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.



Marwari migration to Calcutta started in 1830. They formed a Panchayat to handle quarrels and maintain discipline in the community. The first migrants to Calcutta seem to have hitched rides as super cargos aboard river boats at Mirzapur in East-Uttar Pradesh. Many marwaris came and started their career first at Calcutta but in search of better fortune they further migrated from Calcutta to the country side.

The basic reason for such further migration might be the fact that Calcutta was a cosmopolitan city where there was a keen competition among various merchant communities, apart from the fact that Bengali business entrepreneurs had been very well established in Calcutta at that time. 

The first Marwari firms in calcutta date from before 1857. It was only in the 1870’s that we get a sense of the Marwari’s arriving in Calcutta in large numbers. Until 1860’s the trade of Calcutta was with Bengali and to a lesser extent in Khatri and North Indian bania hands. 

Slowly starting 1880’s, the marwaris started replacing Khatris and Bengalis as banians to British firms. By the turn of the century the list of invitations to the Viceroy’s Leeves published in the newspapers show a sizable group of Marwaris and only one or two KhatrisBy 1911, the Calcutta Marwari population was 15,000 and that in Bihar, Orissa, Bengal and Assam was 75,000. 

This co-indices with discovery of synthetic Indigo Dye by German chemical company BASF. First discovered in 1878 its industrial scale production in 1897. Before its invention plant based Indigo cultivated in Bengal was the only source of blue dye. Bengali businessmen particularly had a majority stake in trade of Indigo. A notable Bengali bhadralok Dwarkanath Tagore (father of Rabindranath Tagore) had an important stake in its trade. 

Among early Calcutta Marwari migrants is Seth Nathuram Saraf who was full of feeling for his caste fellows and opened up a basa for marwari migrants in which they could stay free of charge. He facilitated further migration, especially from his hometown of Mandawa. He became the 1st Marwari BanianIn Sutapatti, Mandawa stores were numerous in comparision to other cities, there were once 45 cloth shops from Mandawa, specializing in the fine melmel variety of cloth.



The Marwari migration did not occur within a short period. Its pace was gradual and increasing in nature. One Male member of a family in Rajasthan came first to this region in quest of a fortune and stayed here for a few years doing business. After having established himself, he helped other members of his family, whom he left behind in his native place at the time of his migration, to come and join his business. Sometimes he also helped a neighbor who came in search of subsistence, by giving him a temporary engagement in his firm along with providing him the facility of free food and lodging at his basa or gaddi (office)

Thursday 15 August 2013

TRIGGERS FOR MIGRATION - Development of Railway,Road & Telegraph

Development of Railways, Road & Telegraph

Map Of Indian Railways In 1870

Between 1853-69 4255 railways laid out 4255 Miles of tracks across India.. Statistics show that the migration increased rapidly only after 1860’s which would be covered in the later slides when we shall focus on region specific migration. A proverb goes “where the railway goes, the marwari follows its ways”

With completion of rail corridor in 1916 through Shekhawati movement of women and children became speedier and safer thereby causing permanent migration to the areas where business was based. It was a sign to both the British and the locals that the marwaris were here to stay.

The railways had replaced the river routs as the main conduit for goods traffic rendering the rail center of Kanpur a better locus of operations. As a result Marwaris moved to Kanpur from River ports of Mirzapur and Farrukhabad

In 1839, the Grand Trunk Road from Calcutta to Delhi was opened and this was followed by links between major cities in British India.

Integrated postal service was introduced in I837.  Post office act of 1854 provided uniform rates. By 1861, there were 889 post offices handling nearly 43 million letters and over 4.5 million newspapers annually. Public Telegram was introduced in India in 1855


Rise of Port Cities

Tod in 1832 saw that the establishment of British rule forced the Marwaris to pick up foods at the ports of Calcutta and Bombay if they were to make a profit, rather than wait for someone to bring the goods to Pali or Churu in their homelands.

The successive wave of opportunity were ultimately governed by the demands of British and foreign port export firms. Just as the East India Company developed export line after export line to solve its remittance problem, old banking firms developed complex flows and counter flows of commodities and hundi's to balance the drains and inflows into their various branches.

TRIGGERS FOR MIGRATION - Rise of British East India Company

Rise of British East India Company

The establishment of British power furnished the conditions for the Marwari migration. On the one hand, it caused the decline of their older fields of activity in financing the warring princely states and trading along Rajasthan’s caravan routes. On the other, it opened new opportunities, to serve as intermediaries in the new foreign oriented commerce that the British were developing.

On one hand, the British imposed all sorts of discriminations against businesses based in the princely states of Rajasthan. On the other them provided relative security of property to those based in British India.

Most dramatically, the British impact was to cause the decline of former centre's of political power  and the rise of new commercial ones to shift the trade routes on which merchants perform must live.

The British needed to find experienced intermediaries as their agents, to supply armies, and to help in the conduct of government finance.

The expanding market demanded the provision of credit to craftsmen and peasants, the British rule provided an opportunity to secure this credit against land. Increased physical security gave additional assurance to moneylenders and traders, that they would be able to see the fruits of their ventures.

The Marwaris with some capital, a wide “resource group” on which to draw for credit, and a high level of commercial skill, were among the obvious candidates for the roles opened up by the British. As Parlov points out in his work, that Marwari enterprise was a product of the British. Marwari firms in general responded to the greater physical security in British India.

Origins of British Rule In India

British Conquest of India

Before the British East India Company established itself in India following was the situation which was clearly not conducive for development of trade.


