Recent headlines have spotlighted the immense wealth of Indian billionaires, showcasing a shift in global economic narratives. Indian newspapers recently reported that the Tata Group’s total market value has surpassed Pakistan’s GDP, which stands at $341 billion. With the Tata Group valued at $365 billion, this comparison underscores the staggering scale of wealth among India’s elite.
In April, Forbes magazine unveiled its list of the world’s 200 richest individuals, and prominently featured 12 Indians, whose combined wealth totals a remarkable $400 billion. Forbes also noted that among the 2,781 billionaires globally, 200 are Indian. This places India as the third-largest country for billionaires, trailing only the U.S. and China—a record highlighted by Forbes. Importantly, these figures are measured in U.S. dollars, not Indian rupees.
Adding to the narrative, on July 15, 2024, global media reported that Indian tycoon Mukesh Ambani spent a staggering $600 million on his son’s wedding. The attendees of this opulent event had a combined net worth of $600 billion, further amplifying the scale of wealth in India.
These headlines collectively paint a picture of India’s burgeoning economic influence and its growing soft power on the world stage. While these billionaires are a small fraction of India’s 1.5 billion population, their prominence highlights a dramatic shift in economic fortunes. Just two or three decades ago, India was frequently criticized for having 50% of its population lacking basic amenities like toilets and grappling with high poverty levels.
However, in the past nine years, India has lifted 250 million people out of poverty, and by 2035, it is projected to become the world’s third-largest economy. This transformation raises several questions: How did India make such significant strides from being behind Pakistan in social and economic indicators up until 1980? What role have billionaire entrepreneurs played in this remarkable ascent? Why has Pakistan not produced billionaires of the stature of Tata, Ambani, Birla, and Adani, who play a pivotal role in nation-building? Is the absence of such billionaires in Pakistan due to structural issues, or is there another underlying factor at play?
These questions underscore a broader conversation about economic development and wealth creation in the region, inviting a closer look at the factors driving India’s success and the challenges faced by its neighbors.
Pakistan’s absence of globally prominent entrepreneurs and billionaires is rooted in a complex mix of historical, political, economic, and social factors. To illustrate the contrasting success, let’s examine the contributions of four major Indian tycoons to the Indian economy: Tata, Ambani, Birla, and Adani. These influential figures have made substantial impacts and offer valuable insights into how such success is achieved.
According to 2023 statistics, the combined annual exports of these four groups exceed $85 billion. Over 1.3 million people are directly employed by these companies, with many more working in associated sectors. Last year alone, the Tata and Ambani groups contributed 434 billion rupees in corporate taxes. Additionally, these major groups invest in infrastructure, technology, and research and development, contributing to India’s current economic growth rate, which surpasses that of China.
Now, turning to our main question: why aren’t similar giants emerging in Pakistan? To understand this, we need to delve into history
Muslims ruled the Indian subcontinent for a thousand years, but business was never a priority for them. This is evident from the fact that when the East India Company took control of the subcontinent, Muslim schools emphasized philosophy, literature, Greek medicine, and religious education. In contrast, schools associated with temples focused on teaching accounting and bookkeeping. Graduates from these institutions went on to serve in the business, commerce, and banking sectors.
This is where the term “Baniya” (a trader or merchant) became prominent, with most of these traders coming from Gujarat and Rajasthan. As a result, the business sector was largely controlled by the Hindu and Parsi communities from the beginning. This historical context explains why the Muslim education system did not produce a workforce capable of creating major entrepreneurs. Muslims produced scholars, poets, and writers, but business ventures like Tata’s were already established in the 18th century.
During World War II, the iron produced by Tata Steel was used in the tanks of the Allied forces. In 1932, Tata established India’s first airline, which later became Air India. An interesting historical anecdote is that in 1946, before independence, a joint interim government was formed with the Congress and the Muslim League, and Liaquat Ali Khan was appointed as the Finance Minister. When Liaquat Ali Khan presented the first budget, it was labeled as a socialist budget. This led to strong protests from the business community, as Liaquat Ali Khan imposed a 25% tax on profits of 100,000 rupees and doubled the corporate tax rate. At that time, the Hindu community accused the government of targeting Hindu and Parsi traders like Birla, Bajaj, Walchand, Tata, and Godrej. The only Muslim name in this category was Hamid of the Supala Group in the pharmaceutical sector, but he was also a supporter of Congress and remained in India after the partition. After the partition, the business community in Pakistan was predominantly composed of Hindus and Parsis, who migrated to India after the partition.
