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date: 23 February 2019

Parsi Traders in Western India, 1600–1900

Summary and Keywords

The Parsi community enjoyed a special status in western India as enterprising traders, who were quick to appreciate the advantages of the British connection especially in driving a huge trade in the Indian Ocean and specifically with China from roughly the latter half of the 18th century. Arriving in India as asylum seekers, the community quickly adapted to the host society by adopting the local language (Gujarati) and by deploying their commercial and manufacturing skills in consolidating their social location in the region. They were mindful of the ruling powers and developed over time important strategies of working closely with local interests, so much so that they acquired a foothold in landed and commercial society. It was in the late 17th and 18th centuries that they forged important links with European traders and trading companies, working as brokers for procurement of textiles and in the process acquiring a very close understanding of foreign markets. This was an important resource that enabled the community to play a major role on the emerging proto-colonial trade of western India, largely channeled through Bombay. The late 18th and 19th centuries saw the community produce major players and merchants of renown who amassed considerable wealth from the trade in raw cotton and opium with China and invested that wealth in philanthropy and subsequently in entrepreneurship. The community was primarily located in Bombay and western India, although their ventures took them as far as Calcutta and Canton. More recently there has been a considerable volume of scholarship on the community, emphasizing its origins, its histories and self-representation, and its use of the English colonial law in defining its own status and streamlining its customs.

Keywords: Parsi, opium, raw cotton, brokerage, English East India Company, remittances, Bills of Exchange, agency houses, Gujarat, Jardine Matheson and Company, Jamsetje Jejeebhoy


The association of the Parsi community with trade and enterprise was, as David White’s monograph suggests, a publicly acknowledged fact by the middle of the 19th century: in 1864, the Census of Bombay recorded the occupation of over 60 percent of male Parsis in the city as commerce.1 European visitors to India from the 17th century had admired their skill, diligence, and penchant for trade and manufacture, while the histories produced by eminent Parsi publicists of the 19th and 20th century inevitably anchored them in narratives of commercial success pioneered by great men of enterprise, in trade and public service. The dimensions of Parsi trade and the circumstances that catapulted the community to a position of commercial eminence are the subject of this article. In the process, it seeks to provide a broader understanding of what trade included and involved in the 18th century, activities that ranged from revenue farming to ship building and export, and to reflect on the comparative advantages that the community enjoyed from working effectively within the immediate political establishment. Thus it was not simply convention that led D. F. Karaka, an important historian of the Parsis to observe: “There is one trait in the Parsi character which has greatly helped the community to keep itself foremost among the natives of India, and it is one of many reasons explaining why the Government itself attaches more importance to this community than to any other Asiatic race, and that is their loyalty to the British Crown.”2 While Karaka here was specifically referring to the British and to the benefits of their association with the British from the 18th century, his account in many ways resonated with older modes of the community’s self-representation, which were assiduously reinforced over time. The community never failed to emphasize how they came as persecuted migrants from Persia seeking asylum in India. They approached and assured the Hindu ruler of Sanjan in the 8th century: “O sagacious King hearken now to what I say of our Creed. Do not be heavy hearted on our Account for never shall any evil deed proceed from us in this land. We shall be the friends of all Hindustan and everywhere scatter the heads of thy foes.”3

In their annals and by their reckoning, the community remained true to their word as they rose from being hapless migrants to become diligent manufacturers, honest shopkeepers, efficient revenue farmers, and finally traders of preeminence, a journey marked by complex political negotiations and by shrewd commercial calculations. What stands out in the histories of Parsi enterprise is a particular blend of commercial, artistic, and manufacturing skill and political interests, with an unusual combination of adventurous spirit and mechanical intelligence and an astute understanding of local circumstances. These were traits that the community laid store by; not surprisingly later 19th-century histories and accounts by leading spokesmen in the community chose to celebrate the exploits and energy of eminent merchants whose propensity for fortune making was matched by a commitment to philanthropy and public service and absolute fealty to the ruling establishment. In the journey to commercial eminence, two factors seem to have provided the initial social capital for the community, namely, an understanding of commodities and their quality, later assuming the form of technical and mechanical knowledge, and the ability to work closely with local administration. This was evident especially in their appointment as revenue farmers and managers by local rulers, and that simultaneously enabled them to mobilize local populations, raise local militias, and defend the interests of their immediate patrons whenever necessary.

Settlement and Spread

Between the 8th and 16th century, the Parsis appear to have spread from Sanjam and Navsari (1142 ce) into the other areas of Gujarat, Ankleswar, and Broach (1228 ce), settling down and becoming weavers, carpenters, and small-time traders interacting with local commercial society and later with European traders and trading companies (the Portuguese followed by the Dutch and the English) largely as small-time procurers, and occasionally as mediators and interpreters for local negotiations. There has been a suggestion that the initial migrants who came into Sanjam were in all probability traders and were led by influential priests, or dasturs, who carried with them their fire temples.4 Over time, the community carved out a very specific geography in Gujarat around five priestly jurisdictions exercised from the towns of Sanjam, Navsari, Ankleswar, Broach, and Cambay.5 All these towns were important commercial and manufacturing centers, and it would appear that the community was able to successfully establish and consolidate their presence as fine manufacturers, weavers, and carpenters and even to set up small shops. Their skill as artisans impressed European visitors to Gujarat; Ovington, who visited Surat in 1689, seems to have been more impressed by their manufacturing skill, and, as he commented, “In their callings, they are very industrious and diligent and careful to train up their children to Arts and Labour. They are the principal men at the Loom in all the country and most of the silks and stuffs at Surat are made by their hands.”6 Three decades later, the English private trader Alexander Hamilton had much the same thing to say when he wrote that they “are very industrious and diligent in their vocation, and are bred to Trades and Manufacturing ground. They are good carpenters or ship builders, exquisite in the weaver’s trade of embroidery which may be seen in the rich Atlaffis, Bottadars and Jemewaars made by them as well as fine Baroach and Navsari Baftas. They work well in Ivory and Agate and are excellent cabinet makers.”7

