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Business beyond Empire: German Multinationalsin Pre- and Post-Independence India (1890s–1960s)

Christina Lubinski

To cite this article: Christina Lubinski (2018) Business beyond Empire: German Multinationals inPre- and Post-Independence India (1890s–1960s), South Asia: Journal of South Asian Studies,41:3, 621-641, DOI: 10.1080/00856401.2018.1477438

To link to this article: https://doi.org/10.1080/00856401.2018.1477438

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Business beyond Empire: German Multinationals in Pre- andPost-Independence India (1890s–1960s)

Christina Lubinski

Centre for Business History, Department of Management, Politics and Philosophy, Copenhagen BusinessSchool, Frederiksberg, Denmark

ABSTRACTThe activities of multinationals in India have so far been describedas a British–Indian story. However, the British Empire was never animpenetrable economic area, but, rather, a contact zone for firms ofmany different origins. This article diversifies the historiography ofIndian business history by tracing the commercial interactionsbetween Germany and India from the 1890s to the 1960s as oneexample of non-British multinationals. It shows continuities inactors, debates and strategies and across major political turningpoints. In particular, it highlights the alignment of aspirationsbetween Germans and nationalistic Indians as a coalition againstBritish dominance.

KEYWORDSCold War; Germany;imperialism; legitimisation;multinationals; nationalism;political economy; Swadeshi

Introduction

In his 1978 book on Indo–German economic relations after World War II, J.K. Tandonargues that the links between India and Germany ‘are more than spurious outcroppingsof post-war political pragmatism. They are, rather, sturdy plants with roots that havegrown through the centuries… . The two nations have shared experiences and aspira-tions’.1 Tandon elaborates on his argument about the development of these ‘sturdy plants’with a detailed analysis of collaboration in the post-war period. His, however, as well asother Indian and German historical studies, has surprisingly little to say about the ‘roots’of this Indo–German relationship and their development throughout the twentiethcentury.

This is at least partly attributable to the fact that Indian history, particularly when itcomes to economic topics, tends to focus on the British–Indian relationship, neglectingIndia’s exchanges and interactions with other countries.2 German business history toohas placed much more emphasis on the ups and downs in the business relationships withthe country’s Western partners than on the relationship with India.3

CONTACT Christina Lubinski cl.mpp@cbs.dk

1. J.K. Tandon, Indo-German Economic Relations (New Delhi: National, 1978), p. 8.2. For this argument, see also Dwijendra Tripathi, ‘Business, Networks, and the State in India: Introduction’, in Business

History Review, Vol. 88, no. 1 (2014), pp. 3–8.3. The German Journal of Business History/Zeitschrift f€ur Unternehmensgeschichte has yet to publish an article explicitly

dealing with India or Indo–German relations.

© 2018 South Asian Studies Association of Australia

https://doi.org/10.1080/00856401.2018.1477438

SOUTH ASIA: JOURNAL OF SOUTH ASIAN STUDIES, 2018 VOL. 41, NO. 3, 621–641

ARTICLE

This article explores the history of German multinationals and business with Indiafrom the 1890s, when German firms first started systematic business with India, to 1961,when India’s Second Five-Year Plan ended. It offers an alternative history of both Ger-many and India, which not only enhances our historical understanding of their commer-cial relationship, but also emphasises so far under-researched debates and tensions. Ananalysis of India’s commercial relations in the pre- and post-Independence period mayfurther extend our understanding of the development of Indian business history andIndia’s role in the global economy, preparing the ground for new research questions.

Indian business history is a fascinating and expanding field of research. It is particularlystrong in exploring the links between India and the British Empire in the context of colo-nialism and the immediate post-Independence period. However, recently, several authorshave made the claim that throughout the twentieth century, India was by and large a free(or almost free) trade zone, offering business opportunities to multinationals of many dif-ferent origins. The previous focus on intra-empire relations is being complemented by anew analysis of India in the global economy from many different perspectives. DavidArnold, for example, finds that competitive pressures between different Western multina-tionals significantly impacted the Indian market for typewriters, bicycles, gramophonesand other ‘everyday technologies’.4 Christof Dejung details the business endeavours of aSwiss trading company in India, helping us to understand the perspective and activities ofa country often perceived as politically neutral.5 Aparajith Ramnath sheds light on themany different foreign (North American and German) engineers in Indian businesses,showing early interactions that have largely been forgotten.6 Ross Bassett discusses thevarious technology transfers between the United States and India, drawing on the experi-ence of Indian Massachusetts Institute of Technology (MIT) graduates between 1861 and2000.7 Finally, Shigeru Atika highlights the close relationship between Japan and India,arguing for an understanding of the international order of Asia in its own right.8 They allare offering an alternative view of the Indian market and the development of Indian busi-ness in the twentieth century.

In the same context, scholars have also started to explore the lasting presence of Ger-man businesspeople, technical experts and educational instructors in India ever since thelate nineteenth century. Their activities fit into the larger framework of Indo–Germanintellectual exchanges, which Kris Manjapra describes expertly in his monograph, Age ofEntanglement.9 He argues that Germans and Indians had one thing in common: they‘sought to destroy the nineteenth-century world order organised by British power’.10 Asan historian of ideas, Manjapra stresses in particular the multiple interactions between

4. David Arnold, Everyday Technology: Machines and the Making of India’s Modernity (Chicago, IL: University of ChicagoPress, 2013).

5. Christof Dejung, Commodity Trading, Globalization and the Colonial World: Spinning the Web of the Global Market (NewYork: Routledge, 2018).

6. Aparajith Ramnath, The Birth of an Indian Profession: Engineers, Industry, and the State, 1900–47 (New Delhi: OxfordUniversity Press, 2017).

7. Ross Knox Bassett, The Technological Indian (Cambridge, MA: Harvard University Press, 2016).8. Shigeru Akita and Nicholas White (eds), The International Order of Asia in the 1930s and 1950s (Farnham: Ashgate,

2010).9. Kris Manjapra, Age of Entanglement: German and Indian Intellectuals across Empire (Cambridge: Harvard University

Press, 2014).10. Ibid., p. 1.

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Indian and German intellectuals, artists and academics. This article complements his per-spective by focusing on the role of businesspeople and commercial partnerships.

While the business relations between India and Germany deserve more scholarly atten-tion, there are already some accounts of individual industries available, for example anarticle by the author on the German dye industry in India before 1947.11 For the post-Independence period, Amit Das Gupta and Corinna Unger offer well-researched accountsof German–Indian political and economic relationships.12

While many new insights have been discovered, so far, the available literature, includ-ing the author’s own contributions, falls neatly into two categories, focusing either on thepre-Independence or post-Independence periods. The lack of understanding of the conti-nuities between the two periods is a major limitation, obscuring long-term strategies andlearning effects as well as the continuities in mental frameworks and actors. This article,therefore, deliberately sacrifices some detail on individual companies and time periods toexplore continuities and discontinuities over the seventy years from the 1890s to the1960s, bridging the major political turning points of World War I (1914–18), the GreatDepression of the 1930s, World War II (1939–45) and Indian Independence in 1947.Such an approach will allow us to better understand these turning points of political andeconomic history and their significance, without misinterpreting any of them as a ‘pointzero’ at which previous relationships, strategies and ideals were resolved or disappeared.

Empirically, the paper is based on the corporate archives of the three largest Germanemployers in India—Siemens, Krupp and Bayer (later I.G. Farben)—as well as comple-mentary sources from the German Foreign Office Archives, the German NationalArchives, the United States National Archives and the West Bengal State Archives. It isstructured chronologically and explores the strategies of these companies in the Indianmarket and their collaboration with German and Indian stakeholders.

