+ CII@125:‌ ‌The‌ ‌Merger‌ ‌and‌ ‌the‌ ‌Move‌ ‌to‌ ‌Delhi‌ ‌ - CII Blog

As socio-political changes swept across independent India, the two engineering associations redoubled their efforts for growth of the industry. The Indian Engineering Association (IEA) with its British origins was affiliated to the formidable Bengal Chamber of Commerce and through it to the Associated Chambers of Commerce and Industry of India (ASSOCHAM). At the same time, the Engineering Association of India (EAI), with its domestic membership base was associated to the Indian Chamber of Commerce and the Federation of Indian Chambers of Commerce and Industry (FICCI). Both grew in stature with their different styles and modes of operation, yet with the same goal. 

IEA Members had Sterling holdings with shareholders in England who played a key role in the India business strategies. EAI Members were largely family-held firms with few foreign shareholders. Most followed traditional accounting and management practices, unlike IEA firms which were managed by managing agencies and remained dominated by the British. Their structures differed too and while IEA operated through divisions to manage sectors, EAI operated through affiliated associations. 

The two organisations shared a lot of common space and concerns. Industry was grappling with regulations and licences, production lagged demand, raw material procurement remained a challenge and entailed much interaction with the Government, and industry strove to optimally utilise the scarce resources.  

Both associations worked towards addressing these, and often collaborated on issues such as labour relations and others.

The 1960s saw a new generation of industrialists taking over, many Indian and professionally qualified. The distinctions between IEA and EAI were blurring, and by early 1970s, though IEA was clearly the stronger organisation, the rationale for having two associations was dissipating.  

Meanwhile, the regional spread of the growing engineering industry led to its own set of challenges in the late 1960s. Reflecting the rifts between the Bengal Chamber of Commerce and the Bombay Chamber of Commerce, the Kolkata-based IEA’s Mumbai members conceptualised a regional model of governing the Association. The powerful members in Mumbai were not happy that Kolkata committee members enjoyed a national status. 

The dissensions between the two regional groups was set to grow when stalwarts from both sides stepped in. At a historic meeting, Sanjoy Sen, chairman of the Eastern Region Committee, and Admiral BA Samson, chairman of the Western Region Committee, agreed on a new structure for the organisation which was put into effect in 1971, thus averting a breakdown.

During the next two years, IEA and EAI found themselves representing on the same issues to the same officials. Then Secretary of Heavy Industries, Mr Mantosh Sondhi, who routinely dealt with both associations and their often-divergent views, catalysed the merger by stressing the advantages of having one strong voice represent the engineering industry. The idea found acceptance with Mr MK Jhawar, the President of EAI in 1971-72, who knew that neither association had the funds for independent growth. The IEA President, Mr PK Nanda, also saw merit in merging rather than competing. 

After a historic luncheon meeting in Delhi, facilitated by Tarun Das, the many structural differences between the two organisations were discussed, difficulties in coming together were ironed out and the merger was finally agreed upon. 

On 23 August 1973, the first joint meeting of the two associations was held where the idea of the merger was presented. After several meetings to hammer out the modalities, in April 1974, IEA and EAI merged to become the Association of Indian Engineering Industry (AIEI). At the Grand Hotel Ballroom in Kolkata, the historic agreement was signed and the assets of the liquidated IEA and EAI were transferred to the new, larger body, the AIEI. 

Thus, the annals of the Indian chamber movement changed forever, creating a new entity that would go on to set a new template for industry associations, not just in India, but in the world.  

Members of the Executive Council AIEI in 1974

PK Nanda – President

KG Khosla – Vice President

BK Agarwal, FS Baldiwala, SC Chokhani, PR Deshpande, CG Devaya, H Eswaran, K Hartley, FAA Jasdanwala, Om Khosla, SS Kirloskar, MM Lal, JB Leslie, T Mathew, S Muthukrishnan, Satya Paul, VP Punj, RD Pusalkar, NK Rajgharia, KK Roy, RK Saboo, BA Samson, Jayant H Shah, RJ Shahaney, AL Bagri, SK Birla, JK Clubwala, Bharat G Doshi, BK Jhawar, Farhat Said Khan, RC Maheshwari, S Santhanam, HS Singhania.

Secretary of AIEI – Tarun Das

A turning point in the history of the Chambers was the delinking of the new association from ASSOCHAM and FICCI to form a new grouping. 

At the first meeting of AIEI on 24 April 1974, the blueprint for the organisation was crystallised. It included the formation of a Steering Committee comprising the President, the Vice President and the Regional Chairmen, expansion into new states and smaller cities, the Vice President becoming the next President, no canvassing for elections to the Regional Committees, the Executive Council or the subcommittees, and that the Secretary would be responsible for the Secretariat staff. 

Perhaps the most important decision, which became the pole star for the new association, was that it would work in partnership with the Government, irrespective of which Government was in power.

Till date, CII is guided by these principles and processes. 

With many liabilities and few assets, the newly formed AIEI faced several challenges: the aftermath of the failed monsoon of 1972-73, the cost of rehabilitation after the 1971 war with Pakistan, The Foreign Exchange Regulation Act of 1973 (FERA) and the Industrial Licensing Policy, and inflation at 28%. 

While AIEI operated for a few months out of the Kolkata office of the Indian Chamber of Commerce, clearly the new association saw for itself a larger role and geographic footprint than its predecessor associations. New Delhi, the capital of India, beckoned. 

AIEI found its first office in the large Exhibition Area in Pragati Maidan through a rather circuitous route: The Trade Fair Authority of India (TFAI), which had called off its 1975 exhibition, offered it office space in Pragati Maidan if AIEI could organise an international engineering exhibition within the next three months. With almost no resources or the requisite experience, AIEI worked 24 X 7 to launch the Indian Engineering Trade Fair (IETF), which was inaugurated by President Fakhruddin Ali Ahmed in 1975.

Against difficult odds, the new AIEI pulled it off with tremendous success. IETF marked the beginning of theme-based trade fairs for the country and earned the AIEI a prominent mindspace among industry and the Government.