Kolkata: Decline and Revival

How Kolkata went from India's leading commercial city to relative decline, the reasons behind it, and signs of new growth.

Kolkata (Calcutta) was the capital of British India until 1911 and long its leading commercial city.

Its peak

Port and trading centre.
Jute mills along the Hooghly river.
Headquarters of major companies.

Decline

After independence, Kolkata’s relative economic position fell:

Partition in 1947 brought refugees and cut off the jute-growing hinterland in East Bengal.
Freight equalisation (1952-1993) removed eastern India’s advantage in minerals, as prices were equalised nationwide.
Labour unrest and strikes in the 1960s and 1970s pushed companies to leave.
Jute declined as synthetic packaging replaced it.
Port silting reduced capacity.

Revival efforts

IT hubs in Salt Lake and New Town (Rajarhat).
Services, education and healthcare.
The Kolkata Metro, India’s first (1984), expanded, including an underwater section under the Hooghly (2024).

Challenges

Attracting large investment, especially after the Singur Tata Nano controversy in 2008.

The Nano's departure

In 2008, after protests over land acquisition, Tata moved its Nano car plant from Singur in West Bengal to Sanand in Gujarat, a symbol of the challenges of industrial investment in the state.

Thinking Kolkata was always less important

It was once India's leading commercial city and British capital.

Key takeaways

Kolkata was British India's capital until 1911.
Partition, freight equalisation, strikes and jute's decline hurt it.
IT hubs and the metro support revival.
Attracting large investment remains a challenge.