One of the major findings is that the German strategy in India remained fairly stable andcentred on what I call an ‘outsiderness advantage’. German businesspeople, supported byGerman public officials, played up their status as outsiders to colonialism, helping themcrack open a market in which they should have been in an inferior competitive position vis-�a-vis the British. Although Germany had its own history of colonialism,13 it had ended ear-lier than other colonial ventures and never involved India, allowing the German businessexecutives to present themselves as economic partners carrying less ‘political baggage’. Theoutsiderness advantage was rooted in a complementarity of resource availabilities and needsbetween Germany and India, as well as an alignment of political aspirations,14 whichremained remarkably consistent—despite notable variations over time, which I explore inthis article.

11. Christina Lubinski, ‘Global Trade and Indian Politics: The German Dye Business in India before 1947’, in Business HistoryReview, Vol. 89, no. 3 (2015), pp. 503–30.

12. Amit Das Gupta, Handel, Hilfe, Hallstein-Doktrin: Die Bundesdeutsche Suedasienpolitik Unter Adenauer und Erhard 1949bis 1966 (Husum: Matthiesen, 2004); Corinna Unger, ‘Export und Entwicklung: Westliche Wirtschaftsinteressen in Indianim Kontext der Dekolonisation und des Kaltem Krieges’, in Jahrbuch f€ur Wirtschaftsgeschichte/Economic History Year-book, Vol. 53, no. 1 (2012), pp. 69–86. doi: https://doi.org/10.1524/jbwg.2012.0004; Corinna R. Unger, ‘Rourkela, Ein“Stahlwerk Im Dschungel”: Industrialisierung, Modernisierung Und Entwicklungshilfe Im Kontext Von DekolonisationUnd Kaltem Krieg (1950–1970)’, in Archiv fur Sozialgeschichte, Vol. 48 (2008), pp. 367–88; and Amit Das Gupta, ‘WestGermany’s India Policy 1947–1972’, in Joanne Miyang Cho, Eric Kurland and Douglas T. McGetchin (eds), Encountersbetween Germany and Asia in the Twentieth Century (New York/London: Routledge, 2014), pp. 189–202.

13. Sebastian Conrad, Globalisation and the Nation in Imperial Germany (Cambridge: Cambridge University Press, 2010).14. See also for a focus on intellectual exchanges, Manjapra, Age of Entanglement.

SOUTH ASIA: JOURNAL OF SOUTH ASIAN STUDIES 623

Unearthing a series of new sources from German archives allows for an innovativecomplementary perspective on Indian business history, which so far has been largelybased on Indian and British sources. However, it also has its own limitations. The experi-ences of Indian employees in German companies are less well captured than the experien-ces and reflections of Germans residing abroad. Parallel experiences by executives fromother non-British countries, such as the United States, Switzerland, France, Japan andothers, are certainly of great interest, but are beyond the scope of this article. Coveringsuch a long research period from the 1890s to the 1960s comes at the cost of sacrificingsome level of detail for selected events, such as the Great Depression or both world wars,which are described in more detail elsewhere.15 The article foregrounds the continuity ofIndo–German commercial relations centred on a fairly consistent strategy, shaped bypolitical aspirations and resource needs on both sides.

Political opportunism: German business in India until World War I

Germany and India had had trading relations at least as far back as the eighteenth century,but little is known about the details of these early links.16 By 1867, the German electricalcompany Siemens had laid the first telegraph cable between London and Calcutta (nowKolkata).17 Other German multinationals, in particular from the chemical and mechanicalindustries, also began conducting occasional export business with India during the secondhalf of the nineteenth century. Three pioneers of German companies in India and laterthe three biggest employers in India in the interwar period were Krupp, Bayer/I.G.Farben and Siemens.

In the last third of the nineteenth century, steel manufacturer Krupp expanded itsexport activities into India using an agent. Between 1865 and 1867, Krupp delivered atotal of 3,702 locomotive tyres to Indian customers, and by 1914, it had built an entirecement plant for the Indian Cement Co. Ltd in Porbandar.18 By 1889, the chemicals com-pany Bayer, a manufacturer of dyes, had sales offices and dyestuff depots in Surat, Ahme-dabad, Karachi, Delhi, Cawnpore (now Kanpur) and Amritsar (see Figure 1). By the1890s, it had established an agency for sales in India, which was renamed Bayer & Co. Ltdin 1896 and registered under the Indian Companies Act. It was Bayer’s first wholly-owned subsidiary in Asia.19 Siemens organised most of its early business with India via itsBritish subsidiary.20 In 1903, Siemens (Berlin) established a co-operative association withthe import–export firm, Schroeder, Smidt & Co., based in Calcutta, which sold Siemensproducts in India.21

15. For the Great Depression, see Dietmar Rothermund, India in the Great Depression, 1929–1939 (New Delhi: ManoharPublications, 1992). For German–Indian collaboration during World War I, see Nirode Kumar Barooah, India and theOfficial Germany, 1886–1914 (Frankfurt am Main: Peter Lang, 1977); for World War II, see Milan Hauner, India in AxisStrategy: Germany, Japan, and Indian Nationalists in the Second World War (Stuttgart: Klett-Cotta, 1981).

16. Walter Leifer, India and the Germans: 500 Years of Indo–German Contacts (Bombay: Shakuntala Publishing House,1971).

17. Elisabeth B€uhlmann, La Ligne Siemens: La Construction du T�el�egraphe Indo-Europ�een, 1867–1870 (Bern: Peter Lang,1999).

18. ‘Delivery of Locomotive Tyres’, 1865–67, WA 7 f 20, Historical Archives Krupp (hereafter HA Krupp), Essen, Germany.19. 5 E.a. 16 April 1902; 202/16, Mar. 1918, Bayer Corporate Archives, Leverkusen, Germany (hereafter BA); and ‘History:

Highlights of Bayer in India’ [https://www.bayer.in/about/history, accessed 30 April 2018].20. ‘Historical Development of the Overseas Business’, 8188 Siemens Corporate Archives (hereafter SAA), Berlin, Germany.21. ‘Contract with Schroeder, Smidt & Co.’, 13092, 15 July 1903, SAA.

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With a population of 294 million in 1901,22 the Germans considered India a country oftremendous potential. As a British colony with Anglo-Saxon property law, it was per-ceived as a fairly safe trading partner for Western multinationals. Both German andAmerican observers saw it as a ‘free trade country’, relatively unobstructed by protection-ist barriers.23 A German trade report of 1912 noted: ‘There are custom duties but they areso low that they cannot have any protective impact’.24 While Canada, Australia and NewZealand gave special preference to imports from Britain, India’s tariffs did not exhibitsuch discriminatory effects. The strongest formal barrier was that the Government ofIndia and various local governments were formally obliged to conduct government pur-chases either in Britain or in India. However, competitors from various origins frequentlycircumvented such regulations by having their goods requested by heads of governmentdepartments in India and then purchased either in England or in India, where dealersheld them in stock.25

Figure 1. Bayer Dyeing Studio, Cawnpore (now Kanpur), India, 1902, Object 4031. Source: Courtesy ofBayer Corporate Archives, Leverkusen, Germany.

22. See Great Britain India Office, Statistical Abstract Relating to British India from 1897/8 to 1906/07, Compiled from OfficialRecords and Papers Presented to Parliament (London: His Majesty’s Stationery Office, 1908), p. 2.

23. ‘Handels- und Schiffahrtsbericht 1912’, R/901/13404, German Federal Archives (hereafter BArch), Berlin, Germany; andDepartment of Commerce and Henry D. Baker, ‘Special Consular Report No. 72: British India with Notes on Ceylon,Afghanistan and Tibet’ (Washington, DC: Government Printing Office, 1915).

24. ‘Handels- und Schiffahrtsbericht 1912’, R/901/13404, BArch.25. Department of Commerce and Baker, ‘Special Consular Report No. 72’, p. 13.

