September 13, 2014

Astonishing Tales of How the United States and India Are Intertwined

India Inside: Astonishing Tales of How the United States and India Are Intertwined

Posted: 09/11/2014 5:28 pm EDT Updated: 09/11/2014 5:59 pm EDT
As Washington prepares for a historic visit by India's new Prime Minister Narendra Modi on September 29, many are unaware of the histories of these two free econom...
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First of a three part series highlighting how the ties between the world two largest democracies are rooted in history. As Washington prepares for a historic visit by India's new Prime Minister Narendra Modi on September 29, many in America think that interaction between America and India, separated by nine to twelve time zones, must have been enabled by jet travel.
While the Boeing Company is the largest American exporter to India today, selling Dreamliners and defense aircraft, trade between the countries had maritime beginnings. In reality, the histories of these two free economies have been delicately intertwined for more than 500 years.

India: The Bird of Gold

According to British economist and historian Angus Maddison the richest economies of the late fifteenth century were China and India. But intrepid Europeans driven by gold, glory and god in that order were ready to build better and more reliable ships to find a reliable sea route to the "Indies." As every American schoolchild learns, Italian explorer Christopher Columbus, after being refused by the King of Portugal, received funding from Ferdinand of Spain to sail west and "discovered" the Americas on October 12, 1492.
And the next five centuries marked the rise of the Americas, particularly of the United States. India touched the American ascent at key points in U.S. history.
On July 8, 1497, Portuguese royal Vasco Da Gama led a fleet of four ships with a crew of 170 seasoned and experienced men in a different direction from Columbus, around the coast of Africa, but with the same goal. Da Gama's fleet arrived in Kappadu near Calicut, India on May 20, 1498 on India's western Malabar Coast.
Portugal, France and principally Great Britain slowly colonized, some would say plundered, India. By the mid-20th century, India produced just 2% of the world's GDP compared to about 20 percent when Columbus and da Gama went exploring. But I get ahead of myself. India was a major exporter of spices, textiles and tea. On December 31, 1600, the British East India Company, was formed and soon granted a royal monopoly by Queen Elizabeth I for all trade in and out of India. This made its top executives as wildly affluent as the Silicon Valley entrepreneurs of today and they also enjoyed political power and prestige. 

Yale, Yorktown, and the Star Spangled Banner
One such success was Boston- born Welshman Elihu Yale who had a 20 year run with this company and was second governor of Fort St. George (now Chennai), India. In 1718, the tiny Collegiate School of Connecticut in New Haven wrote to Yale asking for financial support. Yale shipped a carton of goods which the college sold to fund a new building. When the college asked for more money, Yale complied on the condition that they rename the school for him. And so was born Yale University. Today's Yale's power in American society and academia, and the size of its endowment, is exceeded only by Harvard; don't forget that it began with money first made in India.

By 1773, the 13 colonies were consumers of much of the trade with India that continued to enrich the British crown and top executives of the John Company (the nickname for the East India Company which was by then more powerful that today's GE, IBM Apple put together). American revolutionaries calling themselves the Sons of Liberty dumped 373 chests of East India Company tea from the SS Dartmouth into Boston Harbor on a frigid December day, marking the beginning of the American Revolution.
The bitter battles for American Independence lasted for nine long years until George Washington defeated British general Charles Cornwallis at the Battle of Yorktown on October 19, 1781. The 43 year old Cornwallis was down but not out, however. He returned from Virginia to England to cool his heels for a short time but then was appointed to the top post of the British East India Company and given the title of Governor General of Bengal. Cornwallis was remarkably successful in India. The Cornwallis Code became the cornerstone of revenue collection, land management, justice administration and police systems. Echoes of the Cornwallis Code still remain in the way that India's government functions today. I remind American executives of this legacy of the Battle of Yorktown, when their companies try to buy real estate in India today.

The Wadia family in India built the HMS Minden, a 74-gun teakwood boat on which attorney Francis Scott Key was held prisoner by the British in Chesapeake Bay on one rainy September night during the War of 1812. In America, everyone knows that as he watched the lone American flag fly atop Ft. McHenry, Key penned a poem which we call the Star Spangled Banner, our national anthem. Today the Wadia (boatman) family, descendants of Persian refugees to India, runs Bombay Dyeing, a textile company and GoAir, an airline.
The South Falls, Bombay Rises, Selling Ice to the Indians

During the American Civil War, exports of cotton from the Confederate States of America to Europe were blocked. Indian entrepreneurs had started growing the crop in the rich black soil of Western India, but the shortage in the Civil War caused a boom in cotton and in the textile mills that supported the crop prior to its export to England. During the Civil War, Bombay boomed and the expansion continued for decades afterward, making it India's largest city today and the one that contributes over 30 percent of personal income tax by all Indians.
Later in the nineteenth century, a remarkable American entrepreneur made millions selling ice from New England around the world. Frederick Tudor sent ships loaded with ice and insulated by sawdust all the way to the ports of Calcutta (now Kolkata) where the British East India Company had its Indian capital. They granted him an exception to their monopoly since ice from the Himalayan Mountains was far more expensive, and Tudor's emissaries built ice houses in Calcutta and Bombay. This improbable sounding story of American exports is beautifully documented in Gavin Weightman's 2004 book "The Frozen Water Trade."

We the People
A hundred years ago, on the West Coast of the United States, a ragtag group of Indian expatriates organized themselves into the Gadar Movement, whose goal it was to help India become independent of British rule. About the same time, Bhimrao Ramji Ambedkar came to study for a master's and doctorate at Columbia University in New York. Ambedkar was later a key architect of the independent India's constitution. The first three words of India's constitution are the same as those of the United States: "We the people."
It is important to remember this shared DNA as we in America look at trade, cultural and political opportunities with the world's second most populous country when Prime Minister Modi arrives in Washington this month.

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