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Between 1927 and 1934 a direct confrontation opposed Indian nationalism and British imperialism. It culminated in the two successive Civil Disobedience movements of 1930–1931 and 1932–1934 separated by a truce which lasted from March 1931 to January 1932. Following the abandonment of Civil Disobedience by the Congress in April 1934 there was a return to constitutional politics, and the reformed Constitution adopted by the British Parliament in August 1935 redefined the rules of the political game. These were years of turmoil during which the political resources of Indian businessmen were put under heavy strain, leading to an open split in their ranks. In this chapter, attention will be focused primarily around the origins and course of such a split. Although the detailed story will be taken up only from the time of the Gandhi–Irwin pact of March 1931, an analysis of the trend during the 1927–1931 period is necessary to an understanding of subsequent events. Indian business, the Congress and the Raj November 1927–March 1931 The direct confrontation between the Congress and the Raj was sparked off in November 1927 by the visit of the Indian Statutory Commission. While political tension was mounting, the relations between the government and Indian big business were also reaching their lowest ebb for many years. This deterioration was due to several causes – the obstinate refusal of the government to devalue the rupee in spite of an active campaign for devaluation launched by Indian business circles, the continuing conflict around the reservation of coastal traffic to Indian shipping companies and the rejection by the government of the recommendations in the report of the 1927 Indian Tariff Board for a rise in the duty on imported cotton goods. [ABSTRACT FROM AUTHOR]

Although some of India's major business families can trace their ancestry as far back as to the Moghul period, the origins of the modern Indian business class are unmistakably colonial. Its rise is closely linked to developments which took place in the Indian economy in the post-1850 period. The following section is a brief sketch of the rise and growth of this class. The rise and growth of an Indian business class (1850–1930) After 1850 there occurred a big spurt in the internal and external trade of India, due to the growth of commercial agriculture, and the first beginnings of a large-scale mechanized industry were witnessed. In clear contrast to the case of most other European colonies in Asia and Africa, in India indigenous businessmen were capable of exploiting some of the new opportunities offered by the development of trade and industry. While foreign trade itself was largely monopolized by European commercial firms, the financing and forwarding to the ports of the commercial crops (mainly cotton and jute) as well as the redistribution of imported goods within the interior offered a vast field to indigenous merchants and bankers. Some trading communities of Western and Northern India showed a remarkable ability to seize on these opportunities. Among them were: the Parsis, who had developed a special relationship to the British, firstly in Surat and later in Bombay where they had played the role of junior partners in the China trade; other communities of Western India, such as the Bhatias of Cutch or the Khojas, and the Marwaris of Rajasthan, whose spread throughout Northern, Eastern and Central India had received a new impetus from the establishment of the Pax Britannica. [ABSTRACT FROM AUTHOR]