Dadabhai Naoroji (4 September 1825 – 30 June 1917) was an Indian political leader, merchant, scholar, and writer who played a role in both Indian and British public life. He was among the founding members of the Indian National Congress and served as its President on three occasions, from 1886 to 1887, 1893 to 1894 and 1906 to 1907. Naoroji's early career included serving as the Diwan of Baroda in 1874. Subsequently, he moved to England, where he continued to advocate for Indian interests. In 1892 he was elected to the House of Commons as a Liberal Party Member of Parliament, representing Finsbury Central until 1895. He was the second person of Asian descent to become a British MP following David Ochterlony Dyce Sombre, who was an Anglo Indian MP.
Naoroji is particularly known for formulating the "drain theory", which argued that economic exploitation under British rule led to the transfer of wealth from India to Britain. He detailed these views in his 1901 publication Poverty and Un-British Rule in India, which contributed to emerging debates on colonial economics and political representation. His work was influential among early nationalists and reformers, and he remained a key figure in shaping early Indian political thought. Naoroji also took part in international socialist networks and was a member of the Second International, alongside figures such as Karl Kautsky and Georgi Plekhanov. While Naoroji himself maintained a moderate stance, his engagement with transnational political groups reflected his broader concern with issues of labour, empire and global inequality.
In later years Naoroji received posthumous recognition in both India and the United Kingdom. In 2014, the British government introduced the Dadabhai Naoroji Awards, launched by then-Deputy Prime Minister Nick Clegg, to honour contributions to UK–India relations. India Post commemorated him with postal stamps issued in 1963, 1997 and 2017. His legacy continues to be studied in the context of Indian nationalism, colonial critique and the early history of Asian participation in British politics.
Naoroji was born in Navsari in a Gujarati-speaking Parsi Zoroastrian family, and educated at the Elphinstone Institute School. His patron was the Maharaja of Baroda, Sayajirao Gaekwad III, and he started his career as Dewan (Minister) to the Maharaja in 1874. Being an Athornan (ordained priest), Naoroji founded the Rahnumai Mazdayasan Sabha (Guides on the Mazdayasne Path) on 1 August 1851 to restore the Zoroastrian religion to its original purity and simplicity. In 1854, he also founded a Gujarati fortnightly publication, the Rast Goftar (The Truth Teller), to clarify Zoroastrian concepts and promote Parsi social reforms.
Around this time, he also published another newspaper called The Voice of India. In December 1855, he was appointed Professor of Mathematics and Natural Philosophy in Elphinstone College in Bombay, becoming the first Indian to hold such an academic position. He travelled to London in 1855 to become a partner in Cama & Co, opening a Liverpool location for the first Indian company to be established in Britain. Within three years, he had resigned on ethical grounds. In 1859, he established his own cotton trading company, Dadabhai Naoroji & Co. In 1861, he also founded the Zoroastrian Trust Funds of Europe alongside Muncherjee Hormusji Cama.
In 1865, Naoroji directed and launched the London Indian Society, the purpose of which was to discuss Indian political, social and literary subjects. In 1867, he also helped to establish the East India Association, one of the predecessor organisations of the Indian National Congress with the aim of putting across the Indian point of view before the British public. The Association was instrumental in counter-acting the propaganda by the Ethnological Society of London which, in its session in 1866, had tried to prove the inferiority of the Asians to the Europeans. This Association soon won the support of eminent Englishmen and was able to exercise considerable influence in the British parliament. The organisation soon had branches in Mumbai, Kolkata and Chennai.
In 1874, he became Prime Minister of Baroda and was a member of the Legislative Council of Bombay (1885–88). He was also a member of the Indian National Association founded by Sir Surendranath Banerjea from Calcutta a few years before the founding of the Indian National Congress in Bombay, with the same objectives and practices. The two groups later merged into the INC, and Naoroji was elected President of the Congress in 1886. Naoroji published Poverty and Un-British Rule in India in 1901.
Naoroji moved to Britain once again and continued his political involvement. Elected for the Liberal Party in Finsbury Central at the 1892 general election, he was the first British Indian MP. He refused to take the oath on the Bible, as he was Zoroastrian. He was allowed to take the oath of office in the name of God on his copy of the Khordeh Avesta. During his time he put his efforts towards improving the situation in India. He had a very clear vision and was an effective communicator. He set forth his views about the situation in India over the course of the history of the governance of the country and the way in which the colonial rulers rule. In Parliament, he spoke on Irish Home Rule and the condition of the Indian people. He was a notable Freemason.
In 1906, Naoroji was again elected president of the Indian National Congress. He was a staunch moderate within the Congress, during the phase when opinion in the party was split between the moderates and extremists. Such was the respect commanded by him that assertive nationalists could not oppose his candidature and the rift was avoided for the time being. Naoroji's Poverty and Un-British Rule in India influenced Mahatma Gandhi.
Lord Salisbury's controversial remarks
Lord Salisbury, the then-Prime Minister, caused controversy in 1888 after Gainsford Bruce had won the Holborn by-election for the Unionists, beating the Liberal Lord Compton. Bruce had won the seat with a smaller majority than Francis Duncan had for the Unionists in 1885. Salisbury explained this by saying in a speech in Edinburgh on 30 November: "But then Colonel Duncan was opposed to a black man, and, however great the progress of mankind has been, and however far we have advanced in overcoming prejudices, I doubt if we have yet got to the point where a British constituency will elect a black man to represent them.... I am speaking roughly and using language in its colloquial sense, because I imagine the colour is not exactly black, but at all events, he was a man of another race."
The "black man" was, in fact, Dadabhai Naoroji. Salisbury's comments were criticised by the Queen and by Liberals who believed that Salisbury had suggested that only white Britons could represent a British constituency. Three weeks later, Salisbury delivered a speech at Scarborough, where he denied that "the word "black" necessarily implies any contemptuous denunciation: "Such a doctrine seems to be a scathing insult to a very large proportion of the human race... The people whom we have been fighting at Suakin, and whom we have happily conquered, are among the finest tribes in the world, and many of them are as black as my hat". Furthermore, "such candidatures are incongruous and unwise. The British House of Commons, with its traditions... is a machine too peculiar and too delicate to be managed by any but those who have been born within these isles". In 1888, the New York Times published an article that was extremely critical of Lord Salisbury's remark. It included the following quotation, "Of course the parsees are not black men, but the purest Aryan type in existence, with an average complexion fairer than Lord Salisbury's; but even if they were ebony hued it would be grotesque and foolish for a Prime Minister of England to insult them in such a wanton fashion as this." Naoroji was later elected for Finsbury in 1892 and Salisbury invited him to become a Governor of the Imperial Institute, which he accepted.