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How Business Interests Fueled India’s Division

By Kona Aditya Kalyan


This article explores the economic aspects of the Partition of India and the role of businessmen in this historical event. It highlights the fact that businesses with valid economic rationality tended to be in favour of the partition, regardless of religious affiliation. The article examines the rise of communalism, not only on religious lines but also on caste-based organizations, with traders and merchants organizing themselves into these communities.

There is not much literature on the Partition of India that places emphasis on its economic aspects and the role of businessmen is an even more obscure construct in the history of partition. However, it is interesting to know that from 1942 onwards, businesses with valid economic rationality tended to be in favour of the partition (Markovits 76). This fact is true not only in the case of Muslim businessmen but also in non-Muslim businessmen too. In the 1870s, the first exclusive Muslim Association was set up which was formed with the involvement of the two richest Muslim business people in Mumbai. The fact that this was just a coincidence seemed to be extremely unlikely. On the heels of this association, Hindu Revivalist movements also started to follow with the contribution of Hindu merchants who were focused on reviving the Hindu brand, particularly in the North of India (Markovits 77). At the same time, the movement for the propagation of Hindi with its strong anti-muslim overtones got support from Hindu Businessmen. Religious communalism wasn’t the only form of communalism. Caste-based organizations too started coming up, with traders and merchants organizing themselves into these communities (Markovits 7).

One of the most influential statements regarding the relationship between the economic role of Muslims in India and the growth of Muslim communal politics was put forward by W.C. Smith in his book “Modern Islam in India” where he says that although he despises communalism of any sort, the rise of Muslim communalism has its root in the rising Hindu bourgeoisie entrenched society (Markovits 79). This observation was made without any significant empirical evidence and was at the risk of being a statement that was politically charged but substance empty. However, with the rise of associations with those of the same religion, Muslims started feeling the pinch of not having equal representation in the commerce of India. 

The problem was not that other religious communities did not want to work with Muslims as co-religious activities in the country were quite rare. Family businesses would be normally limited to the members of the family or people of the same caste. For example, Marwaris liked to conduct business only with other Marwaris. This was also the case within the Muslim community where the Khojas rarely formed any sort of business associations with the Memons. However, even with the presence of many small Muslim associations, there was no significant change in the positions Muslims held in prominent commerce positions. The formation of the Muslim Chamber of Commerce in Calcutta was formed to change the same(Markovits 81). With the reformations in the commerce industry In Bengal, one seat was reserved for a Muslim Association which was filled in by businessmen like M.A.H Ispahani and Adamji Haji Dawood. This was mainly done to promote Muslim Businessmen to the top positions that finance had to offer and also deal with the influence leaders like G.D Birla, who was a Hindi nationalist, had on the Indian Chamber of Commerce. Hence the formation of a Muslim Chamber was not on the lines of communal lines but to counter the influence of big Hindu leaders and by creating a different Chamber, they could escape their influence. Muslim businessmen often faced challenges in getting financial support for their industrial projects. However, it was not due to discrimination by Hindu-controlled credit networks, but rather because most of the capital for the industry was raised through informal credit networks controlled by specialized communities like the Marwaris. Despite this, some Muslim business circles developed the perception that Hindus were preventing them from succeeding, which led to demands for special treatment and contributed to the development of Muslim separatism in India (Markovits 82).

Despite communal alignment in some areas, Bengal had more room for accommodation between Hindu and Muslim business interests due to the existence of an active urban Muslim commercial class based in Calcutta. However, the growing strength and self-assurance of Marwari businessmen posed a potential threat to Muslim political domination of the province. In Muslim-majority provinces, Hindu and Muslim businessmen had divergent views on center-province relations, with Muslim businessmen favouring greater provincial autonomy and their Hindu colleagues preferring a strong central government due to the influence Hindus would have with it (Markovits 86).Even with the economic problems that would have sprung up from the creation of a separate state, the idea of partitioning India to create a separate Muslim country, Pakistan, was supported by big business in India. They were willing to accept the separation of Muslim-majority provinces, as long as non-Muslim areas of Bengal and Punjab were incorporated into the Indian Union, in order to achieve a unitary India with a strong central government. Muslim businessmen in Sind and Punjab saw the creation of Pakistan as an opportunity to break free from the dominance of non-Muslim big business in Bombay. However, Muslim businessmen in Calcutta were less enthusiastic about the prospect of partition, as it would force them to relocate from the city where they had been operating for a long time. Nevertheless, they had no choice but to accept it, as the alternative of a united independent Bengal was even less appealing. Overall, partition seemed to offer new economic opportunities for many Muslim businessmen in India, which helped make it the most responsive solution to the needs and aspirations of a large section of big business, both Muslim and non-Muslim (Markovits 91).

About the Author

Aditya Kalyan is a third-year student at O.P Jindal Global University majoring in Literature and International Business.

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