In this historical context, Pakistan was established with minimal industrial base and a shortage of skilled labor. Meanwhile, the British had heavily invested in industry, education, and infrastructure in Bombay, Calcutta, and Chennai. In contrast, Pakistan was dominated by feudal lords with little interest in business. Despite this, during Ayub Khan’s era, reforms began, and Pakistan initially surpassed India in economic terms. In the first forty years after independence, Pakistan’s growth rate averaged 6%, while India grew at 4%.
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However, things changed when the government nationalized private industries under the slogan of ending the dominance of 22 families. This not only ended entrepreneurship but also led to Pakistan’s economic downfall by the 1990s. Since we’ve mentioned the 22 families, it’s also worth noting the Gujarat connection. Historically, most of the major traders in the subcontinent were from Gujarat, and this remains true today.
Of the four major Indian giants mentioned earlier, three—Ambani, Tata, and Adani—are from Gujarat, while Birla hails from Rajasthan. In addition, family business groups such as Mutal, Ojha, Parekh, Patel, Premji, Mistry, Wadia, and Godrej are also from Gujarat. In fact, the majority of India’s billionaires come from Gujarat. Gujaratis have a stronger entrepreneurial spirit than any other community.
Gujarat has a historical and geographical connection with our province of Sindh. This is why, even before Pakistan was formed, the Gujarati business community held a significant presence in Karachi. The father of the nation, Quaid-e-Azam Muhammad Ali Jinnah, was also from Gujarat and migrated to Karachi. After the formation of Pakistan, the Gujarati community in Karachi established the foundations of business and industry. Groups such as Dadabhai, Lakhani, Hashwani, Adamjee, Habib, Bhundara, and Dawood were founded, all with roots in Gujarat. Today, Karachi contributes 50% of Pakistan’s revenue, with a significant role played by the Gujarati Memons.
After the formation of Pakistan, these Gujarati business families laid the foundation for entrepreneurship and had established a significant presence by 1970. However, the era of Bhutto brought about the nationalization of industries. The scale of this devastation can be illustrated by one example: In 1970, the Dawood Group was at the peak of its business. They owned petroleum, chemicals, fertilizers, paper, jute mills, textiles, and a shipping company, employing 35,000 people across these industries. Everything was nationalized, including their 25 commercial vessels in the shipping sector. The government merged these with nine other shipping companies, nationalizing a total of 75 commercial vessels and establishing the Pakistan National Shipping Corporation.
By 1992, when the Nawaz Sharif government allowed private shipping companies again, the PNSC had only 25 commercial vessels left. This was the scale of the devastation. Under such circumstances, could any entrepreneur emerge? Interestingly, in 1992, India, under Finance Minister Manmohan Singh, embarked on economic liberalization. Structural reforms were implemented and were further advanced by subsequent governments. This is why, since 1992, India has never had to go to the IMF for assistance. In 2017, Forbes magazine published a report with the headline, “India is producing a new billionaire almost every month.”
The report highlighted a startup boom in India, noting that 65% of billionaires are self-made entrepreneurs. According to Forbes, the number of Indian billionaires was only 12 in 2005, but by 2016, it had increased to 84. As of today, this number has risen to 200.
In contrast, after 1992, Pakistan experienced a series of challenges: repeated IMF programs, frequent changes in government, political instability, terrorism, and policy inconsistencies. As a result, industries and businesses were severely damaged.
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In 2010, Mian Masha’s name was listed as the 937th billionaire in Forbes, but he did not appear on the list again. Although Bigger Brighter Pakistan’s 2023 ranking indicates his wealth is $3.7 billion, he, along with others like Saddaruddin Hashwani, Asif Zardari, Malik Riaz, and Nawaz Sharif—who all have wealth exceeding $1 billion—were not included in Forbes’ certified billionaire list. Why is this the case? Does Pakistan really have no billionaires, or if there are some, why is the economy not benefiting from their wealth.
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