instead of food grains and at times they even plowed down food crops to sow Cotton

The news of American Civil ware coming to and end reached India on 1st May 1865 and Britain again turned to American for raw cotton ending the short-lived glory of the Indian saple. Some business families laid the foundation of a stable and prosperous business on the basis of the profits earned in speculation during the Civil War years.

Sunday 1 September 2013

OCCUPATIONS - Commodities Trading & Speculation - Opium

Commodities Trading & Speculation - Opium

English East India company increased purchases of Chinese Tea following Pitt’s commutation Act of 1784 which lowered the duty on tea. Export of raw cotton from India to China which until then was used to finance purchase of Chinese tea was unable to keep pace with its increasing imports in Britain. The solution was eventually provided by opium.
Malwa was well known for its opium since the 16th Century. The massive expansion of opium expansion of opium exports from Bengal to china in the closing decades of the 19th Century drew Indo-Portuguese and Indian traders to this alternative source of supply.  Peasants in Malwa received prices 3 times as high as in Bengal where opium trade was a state monopoly.

Between 1805 and 1821, Daman was the main outlet for Malwa opium however the big opium dealers conducted the trade from Bombay. The British government made strenuous efforts to limit the Malwa trade which it could not monopolize like that in Bengal, but was un-successful.
From 1830, the government stopped its restrictive efforts and turned instead to encouraging Bengal’s production and imposed a high duty on Malwa’s production. Rapidly Malwa opium became the major exported, and Bengal moved to the second place.

The expansion of poppy cultivation and opium trade brought into being other powerful groups of vested interests having an enormous stake in this given economic system. Of these the most important were the class of money lenders cum small traders (sahookars), the native agents connected with the native firms and the wholesale merchants. These were classes heavily composed of immigrant merchants from Rajasthan and Gujarat. 

In early 19th Century several tens and thousands of Marwari merchants settled in the Opium tracts of MalwaIt contained a fair proportion of Shekhavati Aggarwals connected to prominent merchants in Calcutta. Opium soon became a major commodity for the local Marwari firms. The books of “Sevaram Ramrikhdas”, a Marwari firm based our of Mirzapur in 1830’s show Opium to have been their major commodity. Another prominent Marwari firm “Tarachand Ghanshyamdas” had branches all through the opium tracts of Malwa.

The rapid oscillation in opium prices, compounded by the unstable conditions of exchange between India and China, where the opium was sold, rendered the opium market particularly unstable. The fact that their fellow Marwari’s were already doing considerable business in Opium in the Malwa area, made the futures operations a natural extension for Marwari’s. Regular opium futures trading by Marwari’s in Bombay and Calcutta seems to have started in the 1830’s. It was in opium futures trade that several of the first Marwari fortunes were made

By 1872 telegraph services reached Jaipur. Calcutta Marwari merchants wired the current rates for opium to Jaipur.  Agents in Jaipur used a system of mirrors to flash the rates from hilltop to hilltop.
From the final hill outside of Jhunjhunu a runner would come to the city and inform the merchants of the rates. At night, If the information needed to be supplied, gunpowder explosions were deployed along the same route. By 1896 telegraph had come to Churu and Sikar. The trans-regional speculation networks worked very well and profitably for several decades. 

Opium sales were Legalized in Hong Kong in 1845 after the British defeated China in the 1st Opium War. Having gone through a period of lull during the years of the Opium War the opium trade was in full blast after the 2nd Opium War from 1860 onwards. Calcutta became an important market for opium speculation after its auctions in Bombay were discontinued in 1830.

Shivnarain Birla, grandfather of Ghanshyamdas Birla began his career was an independent opium speculator and for 10 years perfected the art of opium speculation in which he made large gains. In 1896 four marwari firms, “Devibaksh Jivanram’, ‘Ramnarain Bhojraj’, ‘Daulatram Lakshminarain’ and ‘Shivnarain Baldeodas’ came together in a room at Kaligodam Number 18, Mullick Street in Bara Bazaar to form ‘Bare Chaurastiya’ (the Gang of Four) who speculates in Opium. Afeem Chaurasta Ki Panchayat enjoyed complete Juristicion over the Marwaris engaged in the Opium trade.

