produce weapons and implements of high quality.

Blacksmiths and other craftsmen

remained the main suppliers of the rural market for tools and agricultural
implements throughout the colonial period, adapting their tech-niques to make use
of manufactured iron and scrap. From the late eighteenth century onwards
European entrepreneurs tried to improve local iron-making by splicing in isolated
pieces of British technology, such as the use of smelting coal and blast-furnaces.
The most substantial enterprise of this type was the iron works at Porto Novo in
Madras which was promoted by J. M. Heath, a former East India Company official,
with assistance from the Company and the Government of Madras in 1825. This
factory was based largely on traditional methods, using charcoal for smelting and
animal power for bellows and forging equipment. Lacking economies of scale and
the technological capacity to create a new niche in the market, it could compete
neither with imports of British coke-produced blast-furnace iron and steel nor with
the product of traditional smelters in the villages, and had ceased to be a serious
proposition long before it was finally wound up in the 187os.

The first recognisably modern iron works in India was established by the Bengal Iron
Works Company in 1874. This, too, had a chequered and largely unsuccessful
career. The company began to produce iron in 1877, but was already heavily in debt
and committed to outmoded technology, and closed down two years later. The
Government of Bengal, which had offered some sup-port in an attempt to obtain
local supplies of railway equipment, bought up the defunct firm, operated it as a
public company for a few years, and then sold the assets to a group of British
businessmen who re-established the enterprise as the Bengal Iron and Steel
Company in 1889. The new Bengal Company was again undercapitalised, and
lacked adequate information on input costs or market potentialities. The
government refused to provide subsidised loans to weather a crisis in the mid
189os, but in 1897 agreed to purchase 10,000 tonnes of iron annually (more than
half the output of the works) for ten years, at rates 5 per cent below the import
price. This agreement was not renewed in 1907, and an attempt to begin steel
production at the plant, for which the government had agreed to subsidise a rate of
return of 3 per cent for ten years, failed at the same time. In 1910 the Company got
access to new and improved supplies of ore and coal, and by the First World War
had established itself as a modest producer of iron products, mostly of pig-iron for
export; it made good profits during the war, but lacked any clear potential for
expansion thereafter except into cast-iron pipes, and ceased large-scale production
of pig-iron in 1925.

In 1918 a second iron works was founded in Bengal by the Indian Iron and Steel
Company (IISCO), which was linked to the Bengal Company through