Q.Explain how the trade and industrial policies followed during the colonial period changed India's position in world commerce, from an exporter of finished goods to a supplier of raw materials, and describe the impact on traditional Indian industries.

Once the English East India Company gained political control, discriminatory tariffs favoured British manufactured goods over Indian ones, revenue was used to fund exports to Britain, and infrastructure moved raw materials out — together converting India from an exporter of fine finished goods into a raw-material supplier, and severely damaging traditional industries like handloom weaving.

Before European colonial dominance, the Indian subcontinent had a long-standing reputation as an exporter of high-value finished goods — most notably fine cotton and silk textiles, along with other crafted goods — sought after across Asia, Africa, and Europe. The arrival and eventual political dominance of European trading companies, especially the English East India Company from the mid-eighteenth century onward, reversed this position over roughly two centuries, through several connected mechanisms.

First, once the Company gained direct political control (beginning with Bengal after the Battle of Plassey in 1757), it could shape tariff policy in Britain's favour rather than compete as an ordinary trader. As Britain's own Industrial Revolution made machine-made textiles far cheaper to produce, colonial policy imposed little or no protective duty on British goods entering India, while placing heavy duties on Indian handicrafts exported to Britain — a deliberately one-sided arrangement that Indian producers had no comparable power to resist.

Second, revenue collected from Indian territories under Company (and later Crown) administration was itself used to fund the purchase of Indian goods for resale in Europe — a pattern later termed the 'drain of wealth' by Indian economic historians, since India effectively paid, through its own tax revenue, for the very trade that enriched Britain rather than India.

Third, infrastructure investment during this period, including the railway network built across India, was designed chiefly to serve this trade pattern — moving raw materials efficiently from the interior to coastal ports for export, and distributing British manufactured goods inward from those same ports — rather than to support balanced, diversified Indian industrial development. …

A common gap is describing only the arrival of European companies without explaining the actual MECHANISM (tariff policy, revenue extraction, infrastructure design) by which India's trading position changed — the ques …