The General Character of the Colonial Economy

Before British rule, India was known internationally for its manufactured goods, especially fine cotton and silk textiles, which were exported to many parts of the world. Under British colonial administration, this position was steadily reversed. Colonial economic policy was designed, consciously and deliberately, to serve the interests of British industry and trade — not to develop India as an independent economic power.

The basic pattern that economists use to describe this relationship is that of a feeder economy (sometimes called a 'colonial' or 'subsidiary' economy): India's role was to feed raw materials — raw cotton, jute, indigo, oilseeds, and various minerals — to factories in Britain, and then to serve as a captive market for the finished manufactured goods, such as machine-made cotton cloth, that those factories produced. This two-way relationship benefited British industry twice over: once by securing cheap raw material, and again by securing a large, more or less guaranteed market to sell into. …