From opium to outsourcing

India's Tata Group has big plans for China. It won't be the first time the company has set up shop there.

Published April 20, 2007 9:20PM (EDT)

Tata Consultancy Services, India's biggest software outsourcing company, is planning a big push in China, reports the Financial Times. "If any country has the potential to scale up like India, it's China," N. Chandrasekaran, TCS global head of sales and operations, told the F.T.

When a U.S. company sets up shop in China, it is often accused, sometimes correctly, of sacrificing the interests of American workers for the benefit of its bottom line. But what do we say when an Indian company opens for business in Shanghai, with plans to hire Chinese software engineers to handle operations for Fortune 500 multinationals? The exploitation dynamic isn't quite as crystal-clear. TCS isn't moving to China because programmers are cheaper there, but because that is where the action is.

The Tata conglomerate, of which TCS is just one of at least a hundred subsidiaries (albeit, with 90,000 employees, one of the larger and more profitable subdivisions), has been making big international news for the last couple of years. Tata Steel's purchase in October 2006 of the Anglo-Dutch steel company Corus was perceived by some in the U.K. as a kind of reverse-colonialist gesture; the subaltern swallowing up the remnants of Empire. But I did not realize until today just how embedded the story of Tata is with the entire narrative of Indian industrial development.

The House of Tata was founded in the 19th century by Jamsetji Nusserwanji Tata, the scion of a family of Zoroastrian priests who had fled persecution in Persia. Called the "father of Indian industry," J.N. Tata is said to have been deeply impressed by Thomas Carlyle's declaration that "the nation which gains control of iron soon acquires the control of gold." So, after making his first fortune running a textile mill, he made plans for the creation of India's first steel mill, first hydroelectric plant, and first university devoted to science instruction, Bangalore's Indian Institute of Science, all of which were completed after his death.

Given the importance of a technological education in India's current niche in the global economy (perhaps Carlyle's aphorism should be updated: "the nation that gains control of high tech..."), Tata's determination to create such a university echoes down the centuries. On New Year's Day this year, the president of India, Dr. APJ Abdul Kalam, quoted from a letter written in 1898 by Tata to Swami Vivekananda (the man responsible for introducing yoga to the U.S. and England), asking him to be the director of his proposed college.

Dear Swami Vivekananda,

I trust, you remember me as a fellow-traveler on your voyage from Japan to Chicago. I very much recall at this moment your views on the growth of the ascetic spirit in India, and the duty, not of destroying, but of diverting it into useful channels. I recall these ideas in connection with my scheme of Research Institute of Science for India, of which you have doubtless heard or read. It seems to me that no better use can be made of the ascetic spirit than the establishment of monasteries or residential halls for men dominated by this spirit, where they should live with ordinary decency, and devote their lives to the cultivation of sciences -- natural and humanistic. I am of opinion that, if such a crusade in favour of an asceticism of this kind were undertaken by a competent leader, it would greatly help asceticism, science, and the good name of our common country; and I know not who would make a more fitting general of such a campaign than Vivekananda. Do you think you would care to apply yourself to the mission of galvanizing into life our traditions in this respect? Perhaps you had better begin with a fiery pamphlet rousing our people in this matter. I should cheerfully defray all the expenses of publication.

All very inspiring. And indeed, if you spend any amount of time delving through the voluminous online archives of the Tata Group, you cannot help coming to the conclusion that J.N. Tata was a strange brew of Andrew Carnegie and Bill Gates, with a dash of Jesus Christ and Franklin Roosevelt thrown in for good measure.

If only it were so simple. For a dissenting view of the legacy of the Tata family and the good name of the Tata conglomerate, one can turn to the manifestly uncorporate-friendly International Campaign for Justice in Bhopal, which details an egregious list of abuses. One detail that had been conspicuously absent from the glowing biographies I had been clicking through caught my eye: The family's money, it was alleged, originally came not just from the cotton trade, but also from shipping opium to China in cahoots with the British East India Co.

This accusation was picked up by the Independent in the U.K. around the time of the purchase of Corus, and you can find allusions to it in various nooks and crannies on the Web. But none of the critics offered much in the way of reliable sourcing, and I felt a bit diffident about passing on such a charge without a little more certainty.

Ask of the Web, and the Web shall provide. It turns out that Hong Kong's governing body, the Legislative Council, has uploaded to the Web official records dating back to 1884. Included there are the minutes to a Legislative Council meeting held on Friday, March 25, 1887.

During the meeting a group of Hong Kong-based merchants, among whom were included Shellim Ezekiel Shellim, "of the firm of David Sassoon, Sons & Co," and Ruttonjee Dadabhoy Tata, "of the firm Tata & Co.," presented a petition "for and on behalf of the Opium Importers and wholesale Opium Merchants of the said Colony."

They had come to complain about a Bill before the council, titled "An Ordinance for the Regulation of the trade in Opium," which they believed "would prejudicially affect their trade."

That while fully recognizing the necessity of carrying out the object aimed at by the said Bill, namely, the prevention of Opium smuggling into China, and while sympathizing with its spirit, your petitioners submit that the means by which it is proposed to effectuate such object would inflict serious injury upon the Opium trade, and especially on the aforesaid Opium Importers and wholesale and retail Opium dealers, and prove a blow to the general commerce and prosperity of this Colony.

Ruttonjee Dadabhoy Tata was J.N. Tata's first cousin, and the father of J.R.D. Tata, who helmed the family business well into the 20th century, before giving way in 1991 to Ratan Tata, his nephew, the current CEO. As primary source documentation of (legal) drug dealing activity goes, the LegCo minutes strike me as fairly definitive.

In the annals of globalization, there are few contemporary crimes committed by either transnational corporations or modern governments that match the scale of the 19th century enterprise in which the British Empire fought two wars against China to ensure its right to profit off Chinese citizens addicted to Indian-grown opium. Indeed, the first Opium War was kicked off when Lin Zexu burned 20,000 chests of opium, a hefty proportion of which belonged to Sassoon & Co., one of the above-named petitioners. It gives one pause to think that members of the same family peripherally involved in that enduring stain upon history, whose echoes inform Chinese resentment of the West to this day, are now involved with overseeing the expansion of software outsourcing operations in the former extraterritorial concessions of the West.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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