Further development was checked by the frequent invasions of India by, and the subsequent continuous rule of, foreigners of entirely different character and genius, who, not having any sympathy with the indigenous literature – on the contrary, having much fanatical antipathy to the religion of the Hindus – prevented its further growth. Priest-hood, first for power and afterwards from ignorance, completed the mischief, as has happened in all other countries.
Naoroji was born in Bombay in a Gujarati-speaking Parsi family, and educated at the Elphinstone Institute School. He was patronised by the Maharaja of Baroda, Sayajirao Gaekwad III, and started his public life as the Dewan (Minister) to the Maharaja in 1874. Being an Athornan (ordained priest), Naoroji founded the Rahnumae Mazdayasne 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 (or The Truth Teller), to clarify Zoroastrian concepts and promote Parsi social reforms. In 1855, he was appointed Professor of Mathematics and Natural Philosophy at the 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. Later, he became professor of Gujarati at University College London.
In 1865, Dadabhai Naoroji directed the launch the London Indian Society, the purpose of which was to discuss Indian political, social and literary subjects. In 1861 Naoroji founded The Zoroastrian Trust Funds of Europe alongside Muncherjee Hormusji Cama In 1867 Naoroji 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. In 1874, he became Prime Minister of Baroda and was a member of the Legislative Council of Mumbai (1885–88). He was also a member of the Indian National Association founded by Sir Surendranath Banerjee 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.
Here are the significant extracts taken from his speech delivered before the East India Association on 2 May 1867 regarding what educated Indians expect from their British rulers.
He was a member of the British House of Commons from 1892-1895. 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 history of the governance of the country and the way in which the colonial rulers rules.
Mahatma Gandhi wrote to Naoroji in a letter of 1894 that "The Indians look up to you as children to the father. Such is really the feeling here."
It was also important to examine British and Indian trade to prevent the end of budding industries due to unfair valuing of goods and services. By allowing industry to grow in India, tribute could be paid to Britain in the form of taxation and the increase in interest for British goods in India. Over time, Naoroji became more extreme in his comments as he began to lose patience with Britain. This was shown in his comments which became increasingly aggressive. Naoroji showed how the ideologies of Britain conflicted when asking them if they would allow French youth to occupy all the lucrative posts in England. He also brought up the way that Britain objected to the drain of wealth to the papacy during the 16th century. Naoroji's work on the drain theory was the main reason behind the creation of the Royal Commission on Indian Expenditure in 1896 in which he was also a member. This commission reviewed financial burdens on India and in some cases came to the conclusion that those burdens were misplaced.
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 not a Christian, but was allowed to take the oath of office in the name of God on his copy of Khordeh Avesta. In Parliament, he spoke on Irish Home Rule and the condition of the Indian people. He was also a notable Freemason. In his political campaign and duties as an MP, he was assisted by Muhammed Ali Jinnah, the Future Muslim nationalist and founder of Pakistan. In 1906, Naoroji was again elected President of the Indian National Congress. Naoroji was a staunch moderate within the Congress, during the phase when opinion in the party was split between the moderates and extremists. Naoroji was a mentor to Bal Gangadhar Tilak, Gopal Krishna Gokhale and Mohandas Karamchand Gandhi. He was married to Gulbai at the age of eleven. He died in Bombay on 30 June 1917, at the age of 91. Today the Dadabhai Naoroji Road, a heritage road of Mumbai, is named after him. Also, the Dadabhai Naoroji Road in Karachi, Pakistan is also named after him as well, as Naoroji Street in the Finsbury area of London. A prominent residential colony for central government servants in the south of Delhi is also named Naoroji Nagar. He had less hair because he had cancer. His granddaughters Perin and Khrushedben was also involved in the freedom struggle. In 1930, Khurshedben was arrested along with other Revolutionaries for attempting to hoist the Indian flag in a Government College in Ahmedabad.
Dadabhai Naoroji's work focused on the drain of wealth from India into England during colonial rule of British in India. One of the reasons that the Drain theory is attributed to Naoroji is his decision to estimate the net national profit of India, and by extension, the effect that colonisation has on the country. Through his work with economics, Naoroji sought to prove that Britannia was draining money out of India. Naoroji described 6 factors which resulted in the external drain. Firstly, India is governed by a foreign government. Secondly, India does not attract immigrants which bring labour and capital for economic growth. Thirdly, India pays for Britain's civil administrations and occupational army. Fourthly, India bears the burden of empire building in and out of its borders. Fifthly, opening the country to free trade was actually a way to exploit India by offering highly paid jobs to foreign personnel. Lastly, the principal income-earners would buy outside of India or leave with the money as they were mostly foreign personnel. In Naoroji's book 'Poverty' he estimated a 200–300 million pounds loss of India's revenue to Britain that is not returned. Naoroji described this as vampirism, with money being a metaphor for blood, which humanised India and attempted to show Britain's actions as monstrous in an attempt to garner sympathy for the nationalist movement.
In 2014, Deputy Prime Minister Nick Clegg inaugurated the Dadabhai Naoroji Awards for services to UK-India relations.