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Globalization before its Time: Gujarati Traders in the Indian Ocean
Dr Chhaya Goswami, Honorary University Fellow, University of Exeter, UK, specializes in western Indian Ocean maritime history. She has authored a previous book on Kachchhi traders. Her current research explores maritime trade and piracy in the gulfs of Kachchh and Persia in the eighteenth century. Jaithirth (Jerry) Rao is an author, columnist, banker, IT entrepreneur and the founder of two companies.
272 pages, Paperback
Published February 29, 2016
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January 15, 2021
India had had the misfortune to come under the political domination of a trading company for nearly two centuries. The political masters in this unusual setting tweaked the rules and commercial environment to ensure primacy for the produce of their own homeland. The open discrimination against Indian industry prompted them to band together and support Indian freedom fighters in its quest to dismantle foreign rule. This history of colonialism in India conveys a misleading assumption that Indians were no good in trade or commerce. Even though conventional authors follow this route to accentuate the effort – both of the political party and Indian industry – in achieving freedom, there are examples where Indians operated vast networks of traders and managed the merchandise of an entire country. Indians were not always the losers or exploited in their encounters with colonizers. In fact, Indian mercantile traditions were robust enough to challenge European interests and seek advantages in the interstices of intra-European competition. The maritime entrepreneurs of Kachchh linked India, Arabia and Africa in a golden triangle of trade during the dying days of the Mughal Empire. This business flourished in the eighteenth and nineteenth centuries. This book belongs to the series on the story of Indian business. Gurcharan Das provides a brilliant introduction to the relevance of the book. Chhaya Goswami is herself from Kachchh and is an honorary fellow of the University of Exeter. She specialises in western Indian Ocean maritime history. Her current research explores maritime trade and piracy in the gulfs of Kachchh and Persia in the eighteenth century.
Kachchh, we know, is a piece of semi-arid territory with not much agriculture and notorious for frequent earthquakes. The Jadeja dynasty that ruled in the sixteenth century realized that revenue from agriculture would never amount to much in their country as the rainfall was scant and the landscape mostly barren. They actively promoted ports and trade and ship-building became an obsession with the rulers. They established flourishing trading posts at Muscat whose rulers also followed a not altogether different policy. As Omani trade extended to Zanzibar off the coast of Tanzania, Kachchhi merchants facilitated trade and extracted revenue for the Arabs. The Kachchhis, irrespective of religion, developed social institutions that could unite them and enabled them to bargain with the authorities. Trade guilds called Mahajans resolved disputes like interest payments, breach of contract, marine insurance claims and bankruptcy. Enforceability of the guild’s decisions was purely based on the reputation and mutual recognition of the jury’s judicial power. The writ of the panel reached overseas shores too. Religious inhibitions were also involved in decision making. The ultra-rich business concern of Jairam Shivaji’s in Zanzibar was forced to revoke a deal with a European firm, as it included a contract for trading in beef.
Goswami explains what made the Kachchhis successful even in exotic places. In their towns of origin as well as locations where they migrated, these merchants were bounteous in donating to charitable works, contributing to their prestige. Social and cultural sanctions on overseas travel by orthodox Hindus were ameliorated with liberal donations to religious institutions. Hindu monasteries (math) also participated in business transactions and augmented the economic initiative by operating as business conglomerates. They owned rich lands, accumulated capital leveraging their role as clearing banks for overland trade. Safe deposit services were available for clients who needed to store their gold and valuables. The monasteries’ long and short term credit were both productive and remunerative. This too helped to do away with the stigma attached to overseas travel. The Gujarati community exhibited such consummate skill in foreign trade as if to doubt the existence of a trading gene in their heredity!
