The opening of the Suez Canal in 1869, which shortened the journey from London to Bombay by , created a surge in trade between Europe and India. As a result, BI's Calcutta agents, Mackinnon Mackenzie & Co., asked their London based counterpart, Gray, Dawes & Co., for a new shipping assistant to handle the increased workload. Mackay got the job despite being the third choice, arriving in India in 1874. With the development of inland transport throughout the sub-continent, export opportunities in indigo, coal, tea, jute and wrought iron abounded and saw Mackinnon Mackenzie & Co. enjoy a steady increase in business. The collapse of the City of Glasgow Bank in October 1878 proved a disaster for BI's Bombay agents, Nichol and Co., but allowed Mackay to establish a new branch of Mackinnon Mackenzie & Co. in the city. At the age of 26 he became a partner in the Bombay firm and received a 10% share of the profits, increasing to 15% by 1884. As Mackay later recalled:"Life in Bombay was extremely agreeable. I was elected a member of the Royal Bombay Yacht Club. I built a small yacht, which I named the Pinafore and had many delightful cruises in Bombay harbour. I became a member of the Bombay Hunt ... we had glorious hunts every Sunday in the cold weather, a pack of hounds being brought out every season from home, together with a huntsman. I had a bungalow out at Bandra and here I used to go for the week-ends all year round."
