Indian agriculture remained completely traditional and

primitive during the British rule from 1757 to 1947. Farm

technology followed during those days was simple and no
transformation was adopted into it. There was an increasing
pressure on agricultural sector as there was a decline of urban
handicrafts in India.
This has resulted sudden swelling in the number of
agriculturists leading to a continuous sub-divisions and
fragmentation of agricultural land.
This has resulted the problem of uneconomic holding and unproductive agriculture in the
country. Thus agriculture remained merely a means of subsistence for most of the farmers. In the
second half of 19th century, famines deteriorated the conditions of agriculture further. The
British rulers took no sufficient steps to develop irrigation facilities.

Till the 19th century, there was a little change in the agricultural practices adopted in India.
Throughout the past centuries, Indian farmers were growing the same crops. Rice and Wheat
were the two principal crops in India followed by jawar and barley. Other crops, produced in
India from the very beginning, were consisting of pulses of different types, oil seeds, jute, cotton,
indigo and spices.

All these crops were produced in the country with the use of simple implements and tools like
light wooden plough, sickle and spade, supported by animal power. Open field type of
cultivation with no enclosures was practised in India. The rotations of crops of traditional type
were followed to regain fertility. Farmers were using only natural manures. Storage and
marketing facilities were totally inadequate.

Commercialisation of Agriculture:
Towards the end of the 18th century, the East India Company realised the export potentialities of
some of the Indian agricultural commodities like indigo, jute, cotton and oilseeds. This was
mostly resulted from growing demand for agricultural raw materials like jute and raw cotton
arising out of Industrial revolution in England and imposition of restrictions on the export of
manufactured and finished goods from India.

All these had resulted commercialisation of Indian agriculture.

The commercialisation of agriculture simply indicates the process of production of some crops
for selling it in the market for deriving cash rather than for subsistence or family use.
Development of roads and railways after 1850 had boosted the process of commercialisation of
Indian agriculture.

Major effects of commercialisation of Indian agriculture include:

(a) Increase in the production of cash crops like cotton, jute, oilseeds, sugar cane, tobacco etc. by
substituting foodgrains and their growing localisation into certain areas;

(b) Widening of markets for Indian cash crops,

(c) Rise in the income of a section of agriculturists producing cash crops;

(d) Introduction and growth of new crops like, tea, coffee, groundnut, potato, fruits, different
types of oilseeds etc. and

(e) Disappearance of village self-sufficiency.

Indian Economy: Condition # 2. Industry:

The process of industrialisation in India during British period must be traced back from 1750
onwards. India was quite well known for her industrial products. The industry which was very
much famous in India during those days was the urban handicraft industry. Again the most
important urban handicraft industry in India during those days was the textile industry.

The well known products produced by this textile industry include cotton textile. Dacca muslin,
dhotis and dopattas of Ahmedabad, Chintzes of Lucknow, sarees of Madurai etc. These products
were quite famous throughout the country and also outside the country. Moreover, silk fabric
produced in Bengal, Poona, Ahmedabad etc. was also quite famous.

The woollen articles viz., Kashmiri shawls produced in Kashmir and in some parts of Punjab
were also quite famous within the country and also in Europe. Again a good number of metal
industries flourished in India which includes brass, copper and bell-metal industries established
in Banaras, Nasik, Poona, Hyderabad, Tanjore, Vishakhapattnam etc.

Besides these industries, other industries which were existing in India at the time of arrival of
East India Company included stone carving, gold and silver thread work, enamelled jewellery,
sandal wood work, marble work, glass bangles making, tanning and leather works, melting and
forging of iron, ship building etc.

Towards the end of the 18th century and thereafter, there was a rapid decline of most of the
aforesaid handicrafts industries. These was mostly resulted from increasing competition faced by
Indian handicrafts industries with the factory-made goods produced in England after the
Industrial Revolution started in England after 1750 and especially in the first half of 19th
century.

The policy followed by the British in respect of its industries and trade are also responsible for
the decline of Indian industries.

The British industrialists took interests only in those industries which they failed to set up
elsewhere for geographical reasons. These industries include jute and plantation. British
capitalist established jute mills in Bengal and also started tea, coffee and indigo plantation which
made it possible to exploit Indian labourers extensively.

In this way, India was forcibly transformed from a country of combined agriculture and
manufacture into an agricultural colony of British manufacturing capitalism. Therefore, Indian
industries were more or less destroyed gradually making way for growing market for British
manufacturers.

Thus during the period of industrial capital the industrial revolution in Britain had gathered its
momentum through the utilisation of its mercantile capital and then started to exploit the Indian
economy in a different manner.

During those days, the main motive of the British regime was to transform the Indian economy
as a primary producing country, concentrating on the production of raw materials and to create a
potential market in India for the sale of their industrial finished goods.