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German trade with India remained small in the years leading up to World War I and isnot easily assessed via trade statistics, which only recorded the last port of shipment, butnot the country of origin of many products. Nevertheless the increasing growth rate ofnon-British imports made British competitors anxious. The 1897 report by the ColonialOffice on foreign competition in the Empire showed Germany, followed by the UnitedStates and Japan, as Britain’s keenest competitors.26 In its 1913–14 review of trade, theIndian government’s Department of Statistics commented: ‘Costly British goods [are]being largely displaced in India by German cheap manufactures. German manufactureshave secured special advantage by the application of technical skill, chemical science, or acombination of both’.27

Shifts in the political economy, moreover, made German executives hopeful about theirprospects. Indian independence activists were repeatedly calling for a boycott of ‘foreignproducts’ in order to reduce India’s dependence on imports, but they pursued a ratherpragmatic approach to the issue. With the quest for independence being directed at Britain,exports from other Western countries were not just tolerated, but were regularly encour-aged. ‘Why should we take revenge upon America or Germany for the oppression causedto us by the people of Britain?’, asked nationalist and philosopher Aurobindo Ghosh (1872–1950) rhetorically in a speech in 1908.28 Indeed, in those areas of the country where nation-alist feelings were rampant, goods of non-British origin were at times given a clear prefer-ence. Charles Stevenson-Moore, inspector-general of police in Bengal, reported duringprotests against the partition of Bengal in 1905: ‘A distinction is being made betweenEnglish and Continental goods, adverse to the former’.29 Germany in particular couldexploit this ‘advantage of outsiderness’ because it was perceived as one of Britain’s fiercestrivals in Europe. Stevenson-Moore even described a case of fraud in which English goodswere being successfully sold as ‘Made in Germany’.30 However, these early experiences withIndian nationalism remained limited to selected parts of the country, first and foremostBengal, and were considered ephemeral by many German observers.

World War I temporarily ended the commercial relations between India and Germany.German assets in India (and in other countries) were expropriated and many Germannationals held in internment camps.31 American authorities, acting as a neutral power on

26. Government of Great Britain, ‘Trade of the British Empire and Foreign Competition. Despatch from Mr. Chamberlain tothe Governors of Colonies and the High Commissioner of Cyprus and the Replies Thereto. Presented to Both Houses ofParliament by Command of Her Majesty’ (London: Eyre & Spottiswoode, 1897), pp. 8, 576. On German–British rivalry,see also Ross J.S. Hoffman, Great Britain and the German Trade Rivalry, 1875–1914 (New York: Russell & Russell, 1964),pp. 197–201.

27. Quoted in the report by the American consul in Bombay, Henry Baker, ‘German and Austro-Hungarian Trade withIndia’, 27 Aug. 1914, Record Group 84, Records of the Foreign Service Posts of the Department of State, United StatesConsular Records for Bombay, India, Correspondence 340–621, 1914, Vol. 96, National Archives and Record Administra-tion (hereafter NARA), College Park, MD, USA.

28. Sri Aurobindo, ‘The Aims of the Nationalist Party [Speech Delivered in Nagpur 30 Jan. 1908]’, in Sri Aurobindo AshramTrust (ed.), The Complete Works of Sri Aurobindo, Vol. 6 and 7: Bande Mataram Political Writings and Speeches 1890–1908 (Pondicherry: Sri Aurobindo Ashram Press, 2002), pp. 847–54, p. 852.

29. Inspector-general of police C.J. Stevenson-Moore, ‘Report on the Agitation Against the Partition of Bengal’, POL. (Pol.)F. No. (J)/1905, West Bengal State Archives (hereafter WBSA), Kolkata, India.

30. Ibid.31. On expropriations, see Government of India Legislative Department, ‘Legislation and Orders Relating to the War’

(Delhi: Superintendent of Government Printing, India, 3rd ed., 1915). On internment, see Christina Lubinski, Valeria Gia-comin and Klara Schnitzer, ‘Internment as a Business Challenge: Political Risk Management and German Multinationalsin Colonial India (1914–1947)’, in Business History (April 2018), doi/full/10.1080/00076791.2018.1448383 [accessed 20April 2018].

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behalf of the Germans, reported in November 1915 that 203 Germans and 46 Austrianswere behind barbed wire in India, and that several hundred were under the supervision ofthe civil authorities but not interned.32

Internment was one of the turning points for German nationals’ status and self-perception in India. Prior to the war, many Germans had considered themselves membersof the ‘white Western elite’ in the country. With their arrest in World War I, they felt thata new line of distinction—based on nationality, rather than race—had been drawn. N.O.Tera, who had come to India as an employee of a German rubber company, later com-mented on the period: ‘the British destroyed the “Schicksalsgemeinschaft” (community offate) of the Europeans vis-�a-vis the coloured races of the world. Here is when for the firsttime the British demolished the fiction of the superiority of the white race’.33 In pre-war India, nationality had taken a back seat to racial distinction in the communityof Western businesspeople; both German and British businessmen frequented Euro-pean clubs, which one historian rightly characterises as vehicles for a ‘political mobi-lization of whiteness’.34 The clubs created a space for Westerners to mingle and atthe same time consolidate their social community. With the outbreak of hostilities,Germans and Austrians were expelled from these clubs and the doors remainedclosed to them even after the war.35 As the community of Westerners becameincreasingly fragmented, opportunities for new alliances emerged. Indian observersstarted to develop an understanding of the (new) discrimination against Germans as‘enemy aliens’, which seemingly trumped racial belonging in India—at least for thetime being. From the perspective of the Germans, the internment experience washumiliating and shattered belief in the unity of the Western community.

Between home and host country pressure: The interwar co-operation (1919–47)

When World War I ended, German multinationals were eager to rebuild their inter-national businesses as swiftly as possible. However, war-related restrictions remainedin place for several years. Up until August 1925, Germans were forbidden from trav-elling to or staying in India. This slowed the reconstruction of trade relations andwas moreover understood by the Germans as an insult to them: ‘It is still today pos-sible that the Chinese coolie will be permitted to enter India without further ado butnot the German merchant’, exclaimed a 1925 article in the trade journal, Industrie-und Handelszeitung.36 In response, German firms engaged in ‘cloaking’ activities,hiding the true ownership of their commercial ventures by collaborating with non-German nationals.37 Heavy lobbying by German and British entrepreneurs in the

32. American consulate to secretary of state, ‘Detention and Internment of German and Austrian Subjects’, 19 Nov. 1915,Record Group 59, Records of the Department of State Relating to World War I and its Termination, 1914–1929, M367,NARA.

33. N.O. Tera, ‘Southeast Asia Internees’, 330–596, attachment to letter from Kuehns to Waibel, 6 Dec. 1939, BA.34. Mrinalini Sinha, ‘Britishness, Clubbability, and the Colonial Public Sphere: The Genealogy of an Imperial Institution in

Colonial India’, in Journal of British Studies, Vol. 40, no. 4 (2001), p. 505.35. ‘Letter Consulate Calcutta to Foreign Office Berlin’, 29 July 1930, R3101-02664, BArch.36. Paul Felzer, ‘Ein verlorener Markt’, in Industrie- und Handelszeitung, Vol. 6, no. 44 (21 Feb. 1925), pp. 1–2.37. ‘Letter Bayer to I.G. Farben Firms’, 420, 27 Oct. 1921, BA; and ‘Siemens Abroad 1913–40, Memorandum of Association’,

8156, 8 Nov. 1922, SAA.

