Table of Contents

Impact of Colonial Rule on Indian Economy

Table of Contents

Theoretical overview

The British ruled over the Indian territory for almost 200 years which had a long-lasting effect on the Indian economy. The English East India company’s victory at the battle of Plassey in 1757 marked the beginning of nearly two centuries of British expansionism in India. The company’s victory over Siraj-ud-daula, the last nawab of Bengal gave the company control of Bengal’s textile trade and set the stage for its eventual conquest of the entire subcontinent. Many scholars argue that the company’s primary goal was to extract as much wealth as possible from India and that it did so through a variety of exploitative means.

Economic impact of colonization in India 

Exploitation and drain of resources – the British viewed India primarily as a supplier of raw materials and a market for British manufactured goods. This mindset led to the systematic exploitation of India’s resources including agriculture products, minerals and textiles for the benefits of British interest. The economic policies pursued by the colonial administration felicitated the draining of wealth from India to Britain resulting in widespread economic stagnation and impoverishment. 

Destruction of traditional industries – the policies of British severely affected traditional Indian industries such as textiles and handicrafts. The imposition of heavy tariffs and the influx of machine-made textiles from Britain resulted into the decline and collapse of many indigenous industries.

Land revenue systems and agrarian crisis – the British introduced a land revenue system that prioritize revenue collection over the welfare of the Indian farmers through measures like the permanent settlement and the zamindari system. They established exploitative land tenures, imposed highland taxes and concentrated land ownership in the hands of a few land lords.

Infrastructure development – while the British did invest in certain infrastructural projects like railways, telegraph lines and ports, these developments primarily served the colonial administration and British commercial interest.

Financial exploitation – the British exploited India financially through policies like the Bengal famine of 1770, where grain exports continued during a severe famine.

Social and cultural impact of colonization in India

  • The British declared sati or the self-immolation of a widow on her dead husband pyre as unlawful and punishable by law. Also, female infanticide was outlawed.
  • The British also bought the ideas like Liberty, equality, freedom and human rights which will be ensured to the citizens.
  • The British also attempted to focus on the conditions of women in society and introduced various legal measures to uplift their position.

It is important to recognize that the impact of colonial rule varied across regions with some areas experiencing more severe consequences than other. While colonial rule did bring certain elements of modernization and infrastructure development, the negative effect on the Indian society such as exploitation, agrarian crisis and resource drain were substantial. These consequences continue to shape India’s economic challenges and development trajectory to this day

Points to remember

  • The English East India company’s victory at the battle of Plassey in 1757 marked the beginning of nearly two centuries of British expansionism in India. The company’s victory over Siraj-ud-daula, the last nawab of Bengal
  • the British viewed India primarily as a supplier of raw materials and a market for British manufactured goods. This mindset led to the systematic exploitation of India’s resources including agriculture products, minerals and textiles for the benefits of British interest
  • the policies of British severely affected traditional Indian industries such as textiles and handicrafts. The imposition of heavy tariffs and the influx of machine-made textiles from Britain resulted into the decline and collapse of many indigenous industries.
  • the British introduced a land revenue system that prioritize revenue collection over the welfare of the Indian farmers through measures like the permanent settlement and the zamindari system
  • The British declared sati or the self-immolation of a widow on her dead husband pyre as unlawful and punishable by law. Also, female infanticide was outlawed.
  • The British also attempted to focus on the conditions of women in society and introduced various legal measures to uplift their position.

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