British Economic Policy in India - Appsc G1 G2

Phases of Economic Policy in India

1600-1757: The East India Company was a purely trading company dealing with import of goods and precious metals into

India and export of spices and textiles.

1757 - 1813 (The Mercantilist Phase)

 The East India Company monopolized trade and began direct plunder of India's wealth.

 They could impose their own prices that had no relation to the costs of production. This was the phase

of buccaneering capitalism whereby wealth flowed out of the barrel of the trader's guns.

 The company used its political power to monopolize trade & dictate terms to the weavers of Bengal

 The company used revenue of Bengal to finance exports oi Indian goods.

 

1813-1858 (The Industrial Phase)

The commercial policy of the East India Company after 1813 was guided

by the needs of the British industry

 The British mercantile industrial capitalist class exploited India as Industrial Revolution in Britain completely

transformed Britain's economy

 Charter Act of 1813 allowed one way free trade for British citizens resulting in Indian markets flooded

with cheap & machine made imports. Indians lost not only their foreign markets hut their markets in India too.

 India was now forced to export raw materials consisting of raw cotton jute and silk, oilseeds, wheal, indigo and

lea, and import finished products.

 Indian products had to compete with British products with heavy import duties on entry into Britain.

 

1860 & After (Finance Colonialism): The essence of 19th century colonialism lay in the transformation of India into a supplier of

foodstuffs and raw materials to the metropolis, a market for metropolitan manufactures and a field for investment of British capital.

 Started with the emergence of the phase of Finance Capitalism m Britain. The rebellion of KS57 was the

key factor in the change of the nature of the colonialism.

 The British introduced roads and railways, post and telegraph, banking and other services

under the 'guaranteed interests' schemes (government paid a minimum dividend even if profits

were nonexistent). Various investments by the British capitalists were also made in India.

 As a result of this, the burden of British public debts kept on increasing and India became, in

the real sense, a colony of Britain.