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early 1920s eventually led to an Anglo–German trade agreement, ratified in 1925,which abolished the travel restrictions.38

As soon as it became possible, German multinationals revitalised their India businesses,with the big three—Siemens, Bayer/I.G. Farben and Krupp—re-establishing their organi-sations. Siemens founded Siemens (India) Ltd, opened offices in Rangoon (1925) andLahore (1926), and drew up contracts with agents in the United Provinces (present-dayUttar Pradesh and Uttarakhand), Delhi, Madras (now Chennai) and Ceylon (now SriLanka) to sell its products.39 Bayer merged with several other German chemical compa-nies to form the massive chemical conglomerate, I.G. Farben, in December 1925.40 Thenew I.G. signed a sole-importer contract with the Dutch company Havero, which was tosell all I.G. products in India.41 Krupp started its own company in Bombay (now Mumbai)in May 1929 under the name Kitco (Krupp Indian Trading Co.).42

Several indicators suggested that the ‘outsiderness strategy’ applied before World War Istill had its advantages in India. First, while the travel ban was still in place, several Indianbusiness representatives took the initiative and travelled to Germany, leaving the impres-sion that Indian nationalists were open to, if not eager for, co-operation.43 Second, thoseindustries in India most influenced by nationalism sought out German manufacturers todeliver the products they needed. Cotton goods in particular were often the target ofnationalist-inspired boycotts;44 consequently, spinning mills were inclined to source theirmachinery from non-British companies because their greater development in the 1930swas directly related to the nationalist movement and the call for locally-produced cloth-ing.45 I.G. expanded its dye business, regularly delivering to cotton mills. Operating underthe cloak of a Dutch trading company, India became its fourth largest foreign market inthe early 1930s. At the same time, the British market share declined from 33 percent to7.4 percent, a loss attributed to anti-British sentiment and boycotts in the country.46

Thirdly, the Germans started to look for and engage in strategic alliances with Indianpartners. Since 1931, Krupp and Tata had been in close touch, and representatives of Tatavisited Krupp in Germany in August 1931 and again in July 1935.47 Siemens appointedLala Harkishen Lal, a vocal nationalist and financier of several Swadeshi businesses, to theboard of directors of Siemens (India).48 The Germans considered Lal’s ability to network

38. ‘Treaty of Commerce and Navigation between the United Kingdom and Germany 2 Dec. 1924’, ratified 8 Sept. 1925 inGreat Britain, Foreign Office, Handbook of Commercial Treaties, etc., with Foreign Powers (London: His Majesty’s Statio-nery Office, 4th ed., 1931), p. 299; for the lobbying leading up to it, see Frank McDonough, Neville Chamberlain,Appeasement, and the British Road to War (Manchester: Manchester University Press, 1998), p. 135.

39. ‘Siemens Abroad 1913–1940, Siemens (India) Ltd.’, 8156, SAA.40. Alfred D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: The Belknap Press of Harvard

University Press, 1990), p. 475; and Gottfried Plumpe, Die I.G. Farbenindustrie AG: Wirtschaft, Technik Und Politik 1904–1945 (Berlin: Duncker & Humblot, 1990).

41. ‘Sole Importer Contract I.G. and Havero’, 19 A 590-2; and ‘Indien-Britisch/Secret Agreement with Havero’, 9 K 1 2, BA.42. ‘Founding Kitco’, W 4 2841, HA Krupp.43. ‘Sales Representatives of Bayer AG/Visit of Das Gupta’, 1921, 9 K 1, BA.44. A.D.D. Gordon, Businessmen and Politics: Rising Nationalism and a Modernising Economy in Bombay, 1918–1933 (New

Delhi: Manohar, 1978), pp. 210–8; and Claude Markovits, Indian Business and Nationalist Politics, 1931–1939: The Indige-nous Capitalist Class and the Rise of the Congress Party (Cambridge: Cambridge University Press, 1985), pp. 72–6.

45. Siemens in particular profited from this development and delivered to cotton mills: see ‘Siemens India’, 31 Mar. 1932,4286, SAA.

46. Lubinski, ‘Global Trade and Indian Politics’, pp. 18–20; and W.J. Reader, Imperial Chemical Industries: A History, Vol. 1(London: Oxford University Press, 1970), p. 439.

47. ‘Files on East India’, 1933–1937, FAH 23-FAH 4 C 170, HA Krupp.48. ‘Siemens Abroad 1913–1940/Sixth Meeting of Board of Directors’, 24 Dec. 1924, 8156, SAA; and Khalid Latif Gauba, The

Rebel Minister: The Story of the Rise and Fall of Lala Harkishen Lal (Lahore: Premier Publishing House, 1938).

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with Indian banks and insurance companies very valuable, making him an important localintermediary. He was also described as ‘a spearhead of the fight for India’s own indus-try’.49 Appointing him as a director was important for Siemens’ standing with the nation-alists and for the social capital it garnered; however, looking back on Lal’s term as adirector, one Siemens manager reported disappointedly that Lal seldom attended boardmeetings.50 While Siemens managers lamented Lal’s lack of attendance, they appreciatedhis local contacts and the legitimacy that the Swadeshi activists’ engagement with Siemensgave the German company.

While qualms and racial prejudices remained, the Germans and Indians built on thecomplementarity of their needs. The German multinationals sought markets abroad,while the Indian nationalists had an interest in developing local industry. Although cer-tain industrial imports from the West were unavoidable, the nationalists were simulta-neously working towards economic and political independence from Britain. The field ofeducation provided a similar complementarity: Indian nationalists were concerned withtechnical and business education, which were considered crucial for India’s developmentgoals. German firms started sponsoring a number of Indians, mostly students, to under-take industrial training with them in Germany, hoping they would become acquaintedwith German business practices and potentially serve the German companies as localemployees. The exact number of trainees is unknown, but in a 1929 publication by theIndian Information Bureau, an organisation of diaspora Indians in Berlin, the fact thatIndian students were easily admitted to German factories was highlighted as a major dif-ference to Britain, where admissions were rare and extremely costly.51

Yet, despite the economic and educational co-operation, little distinguished Germancompanies from their British counterparts when it came to working conditions for Indianemployees. Racial prejudice remained ubiquitous; when an article published in theGerman journal, Export and Import Review, criticised the British and French governmentsfor having employed coloured soldiers during World War I, calling it a ‘betrayal of thewhite man’s cause’, Virendranath Chattopadhyaya, an Indian nationalist, protested. Atthe time located in Berlin, he responded that this ‘outburst…will not fail to influence their(coloured people’s) attitude towards German businessmen’.52 He continued:

We shall not here waste time in refuting the absurd notion that colour is a basis for dividingthe world commercially. But if the white colour is taken as the unit and the expression ‘col-oured races’ is continually used in a provocative manner, the other Continents may retaliateand, by using black as their unit of comparison, carry on a murderous crusade against the‘bleached races’ of the world.53

For Chattopadhyaya, the idea of a ‘white man’s cause’ was equal to the British claim ofworld domination; Germany by contrast had appeared to have very different aspirations,

49. Human Resources Calcutta 1925–39, ‘Letter Siemens (India) to Siemens’, 24 Jan. 1931, 9470, SAA.50. ‘Siemens Abroad 1913–1940/Letter Siemens India to SSW’, 6 Jan. 1936, 8156, SAA.51. ‘Education in Germany’ (1929), R77462, German Foreign Office Archives/Politisches Archiv (hereafter PA), Berlin,

Germany; for Siemens’ activities in this area, see also Manjapra, Age of Entanglement, p. 94.52. Anon. (Virendranath Chattopadhyaya), ‘Betrayer of the White Man’s Cause’, in Industrial and Trade Review for India for

Promoting India’s Industrial Development and Foreign Trade Relations, Vol. 3, no. 13 (13 July 1925), pp. 183–4. On thisarticle and its author, see ‘Letter C. Pillai to Pr€ufer’ and enclosed articles, Vol. 3, no. 13 (1925) 16 Aug. 1925, PA-R77414, PA.

53. Chattopadhyaya, ‘Betrayer of the White Man’s Cause’, p. 183.

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which is why ‘we in Asia…have hitherto confined our definition of the white man to Eng-land’.54 However, Chattopadhyaya left little doubt about the importance of the race ques-tion for future Indo–German relations. If the opinions expressed in the Export andImport Review article prevailed:

the distinctions that Indians and Chinese have invariably made between German and Eng-lishmen…will be abandoned, and we shall…add German goods to the list of those that comeunder a boycott.… If Germans in India wish to express their sense of the ‘white man’s cause’by fraternally imbibing whisky and soda in English clubs, they must not expect to retain thefriendship and esteem of the people of India.55

Race was and remained an important point of contestation in the Indo–German relation-ship, with German business executives being accused of discrimination against theirIndian employees, or executives explicitly highlighting the need for greater sensitivitytowards the race question. Because Indo–German relations built on the strategy of politi-cal outsiderness, even accusations of racial discrimination could have negative effects.

