B usiness C ommunities ’ Many sociological studies of the Indian economy have focused on ‘traditional merchant communities’ or castes such as the Nakarattars. As you have already learned, there is a close connection between the caste system and the economy, in terms of landholding, occupational differentiation, and so on. This is also true in the case of trade and markets. In fact, ‘Vaisyas’ constitute one of the four varnas – an indication of the importance of the merchant and of trade or business in Indian society since ancient times.
However, like the other varnas , ‘Vaisya’ is often a status that is claimed or aspired to rather than a fixed identity or social status. Although there are ‘Vaisya’ communities (such as banias in North India), whose traditional occupation has been trade or commerce for a long time, there are some caste groups that have entered into trade. Such groups tend to acquire or claim ‘Vaisya’ status in the process of upward mobility. Like the history of all caste communities, in most cases there is a complex relationonship between caste status or identity, and caste practices, including occupation.
The ‘traditional business communities’ in India include not only ‘Vaisyas’, but also other groups with distinctive religious or other community identities, such as the Parsis, Sindhis, Bohras, or Jains. Merchant communities did not always have a high status in society; for instance, during the colonial period the long-distance trade in salt was controlled by a marginalised ‘tribal’ group, the Banjaras. In each case, the particular nature of community institutions and ethos gives rise to a different organisation and practice of business. To understand the operation of markets in India, both in earlier periods and at present, we can examine how specific arenas of business are controlled by particular communities.
One of the reasons for this caste-based specialisation is that trade and commerce often operate through caste and kinship networks, as we have seen in the case of the Nakarattars. Because businessmen are more likely to trust others of their own community or kin group, they tend to do business within such networks rather than with others outside – and this tends to create a caste monopoly within certain areas of business. Agricultural work in a village