Independence Day: How the Tatas struck back at the British empire – ET Infra


In the early 1900s, the Tatas set about their plans to build a steel plant after raising money from the markets. Upon hearing the plan of an Indian entrepreneur to enter such a risky business, a British administrator used the choicest words which make for a satisfactory reading over a century later.

“Do you mean to say that Tatas propose to make steel rails to British specifications? Why, I will undertake to eat every pound of steel rail they succeed in making.”

This was a retort by Sir Frederick Upcott, chief commissioner of Indian Railways in the early 1900s, when Dorabji Tata, son of Sir Jamsetji Nusserwanji Tata, announced plans to make steel in India. Upcott believed that Indians were good enough to make steel like the British wanted. Only British Steel supplied the steel good enough for making rails.

A century of determination

In October 2006, business magnate Ratan Tata put pen to paper as Tata Steel completed the most prominent foreign takeover by an Indian company as it acquired European steel giant Corus Group. He called it a “moment of fulfilment for India”.

Erstwhile British Steel Corporation, a government-owned coalition of 14 major steel producers in Britain, was privatised in the 1980s. British Steel merged with Koninklijke Hoogovens in 1999 to form Corus, only to be eventually acquired by the Tata Group in a $14-billion deal in 2007, making it the fifth biggest steel producer in the world at the time. The history had come full circle from Upcott’s quip to the Tatas buying the company which had its origin in British Steel. Tata’s took nearly a century to strike back at the empire.

“When we launched the bid for Corus, many thought it was an audacious move, because an Indian company taking over an European company much larger in size has not happened before,” Ratan Tata said when the deal to acquire Corus went through. This acquisition in many ways was a culmination of a century defined by determination against all odds, set in motion by the founder of the Tata Group.

Like many other businessmen of his time, Sir Jamsetji Nusserwanji Tata had one burning desire, to make products in India, for India. But it was easier said than done, given the disdain for Indian entrepreneurs under The Crown. Tata got the inspiration to float an iron and steel startup, during a visit to Manchester, UK. In 1882, JN Tata read a report by German geologist Ritter Von Schwarz which hinted at the availability of rich deposits of iron ore in Lohara. Despite the plan being dropped then, Tata had his sights set on giving India a steel plant. However, he passed away before his son Dorabji would turn this desire into a reality.

“It was the first time that the raw material of India did not go out and return as finished articles to be sold in the country. Above all, it was purely a swadeshi enterprise financed by swadeshi money and managed by swadeshi brains,” wrote Dorabji as Tata Steel raised money from domestic investors in 1906.

Upcott’s quip did not deter the Tatas as the Tata Iron and Steel Company (TISCO) was established on August 26, 1907.

British first

Despite JN Tata’s resolve to make steel, the British didn’t pay heed. “Most of them (the British) felt that the Indians were all right in their place, but steel-making was a cut above them. A big cut,” wrote John Keenan, a retired general manager of the Tata Steel Iron and Steel Company in his memoir ‘A Steel Man in India’. “A steel industry in India would not only compete with the English mills, but it wasn’t practicable,” he wrote.

However, the British soon realised the promise that Tata Steel held. A decade after Upcott’s statement, the British administrators were grateful for Tata Steel’s existence. Tata Steel played a significant role in helping the colonisers during the two World Wars, becoming the largest steel plant in the British Empire.

On January 2, 1919, Lord Chelmsford, who served as Governor General and Viceroy of India, said, “ I can hardly imagine what we should have done during these four years (of the First World war) if the Tata Company had not been able to gift us steel rails… not only for Mesopotamia but for Egypt, Palestine and East Africa.” And on that day, he renamed the area after the founder of the group, Jamshedpur.

Survive and thrive

The first ingot of steel rolled on the lines of the Sakchi plant in February 1912. Dorabji Tata commented dryly that if Upcott had carried out his undertaking, he would have had “some slight indigestion”, wrote RM Lala in ‘The Creation of Wealth’, a book on the Tatas.

Success was sweet, but the survival of an industry in the midst of a war took a toll on Tata Steel. In November 1924, the steel company was on the verge of closing down. Dorabji Tata was struggling to keep the company afloat. There was talk of asking the government to take over the company. However, JN Tata’s cousin RD Tata “pounded the table and declared that the day would never come as long as he lived”.

Furthermore, Lala writes, Dorabji pledged his entire personal fortune of Rs 1 crore, including his wife’s jewellery, to obtain a loan from the Imperial Bank of India for a public limited company. Survival was not guaranteed, and against most odds, Tata Steel kept growing. When Keenan met Upcott nearly 34 years after his infamous retort, he updated the British capitalist about how many millions of tonnes of steel Tata Mills was churning out. More importantly, it was made to the rigid British specifications.

Upcott said, as Keenan wrote, “I can see now that my appetite in the old days must have been enormous”. From Upcott to Corus, the Tatas turned on its head a colonial stereotype, that the Indians could never come up to the level of Britishers.

  • Published On Aug 16, 2023 at 07:28 AM IST

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