Political developments in Germany further intensified the pressure on German–Indianrelations. On 30 January 1933, the Nazi party came to power. As early as February 1933,influential members of the Indian diaspora in Berlin, including the Left-wing journalist A.C.N. Nambiar, were placed under arrest and only released after inquiries by the Britishembassy. After leaving Germany, they reported in the English-language press aboutassaults on them by German stormtroopers, which triggered protests in India.56 But con-ditions stabilised again after the initial shock. Calls for boycott of German products wereshort-lived and German companies’ sales increased steadily in the 1930s.

However, due to high operating costs and an overvalued Reichsmark after the Britishpound and the US dollar abandoned the gold standard in 1931 and 1933, respectively,profits eluded most German firms. Only the dyes manufacturers, which profited from areceptive market in combination with a cartel agreement with Swiss, French and Britishmanufacturers since 1932, were profitable. India developed into I.G. Farben’s largest for-eign market in 1938 with higher sales than in either China or Britain.57

German companies saw the new political developments at home as a challenge to theirbusinesses. To mitigate the problem presented by Nazi political ideas, they activelyengaged in pro-German propaganda in India.58 By contrast, Adolf Hitler made no effortto hide his disregard for India’s quest for independence. In his book, Mein Kampf (MyStruggle), published in 1925, he had already accused Indian nationalists of being nothingmore than ‘chattering busybodies’ (‘schwatzhafte(r) Wichtigtuer’).59 In a speech in 1936,he even went as far as to argue that it was the British who had ‘taught Indians how towalk’, a remark which triggered a storm of protest in the Indian media.60 His negative

54. Ibid.55. Ibid.56. ‘India’s Political Relations to Germany’, 1933, PA-R 77416, PA; Christoph Kreutzm€uller, ‘Augen Im Sturm? Ausl€andische

Zeitungsberichte €Uber Die Judenverfolgung in Berlin 1918–1938’, in Zeitschrift f€ur Geschichtswissenschaft, Vol. 62, no.1 (2014), pp. 25–48; and Maria Framke, Delhi–Rom–Berlin: Die Indische Wahrnehmung Von Faschismus Und Nationalso-zialismus 1922–1939 (Darmstadt: Wiss. Buchges., 2013).

57. Plumpe, Die I.G. Farbenindustrie AG, pp. 197–9, 455.58. ‘Letter Consulate Calcutta to Foreign Office’, 7 June 1933, PA-R 77416, PA.59. For context, see Johannes H. Voigt, ‘Hitler Und Indien’, in Vierteljahrshefte f€ur Zeitgeschichte, Vol. 19, no. 1 (1971),

pp. 33–63.60. Speech by Adolf Hitler on 26 Jan. 1936, in Norman Hepburn Baynes, The Speeches of Adolf Hitler, April 1922–August

1939, Vols 1–2 (London/New York: Oxford University Press, 1942), p. 1258. On reactions to the speech, see Framke,Delhi–Rom–Berlin.

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remarks prompted nationalist leader Subhas Chandra Bose to demand an apology fromthe German authorities. While the Nazi party simply ignored Bose’s call, the German For-eign Office considered his appeal sufficiently important to try and appease him, but with-out, however, promising any concrete political steps.61

World War II, which began on 1 September 1939, abruptly ended active German busi-nesses in India. German nationals there were once again interned as enemy aliens.62 Sta-tistics about the interned businesspeople give a fairly reliable overview of Germanbusiness activity in India in the late 1930s; they show that a variety of German companieshad business interests in the country and had posted German nationals to various places(see Table 1 and Table 2). The biggest employers were I.G. Farben (51 internees), Siemens(36), Krupp (fourteen), Polysius AG (twelve) and AEG (ten).

Prior to internment, most German nationals had resided in Bombay (93) and Calcutta(56) followed by Madras (seventeen), Jamshedpur (ten)—where the Tata Iron and SteelCompany was located—and Lahore (ten). While concentration in the big commercial centresof India is not surprising, it is interesting to note that German businesspeople did not liveexclusively in these localities, but rather were spread out over the vast Indian subcontinent,with one or two representatives of German firms present in many of the smaller cities.

To allow businesses to continue operating during the war, at the outbreak of the con-flict, some German managers passed responsibility for running the businesses to theirIndian employees before being arrested. Krupp’s head manager gave his trusted auditor,P.C. Hansotia, a Parsee, power of attorney for Krupp’s business.63 However, most of thesearrangements were dissolved by the British–Indian authorities before the end of the war.

With the uncertainty caused by the war, German businesses concentrated their effortson managing the internment experience for their employees, supporting them with par-cels and some financial aid and keeping their relatives at home informed about their well-being.64

Non-alignment and trade: German–Indian relations post-Independence

After the end of World War II and Indian Independence in 1947, India and Germanyreinvigorated their economic relationship again. Nehru and his followers consideredindustrialisation and economic autarky a sine qua non for long-term independence, whichwas their prime aspiration:

For too long we of Asia have been petitioners in Western courts and chancelleries. That storymust now belong to the past. We propose to stand on our own legs and to co-operate withall others who are prepared to co-operate with us. We do not intend to be the playthings ofothers… . The countries of Asia can no longer be used as pawns by others.65

61. ‘India’s Political Relations to Germany’, 9 Dec. 1937, PA-R 104777, PA. For Bose, see Sugata Bose, His Majesty’s Oppo-nent: Subhas Chandra Bose and India’s Struggle against Empire (Cambridge: The Belknap Press of Harvard UniversityPress, 2011); Romain Hayes, Subhas Chandra Bose in Nazi Germany: Politics, Intelligence and Propaganda, 1941–43(New York: Columbia University Press, 2011); and Jan Kuhlmann and Christel Das, Netaji in Europe (New Delhi: Rain-light, 2012).

62. Lubinski, Giacomin and Schnitzer, ‘Internment as a Business Challenge’.63. Report by Otto-Zeno Steffens, ‘Kitco Bombay’, 30 Jan. 1947, 51-5059, WA, HA Krupp.64. Lubinski, Giacomin and Schnitzer, ‘Internment as a Business Challenge’.65. Prime minister’s statement, 23 Mar. 1947, in A. Appadorai (ed.), Select Documents on India’s Foreign Policy and Rela-

tions, 1947–1972, Vol. 1 (Delhi/New York: Oxford University Press, 1982), pp. 6–7.

