The Rise of the House of Tata

As England suffer in the heat at the Champions Trophy, recent events remind us that India is not just eclipsing the old country at her favoured imperial export, but is showing its muscle in the world of manufacturing as well.

The business world is rife with the rumour that Tata, the Indian multinational is to make a bid for Corus, the Anglo-Dutch concern responsible for what remains of the British steel industry.

Tata is one of the oldest business conglomerates in India, with revenues last year of £12 billion, the equivalent of about 2.8 per cent of the country’s GDP, and a market capitalisation of £25 billion. The Tata Group includes billion dollar divisions in software services, cars, hotels communications, chemicals, engineering and consumer products in a network of almost 100 operating companies.

Founded by Jamsetji Tata, known as the ‘father of Indian industry’, theirs was the country’s first Indian-owned textile mill, national airline and first integrated steel plant. They also had a big role in the development of cricket.

The Tatas were an important family within the small Parsi community that had fled Iran following religious persecution in the 6th century. Given sanctuary in India they were allowed to maintain their own customs and culture and as a result never became totally integrated. Under British rule they became useful social and economic middlemen adapting to Western occupations as they were not bound by tradition or caste laws. Furthermore, they were familiar with Indian customs and languages, and placed an emphasis on education.

During the 1840s a group of Parsis imitated British military officers playing cricket. Their enthusiasm was discouraged by an imperial order that insisted on racial segregation. Despite this, in 1848 The Oriental Cricket Club was formed. Two years later it was renamed The Zoroastrian Cricket Club, with funds from the Tata and Wadia families. They still had to wait until 1877, though, before a British team would grant them a contest.

Founded in 1887, the Tata group ranked alongside Birla as the largest business concern in India. Its association with cricket dates from the foundation of the Tata Sports Club in 1937. Following independence the Tata side dominated Bombay’s prestigious Times of India inter-office tournament, winning in nine of sixteen years. In the 1977-78 season they became the first company to boast of having two sides in the A Division.

Today Tata’s interest in cricket mirrors that of its wider commercial concerns. It employs leading players such as ex-captain Sourav Ganguly to promote products such as the ‘Sourav Fone’.

Corus is much larger than its possible suitor, ranked the world’s eighth largest producer of steel, with Tata Steel not producing enough to get into the global top 50. But this shows the ambition of a nation challenging China for dominance in the manufacturing sector.

There are obvious concerns that a takeover could result in heavy losses for the 41,000-strong European workforce, though it is doubtful that this will concern the Corus management, whose chief executive Philippe Varin stands to make up to £8.1m if the steelmaker is taken over. Varin, who has run the group for only three years, has 1.4 million shares and options in the company. Things might be changing, but when it comes to greed English capitalists can compete with the best.