The book neatly explains the geographical as well as commercial significance of the sea trade. By the eighteenth century, Muscat rose to prominence as a conduit to trade. The Omani sultan was himself a merchant and had great empathy for all merchants, irrespective of their ethnic or religious affiliations and encouraged them to invest and settle in Muscat. His police guaranteed security of life and property to foreigners also. Early sultans extended considerable religious freedom to Hindus. Ethics did not involve in the items of trade. Human slaves, ivory and gum copal were the export of East Africa for which cloth, beads and copper wire were exchanged in return. Duping of the naïve local chieftains was rampant. The slave trade went on in full swing till the British changed policy and outlawed it in the nineteenth century. Dates were exported from Arabia, mainly to the US.
Zanzibar was equally important as Muscat for the flourishing Kachchhi trade. This island was held by Oman at that time and they diligently cultivated the island’s reputation as a free port. It offered a low, consistent five per cent import duty on all goods, no duties on exports, no taxes on shipping, no charges for pilotage, no charges for use of the port and no requirement of manifests or approvals from port authorities before sailing. Attracted by the equatorial island’s potential, Omani sultans shifted their capital from Muscat to Zanzibar. The place was ideal for cultivating spices and sultans encouraged widespread cultivation of cloves in Pemba Island. Kachchhi traders followed the imperial camp loyally.
The Kachchhi merchants were deeply religious and the author tactfully explains how they played around religious taboos and inhibitions. The first witness to Kachchhi legal documents was the sun. It transcended religious differences as the Memons and Khojas too maintained this custom. Agreements were hence prepared and signed only in daytime. In financing the ivory business, the Kachchhis were in fact financing the slave trade. Every caravan that came from the interior carrying ivory employed thousands of porters, who were then disposed of as slaves. This does not seem to have roused much moral compunction then as it does now. Hindu religious traditions regarding nonviolence did not affect the demand for ivory objects. Peshwa Savai Madhav Rao claimed to have found in Hindu sacred books a law prohibiting Brahmin women from using metal hair combs. This was followed by a decree supporting the use of ivory combs. Many users sought comfort by staying under the impression that the ivory they used came from elephants that had died naturally!
The book also provides subtle hints of the hardening of the Arabian mindset on the arrival of revivalist religious sentiment. In the beginning, many sultans were favourably disposed towards Indian trading communities irrespective of their religion. Regardless of the enlightenment of the rulers, the Omani economic system was still heavily weighed down by religious dogma. The import duties were dependent on the religion of the importer! While Muslims paid 5 per cent as duty, non-Muslims had to cough up 7 per cent. By the nineteenth century, the sultan wanted to relax the rates to bolster trade. Consequently, he reduced the non-Muslim rate to 5 per cent, but at the same time halved the Muslim rate to only 2.5 per cent. Humiliating dress code was prescribed for Hindu merchants in the cities of Yemen. Cremation of the dead was banned and they were forced to bury their dead kin. Sultan Said Azzar bin Qais (1868 – 71) put a stop to the long tradition of toleration by objecting to Indian religious rituals including the use of drums. People were required to grow moustaches in the fashion of Mutawas (moral police). Tobacco trade was banned.
The book is easy to read but lightly anchored on verifiable reference sources. There is a tendency to idealize the merchants and their efforts to prosper. Readers are left with no idea about the local sentiment towards them – whether the people in the far off lands saw them as benefactors or exploiters. Goswami shows a proclivity to generalize on scant evidence. On top of it all, it does not tell the whole story, of how the Indian entrepreneurship got unraveled in the last century. Anyway, it provides a rare glimpse on the great Indian attempt at world trade.
The book is highly recommended.
Kachchh, we know, is a piece of semi-arid territory with not much agriculture and notorious for frequent earthquakes. The Jadeja dynasty that ruled in the sixteenth century realized that revenue from agriculture would never amount to much in their country as the rainfall was scant and the landscape mostly barren. They actively promoted ports and trade and ship-building became an obsession with the rulers. They established flourishing trading posts at Muscat whose rulers also followed a not altogether different policy. As Omani trade extended to Zanzibar off the coast of Tanzania, Kachchhi merchants facilitated trade and extracted revenue for the Arabs. The Kachchhis, irrespective of religion, developed social institutions that could unite them and enabled them to bargain with the authorities. Trade guilds called Mahajans resolved disputes like interest payments, breach of contract, marine insurance claims and bankruptcy. Enforceability of the guild’s decisions was purely based on the reputation and mutual recognition of the jury’s judicial power. The writ of the panel reached overseas shores too. Religious inhibitions were also involved in decision making. The ultra-rich business concern of Jairam Shivaji’s in Zanzibar was forced to revoke a deal with a European firm, as it included a contract for trading in beef.