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Table 1. Companies that German internees worked for in 1939.Company Number of internees

I.G. Farben 51Siemens 36Krupp 14Polysius AG 12AEG 10Voith 8Hansa India 6Lohmann & Co. 6Schering AG 6Robert Bosch GmbH 5Dr. C. Otto & Co. GmbH 4MAN 4Maschinenfabrik Sack GmbH 4Carl Zeiss 3Christian Poggensee 3Daimler Benz 3Damag AG 3Deutsche Dampfschiff Ges. Hansa 3Fritz Haeuser AG 3Himalaja Expedition 3Maschinenfabrik Buckau 3Merck 3Miag 3Allianz 2Auto-Union 2Continental 2Deutsche Akademie in Muenchen 2Hugo Schneider AG 2L. & C. Steinmueller 2Lederfabrik Max Schneider 2Maschinenfabrik Wagner-Doerries 2Mannesmann 2Tata Iron Steel 2Bamag-Meguin 1Beiersdorf 1Boehme Fettchemie 1Bombay Talkies 1C.F. Boehringer & Sohn GmbH 1D.O.V. Eildienst 1Deutsches Kali-Syndikat 1Dr. Madaus & Co. 1Elektrizitaetsgesellschaft Sanitas 1F.H. Schule GmbH 1Francke-Werke 1H.C. Mueller & Co. 1Hallesche Maschinenfabrik 1Kistenmacher & Co. 1Klein, Schanzlin & Becker AG 1Maschinenbau & Bahnbedarf 1Rheinmetall Borsig 1Salge-Buehler GmbH 1Schimmel & Co. 1Stahlunion Export 1The Times of India 1Total 237

Source: Database created by the author from Office Waibel, ‘German Internees in the Far East, Orientverein and Waibel to Foreign Office(Kundt, Germany)’, 7 Oct. 1939, 330–443; Bayer Corporate Archives, Leverkusen, Germany (hereafter BA). This holding contains anenclosed list of confirmed payments for a support scheme with a total number of internees of 102; ‘Southeast Asia Internees, Office ofthe “Kaufmaennischer Ausschuss” in Berlin NW 7, I. G.’, 29 Jan. 1940, 330–596, BA, shows that the number of Farben employeesinterned in enemy countries was 50. This source also contains a list of confirmed payments for a support scheme with a total numberof internees of 232 per firm c. Feb. 1940, while ‘Letter Orientverein to Members of the Special Committee’, 3 April 1941, contains anenclosed list of 324 internees in British India as identified by the Foreign Office, 14 May 1940. ‘German Civil Internees in British India,Third Report about the Conditions of Germans in British-India and Ceylon’, Jan. 1940, shows a total of 505 internees in Sept. 1940; ‘HRStatistics, Report our Internees Overseas’, 10 Feb. 1940, 8149, Siemens Corporate Archives, Berlin, Germany (hereafter SAA); and a listof 43 Siemens internees, 15 Jan. 1941, ibid.; Office Waibel, ‘German Internees in the Far East, Letter Orientverein to Waibel’, 3 July1941, and enclosed list of all 243 internees in British India who receive Orientverein support, 330-443, BA; ‘German Civil Internees inBritish India, Fourth Report about the Conditions of Germans in British-India and Ceylon’, Sept. 1941, showing 604 internees, 11 Aug.1941, R 14821, German Foreign Office Archives/Politisches Archiv Berlin (hereafter PA); Office Waibel, ‘German Internees in the FarEast, letter to Paul Sauvage (writer unknown)’, 26 June 1942, 330–443, BA; and ‘German Civil Internees in British India, Fourth Reportabout the Conditions of Germans in British-India and Ceylon’, Sept. 1941, R 14821, PA.

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However, which role exactly India would play was at first uncertain. India celebrated itsindependence at the very moment that the Cold War began to dominate global politicsand economics. With the United States and the Soviet Union establishing themselves asthe two poles of the international arena, most countries were forced to pick a side. How-ever, India saw the fluidity of the post-World War II period as an opportunity and optedinstead for a policy of ‘non-alignment’, in the belief that aligning with either side wouldbring more costs than benefits and was a threat to the country’s newly-achieved indepen-dence. ‘What does joining a bloc mean?’, asked Nehru rhetorically in March 1948. ‘Afterall it can only mean one thing: give up your view about a particular question, adopt theother party’s view on that question in order to please it and gain its favour’.66 And, prag-matically, non-alignment allowed India to trade with and draw economic developmentsupport from countries of both the East and the West.

Shortly after World War II ended, India and Germany, similarly to the period afterWorld War I, discovered once again a complementarity of resources and aspirations.India, after freeing itself from the colonial yoke, was pursuing a strategy of rapid industrialdevelopment, for which imports from the West remained necessary; at the same time, itwas eager to avoid dependence on any particular foreign country. In this context,

Table 2. Places where German internees last resided, 1939.City Number of internees who last resided in this city

Bombay 93Calcutta 56Madras 17Jamshedpur 10Lahore 10Dalmia Dadri 6Delhi 5Cawnpore 4Ahmedabad 3Ahmednagar 3Bhadravati 3Rangoon 3Trichinopoly 3Bangalore 2Burnpur 2Himalaya 2Purwa Hiraman 2Bhavnagar/Kathiawar 1Bhopal 1Chetak 1Coimbatore 1Curaru 1Funalur 1Karachi 1Karur Taluk 1Kevachi 1Sagauli 1Senares 1Total 235

Source: Database by author. See Table 1 sources for reference.

66. Prime minister’s statement, 8 Mar. 1948, in A. Appadorai (ed.), Select Documents on India’s Foreign Policy and Relations,1947–1972, Vol. 1 (Delhi/New York: Oxford University Press, 1982), p. 11.

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collaborating with a politically weak, but increasingly economically potent West Germanywas an attractive response to its dilemma. After the devastation of the war, Germany wastrying to rebuild its economy and re-establish itself on the global market, and was alsolooking to improve its image abroad, displaying both its industrial strength and the legiti-macy of German industry’s leading executives and managers after the Nazi years.67

As early as the 1950s, West German analysts identified India once again as a lucrativeand fairly open market. The West German economic ministry strongly advocated partici-pation in India’s development efforts, while, for the Foreign Office, co-operation withIndia had a political aspect: India’s neutrality regarding recognition of the East GermanDemocratic Republic as an independent state was a major concern of the West Germangovernment.68 Despite its principle of non-alignment, India established full diplomaticrelations with West Germany in 1951, while refusing to give the same privilege to EastGermany until October 1972. The unequal treatment of the two German states negativelyimpacted upon the relationship between India and East Germany, but allowed India toestablish a favourable economic relationship with West Germany.

Indo–West German economic co-operation rested on trade, aid and industrial collabo-ration. As early as July 1948, the Government of India signed its first trade agreementwith the British and US occupation zones in West Germany. Immediately thereafter, bothSiemens and Bayer69 became active in India again through their respective agents.70 Indiawas also the first country in the world to end the state of war with West Germany on 1January 1950, which allowed economic co-operation to intensify.71 India’s imports fromand exports to West Germany stood at Rs60 million and Rs90 million, respectively, in1950, initially leaving India with an export surplus as Germany’s war-shattered economyimported raw materials and foodstuffs in the first years after the trade agreement.72 Dur-ing the period of India’s First Five-Year Plan (1951–56), however, the relationshipreversed. India’s annual average exports to Germany amounted to Rs127 million, com-pared to imports worth Rs370 million (see Table 3).

Under the umbrella of the Second Five-Year Plan (1956–61)—which made rapidindustrialisation a major policy goal—investments in industry and in particular in India’sown iron and steel plants and chemical manufacturing increased, with German multina-tionals providing machinery, chemicals and electrical equipment as well as technicalassistance.

The Indo–German relationship was built on continuities from the pre-World War IIperiod. Several German diplomats who had been leading figures in British India continued toserve in the post-war period. Wilhelm Melchers, who had been head of the Orient-Referat(Middle East Desk) since 1939, became the second German ambassador to New Delhi in

67. For similar strategies employed in Germany, see S. Jonathan Wiesen, West German Industry and the Challenge of theNazi Past 1945–55 (Chapel Hill: University of North Carolina Press, 2001).

68. Das Gupta, Handel, Hilfe, Hallstein-Doktrin; and Odd Arne Westad, The Global Cold War: Third World Interventions andthe Making of Our Times (Cambridge/New York: Cambridge University Press, 2005).

69. After the dismantling of I.G. Farben, several of the companies that had merged in 1925 were re-established, with Bayerbeing one of them.

70. ‘Fruitful Cooperation for 100 Years’, 10 Nov. 1967, Press Information, 68 Li 156, SAA; ‘Participation in Foreign Agencies’,19 Oct. 1961, 8109, SAA; and ‘Bayer Remedies Limited, Bombay’, 9/K/1/2, BA.

