Emergence of Modern Industry in British India: Exploring the Causes of its Stunted Growth



Give a detailed account of the Rise of Modern Industry in India during the British Rule. What were the causes of its slow and unbalanced growth?  (HPAS Mains Question Paper 2022 – GS 1, Q.26)

The rise of modern industry in India during British rule began in the late 18th century with the establishment of the British East India Company’s trading posts in India. The British government, through various policies and investments, encouraged the growth of modern industry in India.

Rise of modern industry in India during British rule:

1. Modern Machinery: In the late 18th century, the British brought sophisticated machinery to India. Cotton was the first to gain from this advancement. The British created textile factories in Bombay and Calcutta, which formed the backbones of India’s modern industrial growth.

2. Infrastructure Development: The British built infrastructure in India to aid in expanding industries. Construction of trains, roads, and canals accelerated and reduced the cost of commodities movement. In addition, the British created a telegraph network in India, which increased communication and allowed enterprises to run more effectively.

3. Land Revenue Policies: To stimulate commercial agriculture, the British implemented land revenue policies in India. They provided tax breaks to farmers who planted export products like cotton, indigo, and jute. These measures boosted commercial agriculture and supplied raw materials to the textile industry.

4. Capital Investments: The British spent money in India to help modern industries expand. To give loans to Indian businesses, the British built banks in India, such as the Bank of Bengal, Bank of Bombay, and Bank of Madras. They also promoted the formation of joint-stock corporations in India, allowing investors to combine their resources and participate in industry.

5. Protectionist Policies: To preserve British industry from competition, the British imposed protectionist regulations in India. They established hefty levies on imports, making foreign items more costly and encouraging local industry development.

6. Factory Acts: The British enacted Factory Acts in India to enhance factory working conditions. These Acts governed working hours, the employment of women and minors, and the safety of employees. The Acts improved factory worker conditions and helped to eliminate labour exploitation.

7. The Rise of Indian Entrepreneurs: The British rule also resulted in the rise of Indian entrepreneurs who founded their enterprises. The most prominent was Jamsetji Tata, who founded the Tata Group in 1868. The Tata Group grew to become one of India’s major industrial giants, and it played an essential part in developing modern industry in India.

Although British control was influential in the development of modern manufacturing in India, various issues contributed to delayed and imbalanced growth.

Following are some of the reasons behind India’s sluggish and imbalanced expansion of contemporary industry under British rule:

1. Restricted Technology Transfer: Initially, the British East India Company prohibited the transfer of superior technology to India, limiting the establishment of modern industry. They also opposed the growth of industries that might compete with the United Kingdom. Consequently, India has slowly embraced new technology that may have enhanced production and efficiency.

2. Land Revenue Policies: The British government’s land revenue policies also contributed to delayed and imbalanced development. Small farmers and landless workers were driven to work in factories for poor salaries due to these laws. This resulted in the concentration of wealth in the hands of a few, which stifled domestic market expansion and reduced demand for industrial products.

3. Investment was limited: Although the British did spend on infrastructure, they did not invest in the growth of the Indian industry. They concentrated on obtaining raw materials from India and exporting them to the United Kingdom. This stifled contemporary industry expansion and resulted in an imbalanced economy.

4. Unfair Trade Practices: The British placed levies on Indian products and barred Indian producers from exporting to the country. This resulted in a trading arrangement that favoured British industry over Indian manufacturers. This hampered the development of sophisticated sectors in India and led to the country’s sluggish and imbalanced economic progress.

5. Absence of Entrepreneurial Spirit: The British discouraged Indians from pursuing entrepreneurial and innovative endeavours. They did not encourage Indian entrepreneurs to invest in contemporary sectors, limiting local industry development. This resulted in the Indian economy’s dependence on foreign investments and a lack of self-sufficiency.

6. Colonial Policies’ Influence: British colonial policies had a considerable influence on the development of modern industry in India. Actions such as the Drain of Wealth, which included shifting Indian resources to the British, and the execution of the Deindustrialization strategy caused the Indian economy to stagnate.

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