Clearly, manufacturing skills gave the community a valuable launching pad into commercial enterprise, something that was not the case with other local artisans or weavers whose skills in this regard were as impressive. It could be that the skills and occupational expertise were consolidated more systematically and enjoyed greater community support forged around ties of religion and solidarity. So even while the Parsis’ practices of endogamy and eating together enjoyed support and sanction in India, they were not bound to any particular calling and were able to use their aspirations and adaptability to full advantage. This was evident in the way they adopted the local language (Gujarati) and in building up their proximity to Gujarati commercial society, Hindu as well as Muslim. It was this combination of social ease and pragmatism, manufacturing expertise and a penchant for creativity and mechanical skill that impressed both Europeans and the local administration, which sought them out for a variety of reasons. If Europeans found them effective as brokers and intermediaries who could communicate with weavers in production centers and discern quality textiles, the local rulers were taken by their mechanical skill. There is, for example, an interesting story that a Parsi by the name of Sorabji Kavasji of Surat so impressed the Mughal emperor by repairing a clock (a present from the sultan of Turkey) that the emperor granted him the title of Nek Sant Khan as well as land revenue assignments (jagir) in the district of Surat and the right to collect the custom dues of the port city.8 Nor was this the only instance in of Parsi enterprise; there were other interactions that gave several leading members of the community privileged access to both land investment and commercial opportunity.

Gujarat’s Commercial Expansion in the 16th and 17th Centuries

The expansion of Gujarat’s trade and augmentation of its commercial profile under Mughal rule coincided with the advent of the European trading companies, especially the Dutch and the English in the 17th century. The Portuguese were early entrants to India, having made their way during the rule of Gujarati Sultanate (1391–1573),arriving and established a fortified settlement in the city of Diu (1535) in addition to their factories in Surat and Cambay, where they drove a robust traffic in cloth and other staples. The requirements of European commerce entailed the close cooperation of intermediaries and brokers who enjoyed access to information and to primary procurement centers. Parsis worked alongside Hindu merchants in this expanding line of business, taking charge of procuring textiles for both the company and private traders. Rustam Manekji (1635–1721), for instance, who became one of the most important Parsi merchants of the 18th century and eventually settled down in Bombay, began his career as a broker to the Portuguese, supplying them with consignments and exercising local influence as a leverage in dealing with suppliers and the administration. The family of Rustam Manek had distinct advantages; in addition to their commercial sagacity, they belonged to an influential priestly family, which gave them prominence in their community and enabled them to make connections with the ruling Mughal administration of Surat.9

Doing business and undertaking commercial enterprise in 16th- and 17th-century India required both material and social resources. Besides access to supply chains and to finances for supporting trade, merchants needed to be able to know how to negotiate with local rulers and power brokers and compete with rivals by driving down prices and by holding on to goods before they could secure attractive prices. By and large the business of brokerage and banking in late 17th- and 18th-century Gujarat was in the hands of Hindu/Jain/Bania merchants, who worked as general and commodity brokers for local and foreign merchants, including the European trading companies, and their servants, who participated in private dealings in what is known as the country trade or port to port trade in the Indian Ocean.10 Parsis by the end of the 17th century were also emerging as brokers, especially for Europeans, and were quick to discern new opportunities for expanding their sphere of operations as shopkeepers and provisioners for the English East India Company in Bombay. The late 17th century thus saw Parsis from Gujarat migrate to Bombay, where a fledgling English settlement was trying to establish a base and urgently required the assistance of merchants, service providers, and interpreters to deal with local problems and claims of local bosses. Parsi migration to Bombay did not lead the community to sunder its ties with Gujarat—in fact, as in the case of other merchants, they maintained close links with the family that stayed back in Surat, which remained until the end of the 18th century an important auxiliary commercial center working in tandem with Bombay. Rustam Manek’s family was among the earliest to settle in Bombay, after his career as chief broker to the English East India Company in Surat, a post that carried privileges as well as problems, especially when he fell afoul of the company authorities and faced allegations of falsifying accounts and of cheating the company.

Parsis and the Rise of Bombay

Parsi trade for the first half of the 18th century was generally confined to brokerage, coastal trade, and the trade to the Gulfs of Persia and Arabia in medium-sized shipping. It is hard to estimate numbers for the volume of Parsis’ transactions during this period; one can reasonably conclude that a few of them were beginning to make their mark as shippers and traders investing in the coastal trade as well as in the trade to the Gulfs of Persia and Arabia, their vessels being medium-sized with a tonnage capacity of seven hundred tons dead weight. There were a couple of large families like that of Rustam Manek who stood out as influential traders, who were able to seize the coveted post of official broker to the English East India Company and to consolidate their influence in both Surat and Bombay. The post of chief broker was not an easy charge—Rustam Manek ran into difficulties when the English company disputed his claims, withheld his payments on grounds that he had falsified accounts, delayed their consignments in Surat, and paid less to weavers than what had been agreed upon.11 The dispute lasted for years but eventually Rustam’s sons were able to secure a favorable ruling from the Court of Directors in England, by which time his sons had decided to stay back in Bombay and conduct trade on their own account. Smaller traders would appear to have conducted local and coastal trade in grain, cloth, and coconuts, in addition to mid-level brokerage services to the European companies and the private traders. For instance, we come across names like Munchurji Seth and Nasserwanji Kotiyar, who worked as brokers to the Dutch East India Company. There were others who moved to Bombay as small-time shopkeepers, remaining close to the growing English settlement, supplying their needs and securing in the process a toehold in the economy of the fledgling city. At the close of the 1720s as David White observes, the chief Parsi merchants in Bombay were the Rustamji brothers and the sons of Framji, Dadabhai, and Cowasji, all of whom worked as brokers for the European companies and other merchants, Indian and English.12

The growth of European and especially English private trade in the western Indian Ocean from the 1730s onward, documented by Holden Furber, provided an important backdrop for the escalation of Parsi trade and commercial enterprise in the second half of the 18th century.13 In the wake of Mughal decline and the inability of local governors to contain either the aggression of the Marathas (who defied Mughal authority) or the growing pretensions of the English East India Company, European private traders expanded their operations in the trade of the Indian Ocean, persuading the local merchants of Surat to freight their goods on English/European shipping. Several Parsi merchants joined with European private traders to invest in country shipping and freight their goods to western Asia using European vessels. By the 1750s European private traders had emerged as major players in the trade of the Indian Ocean, their ships becoming better equipped to deal with piracy and more capacious (in terms of tonnage) to handle the freight of Surat and Bombay merchants.14 Parsis collaborated with Europeans, using their ships to transport goods, and became small-time shipowners themselves by the 1750s. This development too seems to have been grounded in Parsi interest in shipbuilding techniques and their ability to copy European design. This is best exemplified in the case of the career of Lowji Wadia, who came to Bombay from Surat as a shipwright. His skills had come to the notice of a local Englishman, who persuaded Lowji to move to Bombay, help build the dry dock in the city for repair, refurbishing and building East Indiamen in the city.15 Lowji and his sons, along with the carpenters who had moved with him, gave an excellent account of themselves, and their example encouraged Parsis from Gujarat to follow suit and settle down in the new city and invest in the city’s shipping and freight traffic.