A plethora of currencies  was in circulation in different parts of the country. Their relative value was determined by their metal content and the prevailing price of the metal in a given market. To complicate matters further, the purchasing power of the currency in the same market varied depending on the age of the coin, the older the coin, the less the value to allow wear and tear. The company’s silver rupee was declared to be the legal tender throughout India in 1835.

Custom Chowkies

Thevenot, who visited india in the first quarter of the 18th Century, counted 16 custom points within a distance of less than 60 miles. Anyone who could assert a measure of administrative control could extract payments for goods passing through its territories.

Metric System

The situation in the realm of weights and measures was chaotic. Standards varied not only among region, provinces, and districts, but sometimes even between 2 villages. For instance ser, a basic unit of weight used all over the land, ranged between 20.63 tolas and 78 tolas

TRIGGERS FOR MIGRATION - Diminishing Opportunities in Native Land

Diminishing Opportunities in Native Land

In the course of the 18th century, the Shekhawat thakurs sought service in the Jaipur army.
In spite of their employment in the Jaipur army, many Shekhawat thakurs attempted to supplement the meager earnings from their decreases estates by resorting to banditry.

In 1835, in a bid to restore law and order, the British East India Company recommended the formation of the Shekhawati Brigade, an army of local troops that was successful in curbing the excess of these thakurs. 

By 1820’s because of high duties, traders were preferring diversion through Shekhawati and caravan trade across the region presented an ever-decreasing proportion of the local Bania’s source of wealth.

By 19th Century the Banias had become quite powerful. They could tolerate only a certain amount of extorsion by their Rajput rulers and then they started exhibiting their firmness and made confident moves, migrating out of their region.

Another geographical factor which might have had an impact on trade through these routes could have been the “1819 Rann of Kutch Earthquake” that dammed the Puram river and changed the course of Sindhu river which flowed through “Lakhpat”, the last frontier of Kutch and a prominent port at the mouth of “Kori” creek. Lakhpat which literally means the city of millionaires was an important trading post connecting Gujarat to Sindh.


Merchant families moved out of their native land in Rajasthan due to famines


There were several famines in Rajasthan in 1812-13, 1868-69, 1877, 1891-92 and 1899, but there is little indication that these were times of accelerated out migration by businessmen. On the contrary, according to some observers, businessmen were able to assist in transportation grain to the affected areas

Tuesday 13 August 2013

SHEKHAVATI - Merchant Towns

Merchant Towns

Shekhavat’s and Qaimkhani’s followed the custom of equally diving the estates among their sons. By 19th Century they held smaller and smaller shares in smaller and smaller estates. They competed with each other offering concession to merchants, especially their own protection. Over time this competition may well have resulted in a mercantile influx in this area as a whole. The concessions often included exemptions from estate octrois and immunities from prosecution. Special emissaries from estate owners are reported to have convinced the Poddars of Churu to move to Ramgarh and the Goenkas to move to Dundlod, then budding centres of Shekhavati.

An apocryphal story about the formation of Ramgarh arrributes it to the fact that the Thakurani of Churu teased her sister, the Rao Rani of Sikar over the lack of merchants in Sikar realm. On her return the Rao Rani was supposed to have pestered her husband until he agreed to setup a merchant city state in RamgarhAnother apocryphal story about the formation of Ramgarh’s origin is rather interesting. It so happened that in Churu, which was a part of the Bikaner state, a particular Poddar clan rose to great prominence as the main merchant family trading in woollen products. Nothing was wrong with that; trade was the main occupation of the marwaris of Shekhawati. But things became really bad when the state funds dried up and the thakur (chieftain) of Churu imposed a new levy on the wool trade. This obviously angered the Poddars. They thought this was unfair and opposed the hike. But the thakur was adamant too. So the Poddars lifted their bag and baggage and off they went to settle themselves in a new place (see Churu for more). and with the help of the Raja of Sikar, the Poddars founded Ramgarh in 1791. The displaced Poddars then vowed to make Ramgarh so beautiful so as to outdo Churu. 

SHEKHAVATI - Caravan Routes & Trade Concessions

SHEKHAVATI - Caravan Routes & Trade Concessions

After the death of Aurangzeb in 1707 the Mughal empire went into a decline. In 18th Century rulers in Gujarat supported by the foundation of Bhavnagar port established a trade link with the Gulf. An overland caravan route linking towns of Bhiwani (Haryana) and Bhavnagar (Gujarat) crossed the region of Churu and Shekhawati. The principle commercial lines followed are: from Delhi via Bhiwani in Hissar (the greatest eastern part of Rajputana) to Rani (Taranagar), the other via Churu, Ratangarh and Sujangarh to Phalodi, Nagore, Jodhpur and Pali in Marwar (Jodhpur state). 

Pali was the entre pot for the eastern and western regions where the productions of India, Kashmir and China (Tibet?) where interchanged for those of Europe, Africa, Persia and Arabia. Caravans from the ports of Kutch and Gujarat imported ivory, copper, dates, gum-arabica, borax, coconuts, broad cloths, silks, sandalwood, camphor, dyes, drugs, oxide, sulphate of arsenic, spices, coffee etc.

In exchange they received chintzes, dried fruit, hing (from Multan), sugar, opium (from Kota), silks and fine cloth, potash, shawls, dyed blanket, arms and sale of home manufacture. 


SHEKHAVATI - Shekhavat's


In 1727 Maharaja Sawai Jai Singh 2 moved the Kachhawaha capital to Jaipur he and his heir imposed their Sovereignty on the Shekhawat’s reducing them to the status of thakurs i.e Landed nobles. They retained their hereditary properties and ruled them in a more or less self-governing fashion.