The Land That Taught the World to Trade

Before there was a stock exchange, before there were global conglomerates, before the word “offshoring” entered the business lexicon, there was India. And it was already doing commerce in ways that most of the world had not yet imagined.

The history of India’s business landscape is worth understanding properly, because what happened to India’s commercial culture over the centuries is directly relevant to the conversations Western businesses are having about this country today. To know where India stands now, you have to understand what it was before, what was taken from it, and how much of its original commercial instinct has quietly survived everything.

A Civilisation That Already Knew How to Trade

Long before the British arrived, India had a fully formed commercial civilisation. In the early eighteenth century, before colonial extraction had begun in earnest, India accounted for roughly 23 to 25 percent of the world’s total GDP.¹ It was not merely an agricultural economy. It had sophisticated textile industries, steel production, extensive maritime trade routes, and a financial system built on credit, trust, and relationship networks that worked across vast distances without the benefit of telegraph or telephone.

Much of that commercial infrastructure was held together by a set of remarkable trading communities whose names are still woven into Indian business life today.

The Banias, whose name derives from the Sanskrit word for merchant, were among the oldest of these communities, tracing their lineage back thousands of years to the Vaishya varna of the Hindu caste system. They were bankers, moneylenders, traders, and shopkeepers, the connective tissue of India’s internal economy.² The Mahajans, whose name translates roughly as “great men,” were a subset of this broader community, operating specifically as financiers and moneylenders. By the 17th century, the sarrafs (bankers/jewellers) and Mahajans were regularly discounting salary drafts for soldiers under the Mughal state, performing financial functions that would look familiar to any modern treasury operation.³ They were lending to the ruling class, financing trade, and providing the liquidity that kept the entire system moving.

The Jain merchant community brought its own distinct character to this world. Guided by principles of non-violence, careful record-keeping, and a deep ethical seriousness about commercial conduct, Jain traders like Virji Vora and Shantidas Jhaveri became among the most powerful merchants in seventeenth-century India. Shantidas, operating from Ahmedabad, regularly lent money to the European East India Companies that were beginning to arrive on India’s shores. In 1627, the English borrowed ten thousand rupees from him at one percent interest per month.⁴ The Europeans needed him. He did not especially need them.

The Marwaris came from the arid Marwar region of Rajasthan, a land that offered little by way of natural resources and therefore shaped its people into traders out of sheer necessity. Under the Mughals, they began migrating outward, following trade routes east toward Bengal and south toward Bombay. When the Mughal Empire collapsed in the 18th century and the axis of Indian commerce shifted from overland routes to port cities, the Marwaris were already positioned at the key nodes.⁵ By 1900, more than half of the jute balers in Calcutta were Marwari. By the First World War, they had parlayed wartime profits from speculative and commodity markets into industrial investment. The Birlas, Goenkas, Mittals, and Bajajs, names that now anchor the Indian economy, all trace their roots back to this community.⁶

The Aggarwals, one of the largest trading communities in India, trace their lineage to the legendary king Maharaja Agrasen of Agroha in present-day Haryana, said to have established eighteen distinct clans of merchants who divided his kingdom equally rather than accumulating power in fewer hands. Whether the founding story is taken as history or as cultural memory, it points to something real: a community whose commercial identity was inseparable from a social ethic: the idea that prosperity shared is prosperity sustained. The Aggarwal community produced the Dalmias, the Modis, the Singhanias, names that have shaped Indian industry for over a century.⁷

Further south, in the Chettinad region of Tamil Nadu, a community of financiers called the Nattukottai Chettiars built one of the most extraordinary banking networks the pre-colonial world had seen. Beginning with salt trading along India’s coastal districts and expanding into moneylending, the Chettiars eventually financed rice farmers in Burma, rubber plantations in Malaya, and retail expansion across Ceylon and Singapore. By the late 19th century their credit was the engine of agricultural and commercial growth across much of Southeast Asia, filling the gap that large colonial banks, which catered mainly to European trading houses, left entirely open. It was a Chettiar, M. Ct. M. Chidambaram, who went on to found the Indian Overseas Bank in 1937.⁸ Their system was built not on collateral or paperwork but on trust, personal relationships, and a reputation that travelled ahead of them across oceans.