However, trade and shipping were not the only concerns of the community. They were open to the new opportunities that the British settlement held out, which included local management and revenue farming. Without exaggerating the cordiality between Parsis and the English, it is obvious that the community by and large impressed the English company with its skills, which included the ability to work well with locals. A century earlier, Dorabji Nanabhai Patel, for instance, the earliest immigrant who worked first with the Portuguese and later with the English, showed exemplary courage in 1668 in leading from the front with the help of local Koli fishermen to save the English garrison as it battled against plague and an unexpected attack from local rivals.16 Connections with Europeans ensured the community’s access to an expanding circuit of commercial information and alerted them to possibilities of profit in export trade and shipping in close collaboration with the English. The result was a growing assertion of commercial ambition and the formation of small trading partnerships that set the stage for incremental advancement. Business partnerships with European private traders in the sphere of export trade as well as marine insurance or respondentia, (i.e. a loan on maritime interest on the supply of goods aboard a ship) became a noticeable feature in the commercial history of Bombay, and Parsi traders began to invest substantially in the cotton trade of western India, the staple coming into Bombay before being shipped to Bengal and subsequently to China. For the 1740s and 1750s, we have references to Parsis coming together to form small partnerships to invest in export and coastal trade.

Parsis and European Private Trade: Bombay in the Century of Transition

The second half of the 18th century thus witnessed an appreciable increase in Bombay’s coastal trade as well as trade with China and Southeast Asia, where Parsis, along with local merchants of Hindu and Muslim extraction, began to participate in increasing numbers. Dates and pearls from western Asia flooded Bombay’s markets, while Chinese ceramics and silks found new buyers. Bombay’s coastal trade in grain, coconuts, and textiles enhanced both the cosmopolitan as well as the local profile of the city in the region. The growth of marine insurance and respondentia as a business became a particularly prominent feature of the city’s commerce, one in which Parsis appear to have vigorously participated alongside European merchants. Eventually the growth of the respondentia business seems to have facilitated the rise of what is known as the “consignment trade,” which became especially important in the closing decades of the 18th century.

The essence of the consignment system, as Asiya Siddiqi suggests in the context of the cotton and opium trade of the early 19th century, was risk sharing.17 But even before this, through the 1750s and 1760s, we come across instances of Parsi brokers acting as agents for European private merchants. A venture would typically start with a shipper or a group of them consigning a cargo to an agent. The latter was entrusted with the charge of shipping it and selling it in a market. The shippers were backed by respondentia lenders and dealers who loaned money to them to get cargoes ready for the voyage. The agent to whom these goods were consigned normally paid an advance to the shipper equal to two-thirds of the estimated value of the goods, which were considered the property of the shipper until they were finally sold and the accounts adjusted to mutual satisfaction. The terms on which respondentia lenders agreed were laid down in the form of agreement contract wherein they promised to give up their claims if the goods were lost due to an unforeseen accident. A shipowner or freighter presumably raised respondentia money at a higher rate of interest to compensate the lender, for there was a provision that expressly stipulated that no repayment be made if the voyage failed for some unforeseen reason. Respondentia lenders in turn entered into detailed insurance arrangements as a security backup. Two features distinguished the expanding respondentia business in Bombay from the mid-18th century: one was the growing collaboration between European private traders and Indian merchants, and the other was a consolidation of the integrated credit networks that supported this dense network of Anglo-Indian private trade. Banias and Parsis were involved as brokers and respondentia lenders, insurance agents, and shippers, while European traders functioned as agents for their associates back in England as well as being independent respondentia merchants.18

These changes were in fact symptomatic of the major reorientation in the structure of the Indian Ocean trade beginning in the 1760s when European private trade shifted almost entirely toward the east—China and Southeast Asia. This eastward alignment, referred to by Peter Marshall as “the swing to the east,” was characterized by the increasing assertion of commercial interests and their political dominance.19 Between 1757 and 1765, when British victories in Bengal assured the English East India Company surplus funds to invest in trade without importing specie from Europe, the trade advantage shifted decisively in favor of England, where free traders now saw huge opportunities both for campaigning against the English East India Company’s monopoly on the trade to China and Great Britain and for marketing British industrial products to a captive Indian market. Thus by the 1780s company servants (current and former) formed agency houses and along with British free traders began to drive a huge trade with China, in which cotton and then opium featured as staples.

Parsis and the new Trading Order: Articulating a Colonial Economy

It was in the context of the emergence of the agency houses in Bengal and Bombay, that Parsi trade and shipping burgeoned, enabling several traders to enjoy unprecedented success and to claim an altogether new status in relation to the new dispensation under the English East India Company. Parsi business expanded as English agency houses came to depend on Parsis as their collaborators, and in some cases the association went beyond that of a business partnership and rested on very close ties of friendship. Agency houses emerged in a context of private trade; in most cases, a young servant, i.e., a person choosing to work for the English trading company, or to strike out on his own was most often the son of a London shipowner’s family. He came to work in India and, after a few years, started to buy and sell commodities on his own account. If and when he met with success, he registered a new business in partnership with a friend or two and by pooling resources mounted trading operations.20 The financial basis of agency houses and their operations was augmented by savings and deposits of the servants of the English East India Company, who were formally prohibited from trading but who looked out for promising investments and ways of remitting their fortunes back to Britain.21 The close relation between company servants and the agency houses gave the latter greater leverage with the company government when it came to matters of regulating and ensuring cotton supplies and even its prices.22