71. Das Gupta, Handel, Hilfe, Hallstein-Doktrin, pp. 81–4.72. Central Statistical Organisation, Cabinet Secretariat, Government of India, Statistical Abstract, India 1953–54 (Calcutta:

Government of India Press, 1956), pp. 795, 798.

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1957. Herbert Richter, who had worked at the consulates-general in Bombay and Calcutta inthe 1930s, became counsellor at the New Delhi embassy from 1952 to 1958.73 Two formerSiemens (India) employees, Ernst Kunisch and Walter Knips, took positions as trade com-missioners in Bombay and Pakistan, respectively, in 1952.74 On the Indian side, A.C.N. Nam-biar, who had been head of the Siemens (India) office in Berlin since 1928, was appointed thefirst Indian ambassador to the Federal Republic of Germany in 1951.75 In June 1955, he wasone of the first Indian officials to visit Krupp sites in Rheinhausen and Essen.76

Diplomatic continuities were intertwined with continuous business relationships.While all German business assets had been expropriated during World War II, some firmsmanaged to continue their business under non-German nationals, either Indian employ-ees or non-German Westerners. Only a very few of these initiatives survived into the post-war period, such as certain Siemens employees who continued working in India as ‘ProtosEngineering Bombay’.77 Other German employees stayed in India after being releasedfrom internment, or returned to the subcontinent in the context of intensifying businessrelationships in the late 1940s and 1950s. Of the fourteen Krupp employees who werearrested at the outbreak of war, six remained in India after being released from intern-ment and began working for Indian companies.78 Krupp’s leading manager, Otto-ZenoSteffens, told the company in 1947 that he would return to India because two large Indiancompanies (Tata and Godrej & Boyce) had made him offers of employment.79 The intern-ment experience had created a tight social community of businesspeople with experiencein India, many of whom continued working in India or Asia more broadly.

In 1952, the Indian government approached Krupp to participate in the developmentof an Indian steel plant. In 1953, it concluded an agreement with Krupp and the Duisburgfirm DEMAG to advise Hindustan Steel Ltd in building a steel factory.80 The British mag-azine, The Economist, commented somewhat patronisingly:

Table 3. Value of Indo-German trade (in millions of rupees), 1951–74.Imports into

India% of India’s total

importsExports from

India% of India’s total

exportsBalance oftrade

Annual average for the First Five-Year Plan (1951–56)

370 5.1 127 2.1 ¡243

Annual average for the SecondFive-Year Plan (1956–61)

1095 11.2 173 2.8 ¡922

Annual average for the Third Five-Year Plan (1961–66)

1119 9.0 195 2.5 ¡924

Annual average for the FourthFive-Year Plan (1969–74)

1368 7.0 488 2.7 ¡880

Source: J.K. Tandon, Indo-German Economic Relations (New Delhi: National, 1978), p. 10, based on Economic Survey,Government of India, New Delhi (various issues).

73. See Amit Das Gupta, ‘Divided Nations: India and Germany’, in Andreas Hilger and Corinna Unger (eds), India in theWorld, 1947–1991: National and Transnational Perspectives (Frankfurt am Main: Peter Lang, 2012), p. 301.

74. Lubinski, Giacomin and Schnitzer, ‘Internment as a Business Challenge’.75. Benjamin Zachariah, ‘Indian Political Activities in Germany, 1914-1945’, in Joanne Miyang Cho, Eric Kurland and Doug-

las T. McGetchin (eds), Encounters between Germany and Asia in the Twentieth Century (New York, London: Routledge,2014), pp. 141–54, here: pp. 144, 146, 148–9.

76. Photograph, 16 k 745, WA, HA Krupp.77. Das Gupta, ‘Divided Nations’, p. 302.78. Personnel files about Otto-Zeno Steffens, 1937–1947, ‘Letter Steffens to Krupp’, 11 Dec. 1946, 51-5036, WA, HA Krupp.79. Otto-Zeno Steffens, ‘Letter Steffens to Hobrecker’, 20 May 1947, 131-2668, WA, HA Krupp.80. ‘Krupp Mitteilungen Nr. 1’, Feb. 1954, WA, HA Krupp.

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Though the loss of contracts is bitter to British industrialists, the overriding considerationmust be that German enterprise should find a safe outlet. If Krupp does not build guns, hemust be allowed, in fair competition, to build steelworks, or the consequences for Europewill again be disastrous.81

Three years later, a consortium of German companies signed a contract with the Indian gov-ernment to build the Rourkela Steel Plant in Orissa state (now Odisha), which began produc-tion in 1959 and was officially inaugurated on 12 January 1960 (see Figures 2a and 2b).

A factory town surrounded the new steel plant.82 The West German governmentreflected that many former colonies preferred co-operation with Germany over Britain orFrance because Germany was (falsely) perceived as a ‘country without colonial past’,83

echoing the earlier theme of the outsiderness advantage.In line with earlier experiences, education and technical assistance were once more a

crucial concern. In 1953, the West German government paid half a million deutschmarksto send German experts overseas; the country then sponsored a series of trainingprogrammes in India, investing DM38 million between 1956 and 1960.84 In 1960, WestGermany gave DM7.7 million for an educational workshop for which Germany providedthe machines and tools.85

In 1957, Siemens founded the Siemens Engineering & Manufacturing Company ofIndia Private Ltd, Bombay,86 and went public with it in 1961.87 It was not until 1967, how-ever, after the Indian government gave its approval, that Siemens could return to its pre-war name, Siemens (India) Ltd.88 Bayer similarly established Bayer Agrochem Private Ltdin India in 1958, then returned to its pre-war name, Bayer (India) Ltd, in 1963.

The late 1950s were a period of frequent mutual visits between German and Indianindustrialists and officials. Nehru went to West Germany in 1956 and met with the man-agement board of Krupp;89 Berthold Beitz, chairman of the Krupp steel corporation,reciprocated with a trip to India in 1957.90 Ludwig Erhard, the minister of commerce andfather of the German ‘economic miracle’, went to India in October 1958 and gave guaran-tees of continuing development aid.91 He also proposed small- and medium-sized work-shops to help India’s development and labour problem: ‘While steel works and big plantsare of course important’, Erhard argued, small- and medium-sized workshops could ‘pro-vide employment for the considerable potential of craftsman’s skill which exist through-out Asia’.92

81. Anon., ‘Germany Invests Overseas’, in The Economist, Vol. 168, no. 5744 (26 Sept. 1953), p. 846.82. Anon., ‘New Industrial Town Emerging in Rourkela: Training Schemes in the Steel Works’, The Times of India (27 April

1955), p. A1.83. ‘Auswartiges Amt (LR Matthias), Vermerk betr. Internationale Lastenverteilung bei der Entwicklungshilfe’, 16 Mar. 1961,

B 58/115, PA, quoted in Unger, ‘Export und Entwicklung’, p. 77.84. ‘Protocol of meeting Interministerieller Referentenausschuss’, 6 May 1959, B 61-411/257, PA; and ‘Report about the

Special Meeting of the IRA for Cooperation with Developing Countries’, 17 May 1961, B 61-411/258 AA Referat 407, PA.85. ‘Vgl. Auswartiges Amt’, Referat 407 (Dumke), Aufzeichnung, 10 Nov. 1960, B 61-411/142, PA.86. ‘Fruitful Cooperation for 100 Years’, 10 Nov. 1967, 68 Li 156 Press Information, SAA.87. ‘ZA Rundschreiben Nr. 302’, 68 Li 156, SAA.88. ‘ZA Monatsbericht Okt. 1967’, 68 Li 156, SAA.89. 16 k 1018, WA, HA Krupp.90. ‘Krupp Mitteilungen’, 2 April 1957, p. 43, WA, HA Krupp.91. Anon., ‘Germany will Aid India in Economic Progress: Assurance given by Dr. Ludwig Erhard’, The Times of India (8 Oct.

1958), p. 8.92. Anon., ‘Jobs for the Millions in South-East Asia: Dr. Erhard’s Plan for Small Workshops’, The Times of India (3 Mar. 1959),

p. 8.