Goswami explains what made the Kachchhis successful even in exotic places. In their towns of origin as well as locations where they migrated, these merchants were bounteous in donating to charitable works, contributing to their prestige. Social and cultural sanctions on overseas travel by orthodox Hindus were ameliorated with liberal donations to religious institutions. Hindu monasteries (math) also participated in business transactions and augmented the economic initiative by operating as business conglomerates. They owned rich lands, accumulated capital leveraging their role as clearing banks for overland trade. Safe deposit services were available for clients who needed to store their gold and valuables. The monasteries’ long and short term credit were both productive and remunerative. This too helped to do away with the stigma attached to overseas travel. The Gujarati community exhibited such consummate skill in foreign trade as if to doubt the existence of a trading gene in their heredity!
The book neatly explains the geographical as well as commercial significance of the sea trade. By the eighteenth century, Muscat rose to prominence as a conduit to trade. The Omani sultan was himself a merchant and had great empathy for all merchants, irrespective of their ethnic or religious affiliations and encouraged them to invest and settle in Muscat. His police guaranteed security of life and property to foreigners also. Early sultans extended considerable religious freedom to Hindus. Ethics did not involve in the items of trade. Human slaves, ivory and gum copal were the export of East Africa for which cloth, beads and copper wire were exchanged in return. Duping of the naïve local chieftains was rampant. The slave trade went on in full swing till the British changed policy and outlawed it in the nineteenth century. Dates were exported from Arabia, mainly to the US.
Zanzibar was equally important as Muscat for the flourishing Kachchhi trade. This island was held by Oman at that time and they diligently cultivated the island’s reputation as a free port. It offered a low, consistent five per cent import duty on all goods, no duties on exports, no taxes on shipping, no charges for pilotage, no charges for use of the port and no requirement of manifests or approvals from port authorities before sailing. Attracted by the equatorial island’s potential, Omani sultans shifted their capital from Muscat to Zanzibar. The place was ideal for cultivating spices and sultans encouraged widespread cultivation of cloves in Pemba Island. Kachchhi traders followed the imperial camp loyally.
The Kachchhi merchants were deeply religious and the author tactfully explains how they played around religious taboos and inhibitions. The first witness to Kachchhi legal documents was the sun. It transcended religious differences as the Memons and Khojas too maintained this custom. Agreements were hence prepared and signed only in daytime. In financing the ivory business, the Kachchhis were in fact financing the slave trade. Every caravan that came from the interior carrying ivory employed thousands of porters, who were then disposed of as slaves. This does not seem to have roused much moral compunction then as it does now. Hindu religious traditions regarding nonviolence did not affect the demand for ivory objects. Peshwa Savai Madhav Rao claimed to have found in Hindu sacred books a law prohibiting Brahmin women from using metal hair combs. This was followed by a decree supporting the use of ivory combs. Many users sought comfort by staying under the impression that the ivory they used came from elephants that had died naturally!
The book also provides subtle hints of the hardening of the Arabian mindset on the arrival of revivalist religious sentiment. In the beginning, many sultans were favourably disposed towards Indian trading communities irrespective of their religion. Regardless of the enlightenment of the rulers, the Omani economic system was still heavily weighed down by religious dogma. The import duties were dependent on the religion of the importer! While Muslims paid 5 per cent as duty, non-Muslims had to cough up 7 per cent. By the nineteenth century, the sultan wanted to relax the rates to bolster trade. Consequently, he reduced the non-Muslim rate to 5 per cent, but at the same time halved the Muslim rate to only 2.5 per cent. Humiliating dress code was prescribed for Hindu merchants in the cities of Yemen. Cremation of the dead was banned and they were forced to bury their dead kin. Sultan Said Azzar bin Qais (1868 – 71) put a stop to the long tradition of toleration by objecting to Indian religious rituals including the use of drums. People were required to grow moustaches in the fashion of Mutawas (moral police). Tobacco trade was banned.