It was from these modest beginnings that agency houses came into existence and subsequently expanded so that by the 1820s there were ten agency houses in Madras, fifteen in Bombay, and forty-six in Calcutta that undertook the marketing of export goods and became involved in what could be called asset or wealth management.23 Their financial base was sustained and supported by the savings of depositors—mostly retired personnel of the company—and they undertook the responsibility of marketing the goods that were shipped on their account. Merchants consigned their goods to the agency houses, which provided an advance to them in anticipation of what the sales were expected to yield. Historians have argued that such a system of consignment exposed shippers to risk while leaving the agents virtually risk-free. Shippers had no way of questioning the price at which their cargoes were sold, while agency houses were only too happy to operate on the capital of the shippers, blithely collecting their commission. They liked pure commission, for, as was often remarked, “Income comes to you without asking, in the snug way of the China business.”24

The emergence and ascendancy of agency houses in western India went through several identifiable stages.25 Pamela Nightingale documented the growing influence of the agency houses and their collaborators in determining the East India Company’s policy of expansion in the region, where the thrust was directed toward the acquisition of the cotton-rich tracts of Gujarat. In the years between 1780 and 1800, the private traders and agency houses were primarily interested in raw cotton, which was sent to Calcutta to supplement the export and re-export trade to China, where it proved to be a valuable commodity especially to buy tea. The increasing demand for tea in Britain after the Act of Commutation in 1783 substantially lowering tariffs on tea imports meant that export commodities were urgently required to service and support the emerging triangular trade between India, China, and Europe. Parsis who were already familiar with the intricacies of cotton trade and manufacture stepped forward as partners as well as commission agents and guarantee brokers. Parsi interest in China became increasingly conspicuous—we have references to the Ready money family, which owned and sent ships to China and made enormous fortunes, followed by several others including the notable instance of Jamsetji Jejeebhoy, partner and associate in the firm of Jardine Matheson and Company. Alexander Adamson, for instance, worked very closely with Dady Nasserwanji and Dady Ardaseer, who owned ships, sold and bought them, and exported cotton to China. Yet another instance of the collaboration between Parsis and agency houses in this early period of the late 1780s and 1790s was Pestonji Bomanji, who worked with the house of Bruce Fawcett and Company and who owned at least ten ships of considerable tonnage, which were deployed in the cotton trade with China.26

Statistics on trade and shipping in Bombay give us some idea of the city’s exports. From 1800 to 1813, of the 129 or so vessels registered under the port of Bombay, thirty-three carried raw cotton to China.27 The reasons for this sudden expansion lay in a complex combination of local and global factors that had serious implications for Bombay’s merchants, who saw the opportunity to capitalize on the demand for cotton in China and the demand for tea in Europe. Their location in India enabled them to articulate a triangular trade that funneled Indian exports of raw cotton (and later opium) to China, where tea was bought in exchange and shipped to England. The newly acquired possessions of the East India Company in the Indian subcontinent thus came to assume central importance in the emerging colonial economy, which produced new and complex commercial linkages. The acquisition of the cotton-rich territories in Gujarat by the end of the 18th century, induced in part by the pressure created by British private traders and agency houses, produced a boom in cotton exports to China that simultaneously resolved the company’s need for funds to finance the official tea trade and the remittance requirements of company servants and private traders.

The triangular trading relationship that evolved thus worked as follows: England imported huge quantities of tea from China; this was exchanged for the cotton and opium from India that was in demand in China. This in turn facilitated flows of remittance for the English East India Company and the private merchants, whose operations the company had always encouraged. As early as 1773, it had been decided to float schemes to attract money from Bengal to Canton to help the English company with tea purchases. The logic was that if bills on London at a reasonable rate of exchange were freely available, large sums of money would flow from English traders, who could use this channel to remit funds back home. Thus an Englishman in Bengal or Bombay wishing to send back his fortune could do so via Canton; he could, for instance, lend it to a shipper to buy cargoes for Canton. The implicit understanding in such a transaction was that on the sale of the cargo, the proceeds would be offered to the company’s agents in Canton, who for their part would provide bills of exchange on London. This mode of multilateral remittances solved the needs both of the East India Company and of private traders intent on sending their profits home. It was this combination of circumstances and imperatives that led to the triangular trade structure that helped consolidate the emerging colonial economy benefiting a variety of agents, Indians as well as Englishmen, and especially Parsis, who built ships, provided credit, and helped remit fortunes of Europeans and Indian traders in the Indian Ocean.

Parsis operated within the evolving trade structure in a variety of ways. Initially between 1790 and 1820, they participated in Bombay’s export trade by shipping cotton on their own account, providing ships for freight, as well as providing capital as loans to other shippers at about 9 percent interest in addition to the dividends they earned in the business of marine insurance and respondentia. They acted as consignment or guarantee brokers for European agency houses, lent them money, and traded in cotton and opium, consigning these to the agency houses in Canton, who made huge profits, without sharing the burden of price fluctuations. Until the first quarter of the 19th century, the partnership worked well, likened by Asiya Siddiqi to a tight-knit oligarchy, whenever company servants who were forbidden to trade invested their funds with the Parsi brokers, who would then remit their profits to England. The charmed circle worked well, for many of the agency houses had close connections with the government, and all parties concerned were able to retain monopoly control over the business. Siddiqi describes the ways in which Indian and European merchants of Bombay persuaded the company authorities to restrict access to cotton screws (used for compressing cotton into bales), so as to regulate volume of cotton exports and thereby keep prices high. Siddiqi also rightly notes that the end of the 18th century saw conditions of political fluidity in the Indian Ocean and that in the wake of the Napoleonic wars, Indian merchants were able to trade freely with Europe and even act as agents for the French.28

