INDIAN BOURGEOISIE AND FOREIGN CAPITAL 5 cotton—and at a later date, yarn—was exported both to China and Great Britain.11 Till the 1850's the only mode of accumulation of capital for the Gujarati bourgeoisie was by thus linking itself to the self-expansion of British capital. Some, like the Tatas, reaped fortunes by their participation in Britain's colonial adventures.12 The establishment of cotton spinning mills from the 1850^ onwards and of factories for the weaving of cloth in the 1860's undoubtedly marked the beginnings of the process of transformation of merchant capitalists into industrial capitalists. However, the collaborationist feature remained primal, even if diluted somewhat in the new found activities of modern industry. The production of cloth and its marketing in the domestic market, produced areas of conflict with British capital; this conflict remained of an incipient nature, however, the overlapping of interests in the field of trade and commerce still being paramount.13 In Bengal, by contrast, Indian capital had to suffer a far more ubsidiary role, well into the twentieth century. Entry barriers, coupled with zamindari as an attractive proposition for absorption of money capital,14 restricted the role of Indian capital in large-scale industry, to one of acquiring shares in British enterprises, especially in jute mills.15 A further heterogeneity was introduced in the evolution of the Indian bourgeoisie, by the element of caste and nationality. This was because of the perpetuation and expansion of the intra-caste credit system, which existed in opposition to the capitalist credit system under the monopoly control of the British.16 The carryover of this feudal relic, was another product of the development of capitalism under colonial rule. As a consequence of this credit system, there tended to be a unity in the nature of activities indulged in by particular ethnic groups. Thus, while in the Bombay seaboard, by the end of the nineteenth century, Gujarati merchants had acquired considerable interest in industrial and foreign commerce, the Marwari merchants remained tied to the traditional fields of domestic trade and usury.17 A link that persisted well into the 20th century, was that between elements of the indigenous bourgeoisie and the native princes. While on the one hand, individual merchants had become great landlords in their own right, on the other hand, princely families made direct investments in industry,18 leading to the forging of close ties between the dominant Gujarati and Marwari bourgeoisie with the feudal princes. From the second half of the 19th century, to the outbreak of the First World War, elements of this indigenous bourgeoisie began to expand into industrial activity and simultaneously to sow the seeds for a new basis for their relationship with the British colonial regime. The transformation of indigenous capital into industrial capital and the establishment of indigenous joint-stock banks on the foundations