9 - The growth of the iron and steel industry

Summary

THE FORCES BEHIND THE SURVIVAL AND GROWTH OF TISCO

The enterprise of the Tata Iron and Steel Company constitutes the single most important instance of pioneering by private enterprise in India during the twentieth century. The representatives of both the British government and the nationalists used superlatives in describing the achievements of the Tata Iron and Steel Company (TISCO) in the field of steel. It grew up without tariff protection to guard its infancy, weathered the crisis of the years 1923–34 under the umbrella of protection and then dispensed with protection altogether. It is useful to enquire into the factors which allowed it to grow into a viable enterprise when the steel industry all over the world was passing through a general crisis.

The major factors which contributed to the survival of the steel company were (a) the initial advantages enjoyed in terms of location of the plant, (b) the initially favourable attitude of the government to the enterprise, possibly induced by the decline of British steel in the Indian market, (c) the grant of protection to the industry by the Government of India both as a reward for the loyal service of TISCO in the First World War and as an insurance against another major war, and (d) the steep reduction in costs effected by TISCO during the period 1923–33. We shall deal with these different aspects in turn.