Parsis Magnates and Merchants: The Case of Jamsetji Jejeebhoy

The full-fledged articulation of the triangular trade in the 19th century coincided with the replacement of cotton by opium as the staple export item and the ascendancy of the house of Jamsetji Jejeebhoy, who worked in partnership with Jardine Matheson and whose operations reveal the internationalization of Bombay’s trade. This was not the only house, but in its scale of operations it was certainly impressive and reflected the complex layers of Bombay’s new trading system, which was on its way to becoming a colonial one. Jamsetji’s early life was played out amid the conditions of commercial possibilities at play: competing European interests and ambitions in the Indian Ocean, especially China; the network of private friendships between Parsis and Europeans; and the advantages that Parsis enjoyed in their dealings with the Europeans. Jamsetji himself worked his way up from being the son of a modest weaver, joining his uncle on several China trips, amassing a huge fortune by exporting cotton to Britain during the Napoleonic wars, and then making the acquaintance of William Jardine, who went on to become a key player in Canton’s opium business and who relied on Jamsetji as his principal collaborator. Between 1804 and 1820 Jamsetji, like so many of his community, traded with China, sending ships and exporting goods.29 Whether he functioned as guarantee brokers to other traders is not clear; Siddiqi suggests that the commission business did not find favor with Jamsetji and that export trade and shipping were at the forefront of his firm’s operations. In many ways, then, his operations at this time resembled those of Muslim shippers and export merchants in the heyday of Mughal times, when they enjoyed the tacit support of the Mughals and benefited from the massive integration of markets thanks to the simultaneous rise of three world empires. The only material (but by no means insubstantial) difference was that the trading structure that had emerged was decidedly to the advantage of Britain, with substantial pickings for those groups like the Parsis who were in position to act as partners in empire, as collaborators with the English to take full advantage of the profits that were to be made in the new triangular trade that had emerged. They were, however, not insulated from the pressures and constraints of the colonial economy, whose changing contours undermined the later commercial operations of the community.

From the 1820s, the house of Jamsetji became heavily invested in the opium trade of Bombay, working in close cooperation with the European agency houses on one end and with the local Gujarat-Marwari sahukar syndicates on the other. The latter dominated the supply chain of opium in Malwa, where opium was produced and over which the East India Company authorities failed to exercise any degree of control.30 Shipments of Malwa opium found their way to Canton through the ports of Daman (under the Portuguese) and Bombay, so much so that between the beginning of the 19th century and the 1830s, shipments of opium belonging to west-coast merchants increased substantially, 31 from about 1,346 chests in 1801 to 21,988 in 1839.32 In the 1830s Jamsetji, thanks to his contacts with local suppliers and intermediaries, was able to corner a huge proportion of the volume of opium, sending it to his partner Matheson in Canton as well as to large firms in Calcutta. His profits arose primarily from the volume of consignments that he sent and to a lesser extent from the bills-of-exchange business, which ran into difficulties as time went on. The China trade was intimately linked with the bills-of-exchange business; traders drew from the company’s treasury bills to Canton where they were used to buy tea. Profits from tea were subsequently remitted to England by the bills they on the Court of Directors in England. Parsi traders also preferred to have their money remitted through bills on the company, which could be sold to interested remitters in India; a second method employed by Jamsetji was to sell the bills of his own firm to Europeans in Bombay and Calcutta to be discounted by his agents in London, who received funds for this purpose from his account with Jardine Matheson.33

Parsi trade thus became closely associated with what historians have referred to as the colonized trading economy of India, in which the principal advantages lay with the English and the trading patterns of the Indian subcontinent were deliberately aligned to the requirements of the metropolitan economy. Even though indigenous merchants and particularly the Parsis were able to work this economy with some success, albeit as “comprador capitalists,” the enterprise was not without risks and uncertainty.

Parsi trade, however, was not confined to the export trade and shipping business, even though that was what attracted both investment and notice by later commentators. It was certainly a sector where a firm like that of Jamsetji Jejeebhoy made enormous profits. By the 1820s his profits were estimated at around twenty million rupees,34 but by the late 1830s he along with other Parsi merchants encountered difficulties with relation to remittances and price fluctuations in the China markets. In fact, the arrangements for the triangular trade were designed to benefit the Europeans, who did not face the same risks as the shippers. Thus, as Siddiqi has argued, the system was unequal with the consignment system providing capital for the agency houses and exposing the shippers to the fluctuations of prices. There were times when senior Parsi merchants resented the manipulation that agency houses were guilty of, not to mention the problems that they faced as far as supplies were concerned. Jamsetji complained about the indifference his European associates demonstrated when the going was rough; a letter that he wrote in 1849 to William Jardine said quite emphatically, “The opium trade I Know little better than many people do, respecting the market and consumption and having transacted a long series of years in this drug speculation. Care must be taken in purchasing largely when cheap and not to buy when dear but you sanguine too much upon China friends. You must have received China news by this mail we are prepared to sustain heavy losses; you did not use good judgement with caution—you have received several communication from me but you pay little attention.”35 The message was clear: Jamsetji was having to bear heavy risks and was clearly chafing at the indifference and lack of support from his European associates. The situation got worse in the 1840s when the problems of remittances became acute and underscored the lack of symmetry in the system.

The investment in the opium trade was subject to serious risks, which became increasingly evident in the 1840s. Remittances posed a special problem; for one, it was difficult for Parsis to compete with the British and American banking systems and remittance networks, and this, compounded with the fact that selling bills on London also became difficult, made the business precarious. Jamsetji expressed this on more than one occasion in his letters.36 When the American bills system collapsed after gross over-speculation, the situation became even worse for the Parsis as they found it impossible to get good bills on London and their stocks in London accumulated without getting sold. It was clear that the business that had started off so propitiously was overexposed to risk and uncertainty over which the Parsis had no control as a result of the structural constraints they had to work under.

Challenges and Constraints of the 19th-Century Colonial Economy: The Cotton Boom and the Share Mania in Bombay

Clearly, then, even in their enterprise as collaborators and comprador bourgeois men, Parsis were thwarted by the constraints and contradictions of the colonial structure in which they operated. A number of challenges were encountered. They had little access to English markets. They could not sustain exports of Chinese goods to London, or, for that matter, export British produce to India. Further, the late 1840s and 1850s saw major changes in the region’s trading structure as a result of the aggressive expansion of British free trade and the arrival of steam shipping. Country shipping was no longer attractive. Maintaining and running the ships was expensive. Costs escalated and profits fell. The result was a severe contraction of trade, leading to the virtual collapse of Bombay’s country shipping and to the unchecked ascendancy of British free trade.