The book is easy to read but lightly anchored on verifiable reference sources. There is a tendency to idealize the merchants and their efforts to prosper. Readers are left with no idea about the local sentiment towards them – whether the people in the far off lands saw them as benefactors or exploiters. Goswami shows a proclivity to generalize on scant evidence. On top of it all, it does not tell the whole story, of how the Indian entrepreneurship got unraveled in the last century. Anyway, it provides a rare glimpse on the great Indian attempt at world trade.
The book is highly recommended.
November 22, 2024
Very informative. Talks about how Kacchhis took over the trading business in Muscat, Zanzibar, Mandvi. They not only created new business avenues but also introduced new and systematic financing systems.
The book in parts felt like reading a lot of dates and numbers and is not exactly in a chronological order...but still a very great read.
The book in parts felt like reading a lot of dates and numbers and is not exactly in a chronological order...but still a very great read.
March 20, 2019
When I start reading this book, I was expecting it to contain biographies of several Kutchi merchants of the late 18th century. I was completely wrong as this book digs deep into history and connect several aspects like politics, management, diplomacy, and religion. I want to highlight some exciting facets mentioned in the book.
Let's start with religion. There was only one religion western part of India in the late 18th century, and that was Business! Monasteries were not only maintained as Shiva temples and Sanskrit pathshalas, but they also operated as business conglomerates. Kachchhi monasteries run by Goswamis accumulated capital and leveraged their role as clearing banks for overland trade. Goswami network spread across Mandvi, Bombay, Karachi, Muscat, Zanzibar and East Africa! The banking role of religion here was quite public, and it was not viewed with disgust as seen now. It was a combination of commercial as well as charitable activities. Hindu Bhatias, Bhanushalis, and Lohanas and Muslim Khojas, Bohras and Memons lived with an exceptional level of communal harmony which is hard to imagine today. For example, Sir Thariya Topan, a Khoja by cast worked as an apprentice at Jairam Shivji’s firm and eventually created an empire bigger than Jairam Shivaji’s.
This book also explains how various management bodies like “Mahajan” and designations like “Nagarseth” existed in late 18th centuries in western India which worked consistently worked to protect the collective interests of its members. “Vepaari” Mahajan served as an informal link between the state and the merchants! The system of Marine Insurance and Banking world of Goswamis is also discussed in brief. One of the appealing elements of the business was apprenticeship/internship which is still prevalent today! (BSchool people knows it very well :P). For Kutchchhis, Bazaar was the best school and apprentice was the first step of the business ladder. This internship contained several phases starting with daily chores like cleaning the shop. Following stages consisted of accounting, scrutinizing the quality of products and commodities and then finally starting their own business! There was no ceiling on the progress an apprentice can make.
The part I liked the most in this book is on the diplomacy of Indian merchants in Oman and East Africa. The Sultan of Oman gave considerable freedom to Hindus, which was unusual for an Islamic country! The task of customs collection was assigned to Indian merchants. However, the Kutchchhis had substantial influence over Zanzibar than they had over Oman. Jairam Shivji and Sir Thariya Topan were successful in nearly monopolizing the whole Zanzibar market. Even the Americans had to come on terms with Jairam Shivji to establish trade in Zanzibar! Whenever rulers required money, they asked to the firm of Jairam Shivji. Upon his insistence, Sultan Seyyid Said even forbade the killing of cows during Eid Al-Fitr. The citizens of Zanzibar town regarded the estate of Jairam Shivji as “Nyumba Serikali” or the Prime Minister’s residence! Sewa Haji Paroo, another retailer of Indian origin, helped to build a hospital for the destitute and orphans in Dar-es-Salaam.