This later took form of a Cartel led by Sarupchand Hukumchand and Harduttrai Chamaria which enjoyed complete monopoly on Opium trade. So fervent was bidding that at one such sale in Calcutta in 1845 two speculators took the price to a phenomenol Rs.1,30,995 per chest compared to the average price which ranged between Rs.400 to Rs.450 per chest. Swarupchand Hukumchand conducted Rs.50 lakhs business on the day he opeaned his calcutta office in 1915 and by the end of the year he was worth Rs.1 Crore.

Widespread Marwari speculation on the exchanges helped raise the price of opium to levels that were highly profitable to the colonial state. By 1925, the export of Opium had greatly diminished, and the speculative market in Opium figures had come to a hald because there was no longer enough fluctuation in the price for bookmakers to profit from taking bets on the daily market price.
As a substitute for Opium, the bookmakers took bets on the average of several prices of cotton in the American market. 

OCCUPATIONS - Money Lending

Money Lending

In 18th century, land revenue was the only definite source of funds for the rulers. The rulers assigned revenue rights of a village or a group of village to rent collector in lieu of the latter’s guarantee to pay a fixed sum of money to the royal treasury. This enabled the ruler to dispense with elaborate revenue-collection machinery and gave free hand to the rent collector to collect maximum possible revenue.

The rulers however didn’t deal with the rent collectors directly and positioned a group of merchant money lenders (potedars) between themselves and the collectors.

The rulers used to borrow money from potedars and issue them money warrant along with the letter of credit. This letter used to be an order to the rent-collector to reimburse the money to the potedar.

Potedari was the earliest form of banking and finance wherein the money-lenders and rent-collectors used to collect money from people and also extend loans.
Rich merchants who used to lend money to the kings were known as potedars.
The word potedar was used by the Peshwa rulers and later picked up by the gaekwads who collectively ruled over Saurashtra, Malwa, Khandesh, Marathwada etc in present day Gujarat and Maharashtra.

Poddar” a popular last named used by prominent Mawari families suggest that they once used to function as potedars to such rulers.

During the same period at the other end of the country the erstwhile princly state of “Cooh Behar” a part of modern day West Bengal followed a similar system of land revenue which facilitated Marwari merchants in the region.

A “jote” was a revenue paying estate and the owner of it was caled a “jotedar”. Jotes could be had in the estate of Cooch Behar on payment of a fixed revenue to the maharaja who was the owner of the soil. The state had always recognized the right of ownership, subject to the payment of revenue at the prevailing rates, although there was no written code extant from which such a right could be proved.

Apart from jotedars, “chukhanidars” were immediate tenatns to the raja.  The chukhanidar was an immediate sub-tenant or an under-tenant of a jotedar, a holder of certain portion of the jote or farm.

This kind of holding was known as a “chukhani” which was saleable under tenure, subject to the persmission of jotedar for transfer.  A chukhanidar had the right to occupancy and he paid to the jotedar as rent, a sum not exceeding 25% over the rates that the jotedar paid to the state.

Chokhani” again a popular last name in Marwari’s indicate their use of land-revenue as an instrument for money-lending activity.
Crop-Financing or money-lending for cash crops like Opium, Jute and Cotton against land as a collateral gained popularity in British controlled territories. Same would be discussed in my next posts. 

Here is an excerpt from a Book titled "Govind Narayan's Mumbai: An Urban Biography from 1863" which gives a vivid description of the Marwari Moneylenders operating in the city. 

There are many Marwari sawakars who number over 1500. They road door to door with their books. These Marwaris lend amount ranging from eight annas (equivalent to 1/2 Rupee) to over 10,000-15,000 rupees to people. They seem to have a facility and the courage to lend money. However poor or bankrupt one may be, they are willing to lend some amount of money. In return they expect 10 for 1 or maybe 25 for 5. There have been instances where as sum of 4 rupees has been lent, made up to 5 ruppes using their sawai practice of adding a 1/4 to the principle, and 4 different bonds are issued. 