This did not mean, however, that Parsi enterprise was entirely wiped out. New opportunities flowed from the multiplier effects of the cotton trade, especially in the sector of domestic and inland traffic in cotton. Operating as customs and revenue farmers in the cotton tracts of western and central India, in the territories of Poona, Khandesh, and Ahmednagar the community was energetic in developing cotton bulk handling and transport. The family of Vikaji Merji, for instance, sent cotton in 1825 from Berar, built cart roads and bridges, and at the height of their prosperity had head offices in Bombay with branch firms and corresponding houses in every important town in western India, Calcutta, China, and Singapore.37 This investment in cotton continued to be an important source of income for the community, enabling them to transition into the next phase of the island city’s cotton trade and thereafter into industry and enterprise. Parsis were thus part of what Ulbe Bosma calls the “Asianization” of the opium chain, which “served to strengthen intra-Asian mercantile networks and provided the basis for extending their activities into other commodity chains—notably cotton yarn—fueling the industrialization of India, China and Japan.”38 In fact, the afterlife of Parsi enterprise in China—Hong Kong, Macao, and Shanghai—testified to the ability and reserves of the community in diversifying their enterprise, moving into banking, real estate and share brokerage, retail trade, and the garment business.39

This brings us to the final phase of Parsi trade in the 19th century, which coincided with the rapid expansion of Bombay as the great commercial metropolis of British India. Bombay’s growth was once more associated with a new boom in the export trade of raw cotton, which was reflected in the perceptible expansion of the banking sector. India was the second largest supplier of raw cotton after the United States of America. The promotion of Indian cotton became even more pressing after the American Civil War, which disrupted the cotton supplies to England that were so vital for England’s cotton textile industry. To offset the losses, the decision to experiment with Indian cotton, despite reservations about its quality and twist, was made, and the result was the famous cotton boom of the 1860s. This led to new modes of integration between European export trade and local commercial society, who came to organize new financial associations and institutions. In fact, most scholars argue that even while the rapid development of the raw cotton trade was responsible for the steady growth of Bombay, the island city remained comparatively more cosmopolitan, with its European population interacting with local merchants on terms of greater parity. The Bombay Chamber of Commerce, formed in 1836, was a joint venture with British and Parsi trading interests and had a very different profile from that of the Calcutta Chamber of Commerce, which was decidedly antithetical to Indian interests.

The unprecedented expansion of the cotton trade had important consequences. A cursory look at available statistics for Bombay’s trade reveals a marked jump in exports.40 This drew in investments from local financiers and brokers that extended to banking and financial institutions. A surge in speculation in these new credit and commercial institutions was directed through reclamation companies that were part of the city’s ambitious projects of urban improvement and development. These were joint ventures of European, Parsi, and Gujarati capital.

How did this come to pass, and how did it affect Parsis and their enterprise? While the actual shipping of raw cotton exports was undertaken by English managing agencies, local businessmen worked as guarantee brokers for European firms and participated in the emerging conditions of speculation. European enterprise as well as joint Anglo-Indian enterprise took the form of insurance companies, banks, and financial companies that assumed responsibility for providing large advances to European firms handling the export trade. Marika Vicziany details how this consignment system worked and how it involved a network of intermediaries.41 The consignor in most cases obtained the advance from the agency houses either through the agency’s consignment department or indirectly through an independent consignment broker (mostly Gujarati and occasionally Parsi traders). The consignor needed the good word of a guarantor, which meant that the broker doubled up as guarantor as well, the guarantor being either a well-known Bombay firm or the Bombay agent of an upcountry trading firm. It would appear that the bulk of the business of guarantee brokerage was in the hands of Gujarati and Marwari merchants. Parsis were not excluded in this list, but for the most part their bigger merchants were found in banks and European companies. In fact, by 1864, according to Tanya Lehrmann, there were about fifty thousand Parsis in Bombay occupied in middle class activities—trade, real estate, bookkeeping, clerical work, and banking.

The trade in raw cotton resulted in huge volumes of capital coming into the city, which encouraged speculation. The expansion of cotton exports stimulated the system of indiscriminate advances by banks to the agency houses and encouraged futures trading in cotton, and this along with the imports of silver produced conditions for a share mania. According to estimates recorded by contemporaries, the cotton trade gave Bombay eighty-one million sterling pounds in five years, and this excess money stimulated the formation of new joint stock companies and financial associations, especially associated with real estate projects, something that the Bombay government had supported earlier.42 By 1863, a great impetus for speculation appeared when the Back Bay Reclamation Company and the Financial Association of India and China were formed and their shares were floated. These shares enjoyed a huge demand, especially when they were put up for public auction in 1864; with a paid-up value of two hundred thousand rupees, they realized 10.5 million rupees. Financial agencies and reclamation companies mushroomed.43

To understand the trade in shares and how this produced an artificial bubble of prosperity, it is necessary to understand the basic features of time bargains and of the trade in shares that followed the formation of banks, financial associations, and reclamation companies, in which Europeans worked alongside local Gujaratis and Parsi merchants. The Back Bay Company, for instance, was promoted by Michael Scott, the partner of the firm of Ritchie Steuart and Co., Cowasjee Jehangir, and Premchund Roychund, all of whom had good credit in the city. The same went for the Financial Association of India and China, which had on its board men like James Alexander Forbes, A. F. Wallace, and Cowasjee Jehangir. These were not bubble companies and may have continued successfully in quieter times; however, the boom mood led to wild speculation, and their shares came under great demand. The new companies were predicated on time shares, which were contracts in which one party agreed to sell the other party a certain number of shares of a certain company, to be delivered on a certain date in the future at a price agreed on at the time of making the contract. According to the contracts, shares had to be physically delivered to the buyer, but during this period, because of speculative tendencies and people’s interest in making money by realizing the premiums or difference of price on contracts, these shares were rarely delivered. D. E. Wacha, who wrote an excellent contemporary account of the share mania, explained it thus: Company A out if its funds bought from Company B two shares of a company like the Back Bay for a delivery in December at twenty thousand rupees each. After the contract was completed, A sold to C the same two shares for forty thousand rupees, making a huge profit. This earned A a reputation in the market, where he was talked of as having made a killing, thereby encouraging similar transactions.44 The result was a feverish wave of buying and selling, predicated on cotton earnings. The wave crashed as soon as the American Civil War ended and the share market collapsed. Bankruptcies and liquidations ensued. By the end of June 1865, the situation was dire—overdue bills, crises of solvency, and the ruin of several families marked a dark moment in Bombay’s financial history. On July 1, 1865, the day designated for settlement of the time bargains, merchant after merchant declared insolvency, and several companies went into liquidation. The first major failure was that of the house of Cama, which affected other banks and financial institutions.45 By the end of the following year, the collapse was complete, as more than sixty merchants of Bombay lost over a million rupees in speculation, while the liabilities of twenty-four bankrupt firms alone amounted to 190 million rupees, with others running up a further cumulative loss of seventy million rupees.