The Gujarati Patidars, known more widely by their common surname Patel, came originally from farming communities in central and southern Gujarat. Rooted in land and agriculture, they developed a commercial culture defined by tight community bonds, mutual support, and a willingness to work harder for smaller margins than almost anyone else. When they began migrating to East Africa, the United Kingdom, and eventually the United States, those qualities went with them. Today, Patels own an estimated 22,000 hotels and motels across the United States, collectively valued at around 128 billion dollars, a share built largely from the 1960s onwards when early Gujarati arrivals began purchasing undervalued properties, running them as family operations, and lending to fellow community members on nothing more than a handshake.⁹ The Patel motel empire, as it has come to be known, is one of the most striking examples of diaspora enterprises in the modern world.

The Sindhis tell a different kind of story. Before 1947, Sindh was a prosperous trading region, and the Sindhi merchant class had already built one of the most extensive commercial networks in Asia, stretching from Kobe in Japan to Panama, with branches in ports along both the major sea routes between Bombay and the Pacific and Bombay and the Caribbean.¹⁰ When partition came and Sindh became part of Pakistan, the Hindu Sindhi community lost everything overnight. Unlike the Punjabis or Bengalis, they had no designated state to go to. They scattered, rebuilt from nothing, and by the 1970s had re-established themselves as traders across Africa, Latin America, Southeast Asia, the Gulf, and Europe. The Sindhi story is less about a particular commercial method and more about what commercial culture looks like when it is stripped of everything except the instinct itself.

And then there were the Parsis. Descended from Persian Zoroastrians who fled to India after the Islamic conquests of the 7th century, the Parsis settled in Gujarat and eventually in Bombay, where they became the city’s commercial architects. Despite constituting just 0.005 percent of India’s total population, they founded banks, built hospitals, established colleges, and created some of the country’s most enduring industrial institutions.¹¹ The Tata Group, which today employs over one million people and operates in more than one hundred countries, began in 1868 when a young Parsi priest’s son named Jamsetji Tata bought a bankrupt oil mill in south Bombay and started building something that was as much a civic project as a business.¹² The Parsi tradition, as embodied most fully in the Tatas, was never simply about accumulation. It was about building the country. That distinction, between extracting from a place and investing in it, would become the central fault line of India’s commercial history.

The Europeans needed him. He did not especially need them.

The Company That Came to Take

In 1600, Queen Elizabeth I granted a royal charter to a group of London merchants, giving them exclusive rights to trade with the East Indies. The East India Company, as it came to be known, began as a trading operation and ended as something closer to a government, with its own army, its own tax collection apparatus, and an economic relationship with India that was systematically designed to extract rather than exchange.

The numbers tell the story sharply. India’s share of world GDP, which stood at 23 percent in 1700, had fallen to just 3 percent by 1947, when the British finally left.¹³ Economist Utsa Patnaik, drawing on nearly two centuries of trade and tax data, estimated that Britain drained nearly 45 trillion dollars from India between 1765 and 1938, a figure 17 times the total GDP of the United Kingdom today.¹⁴ The textiles that had made India the world’s pre-eminent manufacturing economy were systematically dismantled, Indian weavers were undercut by machine-made British cloth, and the revenues extracted from Indian land were used to fund an imperial project that rewarded Britain and impoverished the people who were paying for it.

The truth is, the East India Company arrived in India with a single desperate question: what can we take? Everything else flowed from that. The trade policies, the land revenue systems, the deliberate destruction of Indian manufacturing, the Bengal famine of 1943 that killed more than 3 million people as grain was diverted for British wartime use. All of it was the downstream consequence of an organisation that treated India as a resource to be depleted rather than a civilisation to engage with.