Given below is a chart of the money which is to be returned to a principal amount of Rs.4

Number of Days
Principal + Interest

       According to the above calculations the rate of interest charged by these lenders was an astronomical 7100%

Tuesday 27 August 2013

RISE TO PROMINENCE - Pooled Resources

Pooled Resources

Marwari's as compared to their Bengali counterparts in Calcutta have an inheritance law that is alleged to favor the manitainence of joint family property.
Marwari’s followed the Mitakshara system where shareholders in a join family property have their property rights vested in them at birth.
In terms of the joint family system, the eldest son of the family would inherit and have as his responsibility the maintenance of the brothers, who pooled their income.
Due to their capital accumulation frompan-North Indian trade, and the ways that families could pool their resources in the Mitakshara system, this made them more solvent.
Bengalis on the other hand followed the Dayabhaga system of inheritance where they would own property separately but would be considered "joint" because of sharing of hearth.
Muslim Law, on the other hand provides a much more dispersed system of inheritance and does not recognize the joint family as a corporate entity. Not surprisingly, Muslim convert merchant groups often preferred to retain Hindu family law to keep their joint family capital together. 


Resource Group

The existence of “Resource Groups” were of major advantage to the Marwari’s due to which institutionalized hostels to accommodate migrants, credit facilities and forms of commercial arbitration was made available.

—Presence of one big firm owned by a communal fellow, as in the case of the Jagat Seth of Murshidabd attracted immigrants. Surajmal Jhunjhunwala of Chirawa and Nathuram Saraf of Mandawa were recruited by the Jagat Seth during their tours in upper India. They spawned “Sub-Resource Groups” of Marwaris from Chirawa and Mandawa which were important features of the Calcutta cloth market at the turn of the century. 

RISE TO PROMINENCE - Up Country Network

Up-Country Network

Organization of credit produced network of contacts all over the country which could be used for the selling and purchasing of the goods traded in the ports. British traders poor knowledge of the north-western parts of India, their absence of a network of agents and the competition of the natives accounted for the weak representation of British merchant capital in these areas. Foreign firms naturally found themselves dependent on Marwari merchants with such network.
The unwillingness of other trading communities to move up-country was partially due to the sorts of humiliations which upcountry traders had to sustain in connection with inland levies on goods. The Marwaris were presumably willing to pocket the humiliation of up-country trading which left other communities at somewhat of a disadvantage

RISE TO PROMINENCE - Access to Capital

Access to Capital

The genius of a trading community lies in its manipulation of credit. With this genius for credit acquisition, it is no wonder that trading communities managed to acquire the capital resources which have enabled them to play a dominant role in the industrial development of India.
The port merchant disposed of his imports by supplying them on 3 or 6 month credit to his correspondent upcountry. The merchant acquired cotton and jute from the farmer by advancing him credit for the crop season.

Traders of had access to capital or access to its surrogate, credit. Industrial entrepreneurs where thus people who had access to capital or credit.  
After 1853, India became a net importer of capital for several decades. British firms no longer dependent on their Indian collaborator for working capital were thus less likely to offer them less honorable and lucrative terms. The older collaboration firms which were mostly Bengali were reluctant to take up these new terms. On the other hand Marwari firms whose bargaining position was not as goods, emerged to step into the collaborating role.
In a case of Marwari merchants in Banaras it is learnt that they had access to capital from fellow merchants who made capital available overnight without collateral. There were preferential interest rates for fellow Marwari, account for which was settled once in a year. 
During 1st World War India was completely cut-off from Europe, in 1920 the government of India undertook a series of programs to encourage selected Industries. It was encouraged by lack of competitive imported goods from abroad.
Empowered with capital accumulated during the war through speculation in commodities and experience in supplying raw materials to the Industry a substantial number of Marwari’s entered manufacturing.
In the 2nd World War some businessmen made money supplying the troops and speculating on wartime markets. Others exploited the natural protection to setup a series of industries to meet domestic needs. Still others made money supplying war needs by exports to Far East and Europe which had turned into battle grounds.
Capital accumulated during this process was utilized to take over Industries and occupy enclaves left by the British post Independence.  

