'Babus carried British disdain': Saurabh Mukherjea on how post-Raj bias crippled Indian enterprise

India’s startup wave may feel like a modern miracle, but as investor Saurabh Mukherjea points out, it’s really a comeback — a return to a legacy buried by British colonialism and bureaucracy. Drawing from Lakshmi Subramanian’s India Before the Ambanis, Mukherjea argues that India was once teeming with “unicorns” long before the term existed, only to see that thriving entrepreneurial class dismantled over centuries of systemic sabotage.

Speaking recently on India’s economic legacy, Marcellus Investment Managers founder Saurabh Mukherjea spotlighted a forgotten era of massive Indian enterprise — centuries before liberalization and the Ambanis.

Citing Lakshmi Subramanian’s acclaimed book India Before the Ambanis, Mukherjea said that during the height of Mughal rule — roughly from the 16th to 18th century — India enjoyed robust law and order, stable governance, and a booming trade ecosystem. “Commerce flourished not just within India but across the Indian Ocean,” he said. “We were the central trading power between the Middle East and Southeast Asia.”

India wasn’t just rich in trade — it was rich in traders. Mukherjea listed merchant tycoons like Virji Vora, Shantilal Zaveri, Mulla Abdul Gaffar, and Jagat Seth as early billionaires, combining roles as financiers, cotton traders, moneylenders, and shipping magnates. “There were unicorns even then,” he said.

But that legacy took a decisive turn when the British arrived. According to Mukherjea, the colonial administration realized Indian entrepreneurs were formidable — and began working to displace them. Policies actively discriminated against local business communities, including Parsis in Bombay and stalwarts like Dwarkanath Tagore in Bengal.

“Even worse,” Mukherjea added, “they launched a psychological campaign — portraying Gujarati, Marwari, Parsi, and Sindhi businessmen as greedy and untrustworthy.” This cultural distortion not only undermined Indian entrepreneurs in their own society but also created a stigma that lingered well beyond independence.

After 1947, the British left — but their bureaucracy stayed. The Indian Civil Service, rebranded as the administrative elite, carried forward the colonial suspicion of private enterprise. “The babus inherited the British disdain for business,” said Mukherjea. “And that hostility lasted until 1991.”

Only with the economic reforms led by P.V. Narasimha Rao and Manmohan Singh did India begin to reclaim its entrepreneurial spirit. “We’ve now reversed that long decline,” he said, noting that company registrations today are three times higher than a decade ago.

But as Mukherjea warns, the scars of that colonial dismantling still linger. Understanding where Indian business came from may be key to ensuring it keeps moving forward.