Though several Parsis were ruined in the speculations,46 there were senior men in the community, like Rustamji Jejeebhoy, who had distanced themselves from the share mania and continued to steer their business. The crisis and its aftermath did not put an end to the commercial ambitions and aspirations of the community, which remained well entrenched in business. Many turned to industry and entrepreneurship. Cowasji Dawar (1814–1873) set up the first cotton mill in Bombay. The capital for this venture came from the cotton and opium trades, in which his father had a share, whereas Cowasji fully capitalized on his local advantages and combined these with new techniques of management and joint stock enterprise. His firm played a pioneering role in the history of mills in India, and his firm enjoyed handsome profits sufficient to finance new investments. This experiment predated the share crash, but what was significant was the ways in which the community successfully negotiated the situation to expand their investment in trade and industry. Several others followed, such as the Petit family, and even though the industry slowed down after the 1890s, there is little doubt that the community consolidated its position as key players in the business world of Bombay.

Alongside the growth in Parsi manufacturing interests in western India was their expansion in East Asia. The emergence of Shanghai as a major port and the growth in Indo-China trade in the late 19th and 20th centuries saw Indian firms, and notably Parsis, emerge as key players who set up banks and export-import firms. Parsis were able to make use of their older connections and move into the new export-import trade and emerge as important agents in the new trading arrangements that made up the global economy.

Concluding Observations

The story of Parsi commercial enterprise has continued to engage the attention of sociologists, legal scholars, and historians who have tried to identify the key factors and processes in the making of what one may well call the British Raj’s model minority. In the community’s self-representation, evident in the histories that they wrote, commercial enterprise and loyalty to the government were their defining virtues. D. F. Karaka’s history of the Parsis was a story of great individual leaders—traders and philanthropists who never tired of working for the public good as well as for personal profit; the Wadias, the Maneks, the Jejeebhoys and Petits whose contributions to Bombay were unparalleled. More recently we have had academic contributions that look closely and critically at the Parsis’ experiments with British colonial law47 and at their poetic and textual inheritances and at the ways in which the community sought to safeguard and shape its identity, while adopting important characteristics of the indigenous social environment.48 There is little doubt that this endogenous community were adventurers, responded to the call of trade and wealth generation, and generated creative relationships in changing political and economic circumstances. To this they brought adaptive technical abilities, adventurous imagination, and a commitment to public welfare that transcended the interests of the community. From Rustam Manek, who successfully defended his claims as chief broker to the English East India Company, to Jamsetjee Tata, who pioneered India’s steel industry, the story does suggest an unusual concentration of energies and business intelligence that enabled the community to embody the best practices of private-public partnership. Nowhere was this more evident than in the community’s investment in the physical space of Bombay and in the social and cultural life of the city. If the Parsis made huge fortunes in the China trade, they saw to it that Bombay boomed and enjoyed the benefits of new public services and impressive buildings. The community invested in education and in hospital and asylum reform, and even if some of this enterprise was oriented to their own community welfare, there is little doubt that they entertained modern conceptions of public good. Commercial success translated into modern ideas of the common good and gave the community a distinct identity that was displayed in various ways—in fair business practice, public welfare, and in the projection of a distinct cultural profile that found creative expression in humor and theater as well as in an identifiable legal self and social customs.

Primary Sources

Scholarship on the Parsis has drawn from a variety of sources in several languages ranging from Persian, to Gujarati, to English and other European languages. Studies on Parsi trade have examined the records of the European East India Companies, especially the English East India Company, to track the story of the community’s dealings and transactions. The house of Jamsetji Jejeebhoy maintained an extensive correspondence with its partners, and these letters are preserved in the library of the University of Mumbai. These are invaluable for understanding the ramifications of the far-flung trading enterprise of the house. Reading this alongside the Jardine Matheson Archive housed in the library of the University of Cambridge, scholars have been able to study the trade networks that connected China, India, and Britain and in which the Parsis were key players.

Further Reading

Bulley, Anne. The Bombay Country Ships 1790–1833. Richmond, U.K.: Curzon, 2000.Find this resource:

Hinnells, John, and Alain Williams, eds. Parsis in India and the Diaspora. London: Routledge, 2007.Find this resource:

Karaka, D. F. History of the Parsis Including Their Manners, Customs, Religion and Present Position. London: Macmillan, 1884.Find this resource:

LePichon, Alain, ed. China Trade and Empire: Jardine, Matheson &Co. and the Origins of British Rule in Hong Kong, 1827–1843. New York: Oxford University Press, 2006.Find this resource:

Mitra, Sharafi. Law and Identity in Colonial South Asia Parsi Legal Culture, 1772–1947. New York: Cambridge University Press, 2014.Find this resource:

Palsetia, Jesse S. The Parsis of India: Preservation of Identity in Bombay City. Leiden, The Netherlands: Brill, 2001.Find this resource:

Palsetia, Jesse S. Jamsetjee Jejeebhoy of Bombay: Partnership and Public Culture in Empire. Oxford Scholarship Online, 2015.Find this resource:

White, David L. Competition and Collaboration: Parsi Merchants and the English East India Company in 18th century India. Delhi: Munshiram Manoharlal, 1995.Find this resource:


(1.) David L. White, Competition and Collaboration: Parsi Merchants and the English East India Company in 18th Century India (Delhi: Munshiram Manoharlal, 1995), xi.

(2.) D. F. Karaka, History of the Parsis Including Their Manners, Customs, Religion and Present Position, vol. 2 (London: Macmillan, 1884), 272–273.

(3.) The Qissa I Sanjan, trans. S. H. Hodivala. Also see S. H. Hodivala, Studies in Parsi History (Bombay: published by author, 1920). Hodivala was a respected scholar and studied Parsi chronicles and documents with critical scrutiny. For more recent treatment see Alan Williams, “The Structure, Significance and Poetic Integrity of the Qesse-ye Sanjān,” in Parsis in India and the Diaspora, ed. John Hinnells and Alain Williams (London: Routledge, 2007), 15–34.