Monday 19 August 2013



Some Marwaris moved from Calcutta to Burma after its conquest by the British in 1885. Here again they faced stiff competition from Chettiars and Memons who were well established in Burma by then. Still the Marwari firms in timber and rice exports were factors to be reckoned with.

Many Indian merchants fled Burma during the Japanese occupation (1942-45). The bulk of the remainder were expelled along with other non-indigeneous in the years that followed. 


Bombay & Malwa

Migrations to Bombay started after 1800. This was much earlier than Calcutta which could have been attributed to the International character of Bombay as a Center of Trade. They however faced resistance from Gujarati moneylenders in Ahmednagar and Parsee merchants in Bombay City who had long before established themselves in the region.

In central India, the rural areas of Bombay Province, the Marwari’s became the pre-eminent local moneylenders and merchants.  They financed especially the growth of cash crops which the British demanded. After the reduction in land revenue (1835-50) created some surplus with the peasant on which a meager retail trade could be based. Ingenious businessmen never seem to have existed in any number of this area.

Marwaris in this region often started as small shopkeepers, rapidly taking on to money-lending for financing crops which were demanded by the British, at first opium and then cotton. Many of the migrants arrived just before 1860. Their fortunes may well have been founded on their participation in the cotton-export boom of Bombay during the American Civil War years, when the American raw cotton supplies to mills in Britain were disrupted. A Later spurt of migration seems to have occurred between 1890 and 1910, much of it via Indore. 

One Aggarwal firm in the Central Provinces was particularly noteworthy. The firm of Bacchraj Jamnalal Bajaj based in Wardha was especially prominent in supplying cotton to the Japanese. By 1913 the firm shipped out 40K bales/year and reaped a profit of Rs.75 Lakhs. The firm became famous because of its proprietors, Seth Jamnalal Bajaj played a leading role in the independence struggle.

An apocryphal story when Jamnalal Bajaj entered business it was common practice for Marwari traders to sprinkle water on the cotton bales to increase its weight while selling to mills. When firm’s munshi suggest him to do the same he refused to do so. Instead he put up a banner “Dry Bales for Sale”. The purchaser with prospects of not having to bear the risk of buying water sprinkled bales where he was uncertain of water sprinkled gladly paid a premium for dry bales offered by Jamnalal Bajaj.

After Independence their heirs took the Bajaj firm into industry outside Wardha and played a crucial role in post-independence industrialization of the nation.  

Sunday 18 August 2013



Marwari’s started arriving in Assam soon after its conquest by British in 1818. Unlike other parts of India where they faced competition from local trading community in Assam due to absence of trading indigenous trading community they monopolized the trade from day one. Before the arrival of Marwari’s trade in Assam was limited to barter of goods between adjacent villages.

As a unique and one of its kind example of early Marwari migration a prominent Marwari from Churu in Shekhawati, Harbildas Aggarwal’s father apparently took an Assamese wide and adopted Assamese lifestyle. He established branches in Tejpur, North Lakhimpur and Dibrugarh. He was one of the first Indians to purchase a Tea Estate in 1868, called “Tamulbari”. He however continued to maintain ties with fellow marwaris and helped many settle down as merchants in the region.

In 1990’s, assam had witnessed an anti-Marwari movement on the part of ULFA which sparked an exodus of Marwaris from the area. Anti-Marwari agitations in Orissa also began in early 1980’s. Many marwari families from Orissa, Assam and Bihar migrated to Raipur in Chhattisgarh. These migrants were aided by Marwari families who had been living there for generations.