When Jamsetji Tata did not shy away from shutting first business of Tata Group

Jamsetji Tata's strategic decision to exit the unviable Tata Shipping Line in the 1890s showcased his bold leadership.

Known for the successful ventures he established, Jamsetji Tata, founder of the Tata Group, did not shy away from taking tough calls and making strategic choices to exit from unviable business as shown by the shutting of Tata Shipping Line in the 1890s, according to a new book.

He had started the 'Tata Line', the first-ever business of the Tata Group which bore the Tata name, with a view to challenge the monopoly of the English P.&O., the pre-eminent shipping line that carried exports from India during the 1880s and 1890s.

The English P.&O. which had the support of the then British India government, had a virtual monopoly on shipping from India and charged Indian merchants exorbitant freight rates, while providing greater rebates on British and Jewish firms thereby creating an uneven playing field for Indians, according to the book titled 'Jamsetji Tata - Powerful Learnings For Corporate Success'.

"Jamsetji Tata, who was in the textile business at that time, was adversely impacted, and he felt that this was very unfair to Indians," wrote the authors, R. Gopalakrishnan and Harish Bhat, two Tata group veterans, in their recently released book published by Penguin Random House India.

The pioneer of modern Indian industry then travelled to Japan to strike a collaboration with Nippon Yusen Kaisha (NYK), the largest shipping line of that country, which agreed to partner provided Jamsetji took "an equal risk in the venture and ran the ships on his own".

Afterwards, he chartered an English ship 'Annie Barrow' at a fixed rate of 1,050 pounds per month and made it the first vessel of the new shipping company, which he called the 'Tata Line' — this was the first ever business of the Tata Group which bore the Tata name.

Jamsetji felt that this venture would benefit not only his textile business but also the entire Indian textile industry through lower shipping rates of ₹12 per tonne of freight as compared to ₹19 per tonne charged by P.&O and break the latter's monopoly.