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Figure 2a. Employees at the inauguration of the Rourkela Steel Plant, Orissa, 12 January 1960, WA16c/220 H. Source: Courtesy of Historical Archives Krupp (WA), Essen, Germany.

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The rapidly increasing level of German exports to India turned into a balance of pay-ments crisis in the late 1950s, with India needing foreign loans as an emergency measure.West Germany had the largest trade surplus with India of all Western countries and, con-sequently, it became an important player in the negotiations about aid for India. In 1958,West Germany, together with the United States, the United Kingdom, Canada and Japan,under the leadership of the IBRD (International Bank for Reconstruction and Develop-ment, later the World Bank), participated in the ‘Aid India Consortium’.93 The consor-tium started as a rescue operation, but slowly developed into a more permanentorganisation. It provided India with US$350 million in 1958 to overcome the crisis, fol-lowed by an additional US$780 million in 1961. Part of the assistance was the Germangovernment’s agreement to re-finance or provide credit for Indian payments due on theRourkela contracts.94

But not all collaboration efforts developed smoothly. The large and symbolic Rourkelaproject increasingly turned into an economic and image disaster for the German businesscommunity. A German press article dubbed it, with reference to the World War II battle

Figure 2b. Panoramic view of Rourkela Steel Plant, Orissa, 12 January 1960, U��F 2/5.8.57. Source: Cour-tesy of Historical Archives Krupp (WA), Essen, Germany.

93. Shigeru Akita, ‘The Aid-India Consortium, the World Bank, and the International Order of Asia, 1958–1968’, in AsianReview of World Histories, Vol. 2, no. 2 (2014), pp. 217–48.

94. Unger, ‘Export und Entwicklung’, p. 78; John White, ‘West German Aid to Developing Countries’, in International Affairs,Vol. 41, no. 1 (1965), pp. 74–88; and Das Gupta, Handel, Hilfe, Hallstein-Doktrin, pp. 167–73.

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in Russia, ‘the Stalingrad of the German industry’ because of the series of organisationaland construction challenges it faced,95 including numerous work accidents and strikes.Construction of the plant and its operations were constantly compared to a Soviet plantin Bhilai, which was completed almost simultaneously and which achieved better results.96

The long-term consequences of these setbacks require further scholarly attention, but theydid not ultimately put a stop to Indo–German collaboration.

Despite the difficulties at Rourkela, the German government agreed to expand the steelplant in 1962–63, which gave the companies from the initial consortium and a number ofother German suppliers a further reason to expand business with India. However, socialand cultural difficulties continued to challenge the success of the project, and in 1963, theGerman government selected four experts to write a detailed report about the conditionsat Rourkela.97 It subsequently engaged in a series of reform efforts: by 1965, the technicalmanagement had been transferred to Indians, and German personnel at Rourkela werereduced to a total of forty experts. By 1975, Rourkela was contributing about one-sixth ofIndia’s steel production.98

Conclusion

The literature of business history has focussed on Indo–British relations in the context ofcolonialism and India’s struggle for independence from the late nineteenth to the midtwentieth century. However, we know significantly less about the experience of German,Swiss, Japanese, North American and French businesspeople in India who were all activethroughout the twentieth century. Pluralising this dominant narrative of India’s corporatelandscape highlights new players, debates and tensions previously unnoticed.

German multinationals in India had an active presence from before World War I andcontinued to strive for market share even in the context of a volatile political economyand massive disruptions during both world wars. They were remarkable successful inestablishing themselves in India despite British rivalry, leading to a wide geographical dis-tribution of Germans residing in India in the interwar years. Further research may engagein a deeper analysis of the social world of non-British Europeans in twentieth-centuryIndia, a subject about which the literature has surprisingly little to say so far.

The Indo–German economic relationship was shaped by unexpected continuitiesdespite the major political and economic changes. From the beginning of the twentiethcentury, German businesspeople played up their status as outsiders to colonialism andthey continued this strategy into the post-Independence period. The outsiderness advan-tage helped them enter and engage in the Indian market despite the obvious advantagesof their British competitors, such as older social networks, a system of imperial preferencefor certain industries, language and economic regulation that was familiar to and favouredBritish firms.

95. Anon., ‘Russen auf dem Dach’, Der Spiegel, Vol. 14, no. 14 (30 Mar. 1960), pp. 22–34, quote: p. 22.96. For details about the Rourkela project and the related social problems, see ‘Rourkela, Ein “Stahlwerk Im Dschungel”’;

and Das Gupta, Handel, Hilfe, Hallstein-Doktrin, pp. 256–8. For the two steel plants as fronts in the economics of theCold War, see David C. Engerman, The Price of Aid: The Economic Cold War in India (Cambridge, MA: Harvard UniversityPress, 2018), pp. 132–4.

97. Unger, ‘Rourkela, Ein “Stahlwerk Im Dschungel”’, pp. 381–3.98. Ibid., p. 383.

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The politically-motivated outsiderness advantage was rooted in a complementarity ofresource needs between Germany and India. Before World War I, German managerswere looking for a way to gain market share in India, while Indian nationalists in par-ticular areas of the country saw the opportunity to buy non-British goods as a signposttowards their political agenda. After World War I, Germany’s need to access foreignmarkets increased greatly after the devastating war, and India’s hunger for politicalindependence fuelled an unexpected alliance. Moreover, the war had triggered a frag-mentation of the European community in India, highlighting nationality rather thanrace as the dominant line of distinction. After World War II, Germany once more hadto establish its commercial network abroad and was eager to show to the world what itsindustrial enterprises could achieve. At the same time, India looked for a partner thatcould support rapid industrialisation without ‘political baggage’ and without fear ofrenewed oppression.

Several strategies dominated the entire period from the 1890s to the 1960s. Firstly,there were many continuities in the diplomatic and commercial actors on both the Ger-man and Indian sides. Secondly, both Germans and Indians relied on intermediaries togain access to relevant social circles and to signal to the outside world their willingness toco-operate. Thirdly, the focus of the collaboration was not just the exchange of goods formoney, but also involved continuous German investment in business education and train-ing for Indians.

But in parallel with the new alliances, tensions also emerged. The most controversialissue was the question of race. Several problems in the relationship between India andGermany had their roots in German racism or insensitivity towards their Indian partners,and these problems were amplified during the Nazi era. Attempts by German authoritiesand businesspeople to mitigate some of these challenges show that their negative impacton business was well understood. However, throughout the period, derogatory racially-motivated comments remained a constant.

German firms in India are but one example of foreign multinationals from outsidethe British Empire that shaped Indian business history. Future research should continueto bring insights into the voices and experiences of different groupings in India. Infor-mation about multinationals from other countries such as Japan, Switzerland, theUnited States and France may help to further contextualise the findings of this article.Equally interesting may be the encounters between Germans and Indians in other partsof the world, for example in Tanganyika (now part of Tanzania), where similar debatesmay have taken place. The future research agenda should also explore the experiencesof local employees, both Indian nationals and Westerners. Finally, the question ofwhether the continuities identified here ceased to exist at some time during the lastthird of the twentieth century, or continued to shape the Indo–German relationship,remains to be answered.

Acknowledgments

I would like to express my sincere gratitude to the three anonymous South Asia reviewers for theirinsightful comments, as well as to Christopher McKenna, Rory Miller and the participants in theBusiness History Conference 2018 for their critical feedback on an earlier version of this paper.

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Special thanks go to Dr. Frank Uekoetter of the Siemens Corporate Archives, Ruediger Borstel of theBayer Corporate Archives, and Prof. Dr. Ralf Stremmel and Simone Snyders both of the Krupp Corpo-rate Archives. Without their continuous support and expertise, this article would not have beenpossible.

Disclosure statement

No potential conflict of interest was reported by the author.

ORCID

Christina Lubinski http://orcid.org/0000-0001-9150-3284

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