22 Pages

Fortune and Failure: The Survival of Family Firms in Eighteenth-Century India

The indigenous family firm has traditionally been associated with India's trading interests and to the present day remains closely interlinked with the pattern of commercial life. Whilst there are many similarities between contemporary Hindu family firms and their predecessors, however, it should not be concluded that they have been unwilling to modify their practices or to adapt to new commercial structures when this might be required. Holton, for example, has seen the structure of the family firm in western India in the nineteenth century as 'a transitional institution' which assisted the adjustment to the changing conditions brought about by industrialisation. In the instance quoted by Holton, the Hindu trading community of Bhatias utilised their family networks to adapt to specialisation and to interact with changing markets. 1

In the eighteenth century too, merchant families traded within a commercial environment which, although it allowed for economic and even political gain, nevertheless involved adaptation and an accommodation of colonial interests. As Bayly has shown, indigenous merchants in India during the eighteenth century were part of a trading system which was both fluid and dynamic. 2 In a period which saw an extension of European influence through the country, Indian merchants were the powerful providers of capital. Networks of credit offered by Indian merchants comprised a system which extended throughout India, facili~ tating the efficient movement of capital across the country. It was through the large and wealthy Indian banking houses of Bengal that capital was raised to support the expansion of East India Company influence and it was indigenous merchant interests which called for the British to take over control in the West Indian port of Surat in the eighteenth century.3 In Western India the involvement, primarily by Hindu merchants, in moneylending and banking, was integral to the development of commerce and allied itself to the growing influence of the British.4