The Chettiars and Their Influence on Global Trade

A new book captures the history of the rise of the mercantile community from Tamil Nadu who exerted great influence as traders and bankers

- Raman Mahadevan

Ceylon, possibly because of its geographical proximity to their homeland, was among the first overseas regions to which the Chettiars went in search of profitable business opportunities. Their association with Ceylon went back to when it was under Dutch rule, between 1656 and 1796. However, owing to their restrictive trade policy, characterized by monopolies, the scope for investment was limited and the Chettiars' activities were on a low key. It was only after the establishment of British rule through the English East India Company, followed by the lifting of restrictions on internal and external trade, that there was a noticeable flow of Chettiar capital into Ceylon. The Ceylon Chettiar Chamber of Commerce, while recalling the history of the community, claimed that the first Chettiar firm in the island was established in 1820. This marked the initial phase of the organized flow of Chettiar capital.

One of the noticeable features of the Chettiars' investment portfolio was their external and internal trade in a host of commodities. They established a firm grip over the import trade in rice, sourcing it through their agency firms from Bengal and Thanjavur. Such was their control that even the resident European merchants had to pay large sums of money to the Chettiars to secure the necessary supplies. They also controlled much of the coastal trade in arrack and other coconut products between Ceylon and Madras. The lucrative raw cotton trade was another line of their business, which they lost later when it relocated to Tuticorin and the cash advance system was abolished.