Thus the strategy of free trade followed by the British had ruined the age old Indian textile
industry as this industry could not stand in the competition with the machine made textile
produced by the British. Moreover, British capitalists gradually developed tea, jute, and coffee
industry in India due to geographical reasons and finally exploited Indian labourers extensively.

In this way, British industrial capital had accelerated the process of economic drain from India
alongwith the degree of exploitation and then set imbalances in Indian economy.
Indian Economy: Condition # 4. Foreign Trade:
During the pre-British period, India was quite self-sufficient in foodstuffs and maintained a
favourable balance of trade. But the composition, volume and direction of foreign trade have
undergone a significant change during the British period. During the early part of British period,
India experienced a little change in the composition of its foreign trade.

At the beginning of 18th century, exports from India were mostly consisting of cotton and silk
manufactures, indigo, spices and sugar and its imports were consisting of gold and silver,
woollen goods and miscellaneous types of novelties.

After the Industrial Revolution in England since 1750, factory industries started to produce
various commodities on a large scale and thereby replaced the old small scale handicrafts.
Thereafter, England wanted to establish market for their manufactured goods in Indit6a and also
wanted that India should supply different types of raw materials to the newly developed
industries in England.

Thus England wanted to adopt a colonial pattern of foreign trade in India. Accordingly, during
the first half of the 19th century India experienced fundamental changes in the composition of its
exports and imports. India started to export more of primary products like food-grains and raw
materials, viz., raw cotton and jute, hides and skins, dyes and oilseeds.

On the other hand, India started to import manufactured goods mostly from England. Among
these manufactured goods cotton piece goods from Lancashire constituted about half of the total
imports by the middle of 19th century. Import of other factory products with high quality at
cheaper price had also led to decay of Indian handicrafts and cottage industries.

During the second half of 19th century and possibly with the introduction and development of
railways, development of roads, introduction of steam-ships, construction of ports and telegraphs
and finally with the opening of Suez Canal in 1869, India had to experience fundamental changes
in the volume and composition of its foreign trade.

In the beginning of 20th century, India along with other countries had registered a considerable
increase in its foreign trade. This is mostly resulted from increase in the production of gold and
consequent rise in prices of all different types of goods.

After the First World War, the volume of India’s trade declined to nearly half of the previous
total and imports declined more steeply than its exports. During the Second World War (1938-
45), India again experienced considerable dislocation in the normal channels of its foreign trade
leading to a change in the composition and direction of its trade.

Again during the Post-War Years (1945-51), foreign trade of India rose steeply but the imports
of the country rose much more steeply than exports.

This is mostly due to imports of foodgrains, raw jute and raw cotton necessitated by the loss of
areas to Pakistan because of partition and increasing volume of imports of capital equipment’s,
spares and industrial raw materials to replace old machines and to speed up economic
development of the country.

But exports from India could not rise as fast due to scarcity of goods, increasing domestic
demand and rising prices of Indian goods.

During the major part of the British period excess of exports over imports had resulted in a
favourable balance of trade. This excess of India’s exports over her imports did not result any
flow of gold and silver to India in return.

Rather it was meant to make payment for invisible imports like services of British army, of civil
officials, of shipping and insurance companies, interest on debt raised in England etc., which
were termed as “Home Charges”. Indian National leaders termed it as “Drain” of resources
which amounted to Rs 40 crore per annum.
Moreover, the direction of India’s foreign trade had also experienced a substantial change during
the entire British period. At the dawn of British period (i.e., 1818 onwards) India’s foreign trade
was mostly connected with Great Britain.

During 1850s, about 75 per cent of India’s imports and exports was related to United Kingdom.,
But with the growing industrialisation of U.S.A., Germany and Japan, India started to establish
its exports and imports contracts with other European countries and Japan.

Accordingly, regarding India’s imports, the shares of different countries at the end of 19th
century were as follows: UK (69 per cent), Germany (2.4 per cent), U.S.A. (2.6 per cent) and
Japan (2.6 per cent). But at the beginning of the 20th century, the shares of different countries in
India’s imports were as follows: U.K. (27 per cent), U.S.A. (7 per cent), Far East (24 per cent)
and remaining countries (15 per cent).
Again the share of U.K. in India’s imports declined from 31 per cent in 1938-39 to about 25 per
cent in 1945-46 and then to 21 per cent in 1950- 51. Similarly, the share of U.K. in India’s
exports which was 24 per cent in 1913-14, gradually increased to 34.0 per cent in 1938-39 and
then gradually declined to 28 per cent in 1945-46 and then to 22 per cent in 1950-51.

Again the share of U.S.A. in India’s import trade gradually increased from 7 per cent in 1938-39
to 21 per cent in 1950-51.