Uses of History and Information Asymmetries in German-Indian Business Relations before 1947

Christina Lubinski

Managing information asymmetries is a major challenge for businesses going global, and multinationals have for the longest time discussed this obstacle and sought solutions. When German firms first started systematically working the Indian market in the late nineteenth century, managers were well aware of their information deficit vis-à-vis British first-movers. The intimate knowledge of Indian political and economic conditions British managers had gave them a competitive edge in the British Raj. At the same time, ever since the nationalist uprising in Bengal in 1905, Indian independence activists were open to the idea of cooperating with Britain’s Western rivals in the hope of incrementally achieving their independence of Great Britain. Germany as the major economic rival of Great Britain before World War I and political opponent in both world wars was a favorite partner to nationalistically-thinking Indians.

The paper deals with the long-term development of German business in India from the late nineteenth century to Indian independence in 1947. It explores which information deficits German multinationals were seeking to overcome and which strategies they employed to do so. In particular it focuses on the use of history and historical narratives, which German businesspeople in cooperation with local “knowledge brokers” created and helped circulate to increase legitimacy and business success in the context of the Indian independence movement. The paper will show how these stories were created in a dialogical process between businesspeople and stakeholders and how they were changed and reinterpreted at different points in time. It also highlights that cooperation was often limited by racial tensions with information management and thinking in racial categories interacting.

Empirically, the paper is based on German corporate archives, such as the electrical giant Siemens, several dye stuff companies, such as Bayer and I.G. Farben, as well as small- and medium sized manufacturers of cutlery, a typical bazaar good. Further sources come from the West Bengal State Archives, the India Office Records (British Library), the archives of the German Foreign Ministry and the National Archives of Germany.