(4.) Rukhsana Nanji and Homi Dhalla, “The Landing of the Zoroastrians at Sanjan: The Archeological Evidence,” in Hinnells and Williams, Parsis in India, 35–59.

(5.) Jesse S. Palsetia, The Parsis of India: Preservation of Identity in Bombay City (Leiden, The Netherlands: Brill, 2001), 9.

(7.) Alexander Hamilton, A New Account of the East Indies, vol. 1 (London: Printed for C. Hitch, 1744), 161–162.

(8.) Karaka, History of the Parsis, 22.

(9) White, Competition and Collaboration, 49.

(10.) M. N. Pearson and Ashin Dasgupta, India and the Indian Ocean 1500–1800 (Delhi: Oxford University Press, 1999).

(11.) White, Competition and Collaboration, 44–47.

(12) White, Competition and Collaboration, 101.

(13.) Holden Furber, Bombay Presidency in the Mid-Eighteenth Century (Bombay: Asia Publishing House, 1965).

(14.) Lakshmi Subramanian, Indigenous Capital and Imperial Expansion: Bombay, Surat, and the West Coast (Delhi: Oxford University Press, 1996), 53.

(15.) Anne Bulley, The Bombay Country Ships, 1790–1833 (Richmond, U.K.: Curzon, 2000), 12. Bulley in fact refers to the observations of Captain Fitzmaurice, who was struck by the ability of Parsi shipwrights to copy European design perfectly, almost slavishly.

(16.) Karaka, History of the Parsis, 51–52.

(17.) Asiya Siddiqi, “The Business World of Jamsetjee Jejeebhoy,” Indian Economic and Social History Review 19 (1982): 301–324.

(18.) Lakshmi Subramanian, “Reaping the Risks of Transition: Merchants and Trade in Western India, 1750–1818,” in The Trading World of the Indian Ocean, 1500–1800, ed. Om Prakash (Delhi: Pearson, 2012), 289–300.

(19.) Peter Marshall, East Indian Fortunes: The British in Bengal in the Eighteenth Century (Oxford: Clarendon, 1976).

(20.) Alain Le Pichon, ed., China Trade and Empire: Jardine, Matheson & Co. and the Origins of British Rule in Hong Kong, 1827–1843 (New York: Oxford University Press, 2006), 5.

(21.) Amales Tripathi, Trade and Finance in the Bengal Presidency, 1793–1833 (Calcutta: Orient Longmans, 1956).

(22.) Bulley, Bombay Country Ships, 104–105.

(23.) Pichon, China Trade and Empire, 5–7. Pichon lists the various British agency houses.

(24.) Michael Greenberg, British Trade and the Opening of China, 1800–1842 (Cambridge, U.K.: Cambridge University Press, 1962), 149.

(25.) Pamela Nightingale, Trade and Empire in Western India, 1784–1806 (Cambridge, U.K.: Cambridge University Press, 1970).

(26.) Bulley, Bombay Country Ships, 101, 106, 109. Bulley specifies the associations of Parsis with the agency houses and also refers to an important and interesting definition of the respondentia business by David Scott, a prominent merchant. Scott defined it as a loan made by a monied house to a house wishing to borrow, for which they received interest, around 11 to 12 percent, for the voyage, the parties lending the money having good hypothecated to them and paying the insurance, the sum they receive is without reference to whichever voyage is long or short.

(27.) Amar Farooqui, Opium City: The Making of Victorian Bombay (Gurgaon, India: Three Essays Collective, 2006), 9.

(28.) Siddiqi, “Business World of Jamsetjee Jejeebhoy,” 306.

(29.) Pichon, China Trade and Empire; Siddiqi, “The Business World of Jamsetjee Jejeebhoy.”

(30.) Amar Farooqui, “Opium Enterprise and Colonial Intervention in Malwa and Western India, 1800–1824,” Indian Economic and Social History Review 32 (1995): 447–473.

(31.) Bulley, Bombay Country Ships, 163.

(32.) Siddiqi, “The Business World of Jamsetjee Jejeebhoy,” 309.

(33.) Siddiqi, “The Business World of Jamsetjee Jejeebhoy,” 310.

(34.) Siddiqi, “The Business World of Jamsetjee Jejeebhoy,” 307.

(35.) Diaries of Sir Jamsetjee Jejeebhoy, University Library Mumbai, Acc.No.359. Letter to Jardine Matheson dated September 3, 1849.

(36.) Siddiqi, “The Business World of Jamsetjee Jejeebhoy,” 315.

(37.) Karaka, History of the Parsis, 124–125.

(38.) Ulbe Bosma and Anthony Webster, eds., Commodities, Ports and Asian Maritime Trade since 1750 (Houndmills, U.K: Palgrave Macmillan, 2015) 2.

(39.) Madhavi Thampi, ed., India and China in the Colonial World (New Delhi: Social Science Press, 2005).

(40.) Raymond Sullivan, One Hundred Years of Bombay (Bombay: Times of India Press, 1937), 68.

(41.) Marika Vicziany, “Bombay Merchants and Structural Changes in the Export Commodity, 1850 to 1880,” in Economy and Society: Essays in Indian Economic and Social History (Delhi: Oxford University Press, 1979), 174–180.

(42.) D. E. Wacha, A Financial Chapter in the History of Bombay City, 2d ed. (Bombay: Cambridge, 1910), 14.

(43.) Wacha, Financial Chapter, 24–25, 37–38.

(44.) Wacha, Financial Chapter, 45.

(45.) Wacha, Financial Chapter, 212–213.

(46.) Vicziany, “Bombay Merchants and Structural Changes,” 187. Wacha also identified a number of prominent Parsis who went bankrupt. Wacha, Financial Chapter, 221.

(47.) Mitra Sharafi, Law and Identity in Colonial South Asia Parsi Legal Culture, 1772–1947 (New York: Cambridge University Press, 2014).

(48.) Jesse S. Palsetia, The Parsis of India Preservation of Identity in Bombay City (Leiden, The Netherlands: Brill, 2001).