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The Discovery of India - A Perspective of British Economics

Jawaharial Nehru

The Chief business of the East India Company in its early period, the very

object for which it was started, was to carry Indian manufactured goods—

textiles, etc., as well as spices and the like—from the East to Europe, where there was a great demand for these articles. With the developments in industrial techniques in England a new class of industrial capitalists rose there demanding a change in this policy. The British market was to be closed to Indian products and the Indian market opened to British manufactures. The British parliament, influenced by this new class, began to take a greater interest in India and the working of the East India Company. To begin with, Indian goods were excluded

from Britain by legislation, and as the company held a monopoly in the Indian export business, this exclusion influenced other foreign markets also. This was followed by vigorous attempts to restrict and crush Indian manufactures by various measures and internal duties which prevented the flow of Indian goods within the country itself. British goods meanwhile had free entry. The Indian textile industry collapsed, affecting vast numbers of weavers and artisans. The process was rapid in Bengal and Bihar; elsewhere it spread gradually with the expansion of British rule and the building of railways. It continued throughout the nineteenth century, breaking up other old industries also, shipbuilding, metalwork, glass, paper, and many crafts.

To some extent this was inevitable as the older manufacturing came into

conflict with the new industrial technique. But it was hastened by political and economic pressure, and no attempt was made to apply the new techniques to India. Indeed every attempt was made to prevent this happening, and thus the economic development of India was arrested [stopped] and the growth of the new industry prevented. Machinery could not be imported into India. A vacuum was created in India which could only be filled by British goods, and which also led to rapidly increasing unemployment and poverty. The classic type of modern colonial economy was built up, India becoming an agricultural colony of industrial England, supplying raw materials and providing markets for England’s industrial goods. . . .