What troubles me is that this mindset did not leave with the British. It found new clothes and carried on. When the offshoring wave arrived in the 1990s and 2000s, the underlying logic was often the same: go to India, take cheap labour, use it to service your clients back home. Do not develop the people. Do not invest in what they might become. Do not ask what you are leaving behind. The spices and the jewels became headcount on a spreadsheet, but the question being asked was recognisably the same one the Company had been asking two hundred years earlier. What can we take from this place?

I find that genuinely difficult to sit with, especially as someone with Indian blood and a British passport. But set aside the moral argument for a moment, because there is a practical one that is just as compelling. India has consistently shown that businesses coming here purely to take eventually leave with less than they arrived with. The companies in the next section are proof of that.

The Ones Who Did Not Read the Room

The evidence for this is visible in the companies that tried to enter India, found it confounding, and eventually retreated, not because India was impossible, but because they arrived with the wrong question.

Walmart entered India in 2007 through a joint venture with Bharti Enterprises, arrived with its American big-box model essentially intact, and spent six years running into regulatory walls, consumer habits it had not studied carefully enough, and an operational environment it had not adapted to. The joint venture dissolved in 2013.¹⁵ India’s retail market is not America’s. The consumer is not the same, the supply chain is not the same, and the relationship between a shopper and a local market is something that a global format cannot simply overwrite.

Dunkin’ Donuts arrived in India in 2012 with plans for five hundred outlets and a product that the Indian consumer simply did not want in the way that had been assumed. Donuts were not routine snacks. Tea accounts for 90 percent of India’s hot drink consumption. By 2018, more than half the stores had closed.¹⁶ The pricing was wrong, the format was wrong, and the fundamental question of whether India wanted what was on offer had never been seriously asked.

Uber Eats launched its food delivery service in India in 2017 and found itself competing in a market where Zomato and Swiggy had already built deep local networks, aggressive discounting models, and consumer loyalty that Uber could not match at any price. By 2020, Uber Eats India had been sold to Zomato.¹⁷ The lesson was not that food delivery does not work in India. It works extraordinarily well, as Zomato’s subsequent growth demonstrated. The lesson was that arriving late into a market with a generic global playbook, against competitors who had been building local intelligence for years, is not a strategy.

Marks and Spencer entered India in 2001 through a franchise arrangement with Planet Sports, arriving with its standard British product range largely intact. The sizing was designed for British bodies. The food offer, a cornerstone of M&S’s UK proposition, was absent entirely. The price points assumed a premium consumer appetite that had not been tested. M&S exited the arrangement the same year it entered. The academic literature on retail internationalisation has since treated the M&S India episode as a textbook case of a company that exported its domestic identity rather than building a new one for a new market.¹⁸

What the History Is Telling Us

The through-line connecting the East India Company to Dunkin’ Donuts to the offshoring model is not British imperialism in any narrow sense. It is a habit of mind, a way of approaching a country as a place from which to extract value rather than a place in which to create it. The companies that came to India with that habit, whether they arrived in 1600 or 2007 or 2012, found eventually that India was not infinitely patient with being treated as a resource.

The communities that built India’s commercial civilisation before any of those companies arrived understood something different. The Jain merchant who lent money to the English in 1627 was not doing them a favour out of altruism. He was building a relationship, because relationships were the infrastructure of commerce in a world without contracts and courts. The Marwari who migrated from Rajasthan to Calcutta was not simply relocating labour. He was embedding himself in a new community, embracing its culture, earning its trust over years and generations. The Parsi industrialist who built a steel plant and then funded the Indian Institute of Science was not making a charitable donation. He was investing in the country that had given his community refuge, because he understood that a country that prospers creates the conditions for everyone within it to prosper.

That is the tradition India has always rewarded. It is also, as the next chapter will show, what distinguishes the Western companies that have genuinely succeeded here from those that have not.