When Gujarat's Kachchhi Traders Had the World in Their Palms

By recreating a whole world around a group of traders in western India, Chhaya Goswami’s Globalization before Its Time is business history as it should be.

The Arabian Sea has a special place in Indian business history. For centuries the cities and settlements on the Arabian Sea littoral traded with each other, exchanging Indian textiles for horse, armaments, pearls and ivory. In turn, some of the textiles were passed on to the Atlantic slave trade in Africa as a medium of exchange, or sent overland to European markets. Coastal merchants indigenous to the region bordering the sea engaged in this business and developed sophisticated systems of banking and shipbuilding to support the mercantile enterprise. The Hindu and Muslim traders of Kachchh were examples of such groups of people.

In the 17th century, the Arabian Sea trade flourished thanks to the control that three powerful empires – the Ottoman in Turkey, the Safavid in Iran and the Mughal in India – exercised on some of the key seaports, and regular transactions amongst them. This was also the time when the European merchant companies established themselves in the Indian Ocean trade, even though the Portuguese had arrived in this world somewhat earlier. In the second half of the eighteenth century, the Mughal empire had almost collapsed and its access to the Arabian Sea ports had long come to an end. Europeans were in the ascendance.

What happened to the indigenous traders and bankers during this period of transition? Two contending stories exist on this question. The first says that they lost ground to the Europeans while their patrons lost political power. The second says that the indigenous traders found partnerships and agency with the Europeans lucrative, and as their fortunes flourished, the Europeans gained in political power. Both stories overstate the Europeans’ commercial prowess and understate the Indians’ capacity to shape the course of history.

Chhaya Goswami Globalization before Its Time. The Gujarati Merchants from Kachchh Penguin, 2016.

Chhaya Goswami
Globalization before Its Time. The Gujarati Merchants from Kachchh
Penguin, 2016.

Chhaya Goswami’s book is a corrective to such biased histories. It shows that the Kachchhi traders did gain from European trade, and withstood well the decline of empires, but they could do so thanks to their own resources, which included well-developed institutions of commerce and banking, knowledge of the seas, shipping, and shipbuilding, past history of collaborating with political actors, and access to both maritime and overland trading routes.

The book is divided into four chapters, each one of substantial length. Chapter one explores the special characteristics of Kachchh that make it a “land of entrepreneurs”. Chapters two and three describe Kachchhi traders’ activities in Muscat and Zanzibar respectively, and chapter four deals with some of the prominent firms in the maritime trade, and how a few of them extended their operations beyond the southwest Asia region.

Why Kachchh? What is special about the region that it should produce so many merchant groups? The convenient location of the region on a navigable part of the eastern Arabian Sea, as well as the Mandvi port, of course, supplies a part of the answer.

Another part of the answer has to do with politics. The western coastal regions were ruled by small states that depended heavily on income from trade. This dependence was due to the poor agricultural conditions in the region. In turn, these states, though nominally vassals of the Mughals, could exercise a great deal of independence in policy. They used their freedom to create a model of rule where merchants and bankers had a prominent place, not only during warfare, the all-too-common palace intrigues or disasters, but also in normal times. Merchants and bankers helped the business of governance by collecting taxes, revenue farming, making loans, and taking part in administration, whereas the states helped them by offering lucrative contracts and implicitly recognising their laws and practices.


But the political and geographical environment explains little unless we also consider the social and institutional basis of entrepreneurship in the region. The merchant groups in question were ready to establish diaspora networks in port cities around the Arabian Sea. They conducted extensive and complicated financial operations including bill and insurance, and their bills were acceptable to the distant trading points thanks to the diaspora network.

The book shows in interesting detail how Vaishnavite temples and monasteries became effectively banks, clearing houses, and guarantors of reputation. Community law had great force. The merchants had considerable interest in shipbuilding, which in turn encouraged timber trade. In banking, trading, shipbuilding, and navigation, master-apprentice hierarchies were highly developed, showing how much skills were valued and how skills formed.

The book is well-researched and builds on the author’s deep knowledge of vernacular sources and the regional context. It is business history as business history should be, that is, it succeeds in recreating a whole world around a group of traders, and fills an important gap in Indian economic history scholarship.

One wishes, at the same time, that the author had tried to place the Kachchhi traders more firmly in debates on the 18th century economic transition in southern Asia, and attempted some comparative discussion of trading ‘firms’ in Kachchh and elsewhere in the world. Surely the Europeans operated in the same world, with a very different model of a firm. Did the difference matter to institutional and political change? But, perhaps wisely, Goswami’s book steers clear of dry historiography. Instead, it keeps in mind its readers – who will no doubt find the material presented fascinating and the quality of the narrative superb.

Tirthankar Roy is a professor at the London School of Economics and Political Science.