A Century of Trust: The Story of Tata Steel
By Rudrangshu Mukerjee, Penguin, Rs 399

Tata Steel was set up in the face of formidable obstacles, economic and political. It is India’s first high-technology venture. And recently, it bought Corus. Tata Steel celebrated its centenary in 2007. As part of the celebrations, the company commissioned Rudrangshu Mukherjee, one of our finest historians, to write the story of its hundred years.

Mukherjee begins with Corus acquisition. It is a dramatic story, not least because of the disproportion between the acquirer and the prize: the capacity of Corus was roughly four times that of Tata Steel, and the average price it earned per ton was almost three times that of Tata Steel, if I remember right. There was keen competition for Corus between Tata Steel and CSN, the Brazilian iron ore producer. The competition ended with an auction conducted by the British government, which set midnight of 31 January, 2006, as the deadline. Mukherjee tells the story of this photo finish with aplomb.

The rest of the story is told in four chronological chapters, interspersed by two chapters on early labour problems and the development of Jamshedpur. It was difficult enough to produce steel out of dispersed raw materials in an undeveloped area of eastern India; the difficulties were compounded by an unhelpful government. This is the theme of the first chapter. From a distant and often hostile bystander, the government changed in the 1920s into a protector against foreign competition; that is dealt with in the second chapter. Steel is a technology-intensive and hazardous industry; forming a labour force for it out of tribals whose only experience of high technology was a plane in the sky is the subject of the third chapter, housing them and turning Jamshedpur into an ideal city of the fourth. The uneasy relations between independent India’s socialist government and the Tatas are described in the next chapter. Mukherjee returns to the Corus acquisition in the last chapter.

Mukherjee sees the story of Tata Steel as one of struggle against adverse circumstances — the dominant circumstance being the government. In narrating this struggle, he has deliberately left out much else — for instance, the story of the men who built up Tata Steel. If I remember right, the Tatas originally made their money in the opium trade; at any rate, their first venues were those in which the Parsis made their fortunes in the mid-19th century, Bombay and Hong Kong. Presumably, like other Parsis who made good, the Tatas originally came from the Surat-Navsari area, and migrated to Bombay. The long gap between the emergence of Jamshedji’s interest in steel and the building of the steel plant is well known. It is generally attributed to the unhelpful attitude of the government of British India. This attitude could be attributed to two factors. First, the Tatas would have replaced imports, the most important item of which was rails; the government, not being an ideologically oriented, rationally blind nationalist government, could not see why it should give up secure sources of rails in Britain and back an entrepreneur who had never produced steel. And second, the plant could not have been built in a most backward part of India without the government building a rail connection at its own cost. Mukherjee finds it sufficient to explain the reluctance of the government by calling it colonial. That sort of naïve, emotional explanation may suffice in Calcutta Marxist circles, but it is too simple as history.

The same goes for protection. Belief in protection for domestic industry is a leftist dogma; but in normal economics, protection has few protagonists. Just why TISCO deserved protection in the 1920s calls for an explanation. It would probably go beyond steel, for the government protected a number of industries besides steel, after getting a report from an Industrial Commission and various other rituals. It may lie in one or both of two factors. First, the government perhaps wanted to persuade Indian industrialists not to support the nationalist movement which was getting too strong for its taste. Alternatively, exchange rates went awry after World War I; the Rupee was overvalued, and put many industries in a spot.

Mukherjee locates the lack of bonhomie between the government of newly independent India and TISCO in the former’s socialism. This is not untrue, but misses out on two important themes. First, by the 1940s, the Tatas were railmakers above all else; selling rails to the various Indian railway companies was their bread and butter, and the government reserved that business for them by protecting them. After independence, the newly nationalized railways decided to make their own equipment, including rails. That led to a protracted and painful divorce between them and the Tatas. Second, the government began to build three steel plants — Bhilai, Rourkela and Durgapur — in the 1950s. It turned out to be extremely inept at industrial enterprise. As a result, the plants needed to be protected as much from the Tatas as from imports. The uneasy relationship between Steel Authority of India and TISCO is missed in this book.

Another instance of the missing context was the acquisition of Corus, which was made in the wake of Lakshmi Mittal’s acquisition of Arcelor; both make sense only in the context of the world steel markets, especially the markets for downstream products, and of the emerging shortage of iron ore, which Mukherjee has omitted. There was a time when the Tatas avoided the government like plague. They are known to have got land for the Nano factory with the help of the West Bengal government, and to have lobbied the government for the recently imposed export duty on iron ore. If true, that is a big change from JRD, who took one look at Indira Gandhi and never deigned to meet her again.

The Tatas, as our most admired and least tainted industrialists, have been much written about. So any author would face the question of what has already been covered and must be left out. But a new book can still be written by occupying a new vantage point: perhaps history is too limited a vantage point for writing a history of Tata Steel.

[The author of the book is the editor, editorial pages, The Telegraph]