Because of the diplomatic and charitable activities, Sewa Haji Paroo, Thariya Topan, and Alidina Visram became famous as “Three uncrowned kings of east Africa”!
In earlier years, all Kutchchhis traded heavily in Ivory, Rhino horns, explosives and pearls! However, when Queen Victoria abolished slavery, these Kutchchhi merchants of East Africa were the first one in eliminating the slave trade. They thought clove farming to local people and made them self-dependent. Thariya Topan’s inestimable efforts to abolish slavery earned him Knighthood in England in 1875 and second time in 1890 in India!
In spite of most of the area occupied by desert, Kutch was successful in producing merchants who were the actual pioneer of the Globalization!
Let's start with religion. There was only one religion western part of India in the late 18th century, and that was Business! Monasteries were not only maintained as Shiva temples and Sanskrit pathshalas, but they also operated as business conglomerates. Kachchhi monasteries run by Goswamis accumulated capital and leveraged their role as clearing banks for overland trade. Goswami network spread across Mandvi, Bombay, Karachi, Muscat, Zanzibar and East Africa! The banking role of religion here was quite public, and it was not viewed with disgust as seen now. It was a combination of commercial as well as charitable activities. Hindu Bhatias, Bhanushalis, and Lohanas and Muslim Khojas, Bohras and Memons lived with an exceptional level of communal harmony which is hard to imagine today. For example, Sir Thariya Topan, a Khoja by cast worked as an apprentice at Jairam Shivji’s firm and eventually created an empire bigger than Jairam Shivaji’s.
This book also explains how various management bodies like “Mahajan” and designations like “Nagarseth” existed in late 18th centuries in western India which worked consistently worked to protect the collective interests of its members. “Vepaari” Mahajan served as an informal link between the state and the merchants! The system of Marine Insurance and Banking world of Goswamis is also discussed in brief. One of the appealing elements of the business was apprenticeship/internship which is still prevalent today! (BSchool people knows it very well :P). For Kutchchhis, Bazaar was the best school and apprentice was the first step of the business ladder. This internship contained several phases starting with daily chores like cleaning the shop. Following stages consisted of accounting, scrutinizing the quality of products and commodities and then finally starting their own business! There was no ceiling on the progress an apprentice can make.
The part I liked the most in this book is on the diplomacy of Indian merchants in Oman and East Africa. The Sultan of Oman gave considerable freedom to Hindus, which was unusual for an Islamic country! The task of customs collection was assigned to Indian merchants. However, the Kutchchhis had substantial influence over Zanzibar than they had over Oman. Jairam Shivji and Sir Thariya Topan were successful in nearly monopolizing the whole Zanzibar market. Even the Americans had to come on terms with Jairam Shivji to establish trade in Zanzibar! Whenever rulers required money, they asked to the firm of Jairam Shivji. Upon his insistence, Sultan Seyyid Said even forbade the killing of cows during Eid Al-Fitr. The citizens of Zanzibar town regarded the estate of Jairam Shivji as “Nyumba Serikali” or the Prime Minister’s residence! Sewa Haji Paroo, another retailer of Indian origin, helped to build a hospital for the destitute and orphans in Dar-es-Salaam.
Because of the diplomatic and charitable activities, Sewa Haji Paroo, Thariya Topan, and Alidina Visram became famous as “Three uncrowned kings of east Africa”!
In earlier years, all Kutchchhis traded heavily in Ivory, Rhino horns, explosives and pearls! However, when Queen Victoria abolished slavery, these Kutchchhi merchants of East Africa were the first one in eliminating the slave trade. They thought clove farming to local people and made them self-dependent. Thariya Topan’s inestimable efforts to abolish slavery earned him Knighthood in England in 1875 and second time in 1890 in India!
In spite of most of the area occupied by desert, Kutch was successful in producing merchants who were the actual pioneer of the Globalization!
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