Industrial Sector

As in agriculture, India was not allowed to build a sound industrial base under colonial rule. The country's world-famous handicraft industries declined, and no modern industry was permitted to rise and take their place.

The two-fold motive behind de-industrialisation

The colonial government deliberately de-industrialised India for two connected reasons:

• First, to reduce India to a mere exporter of the raw materials needed by Britain's modern industries.
• Second, to turn India into a large market for the finished products of those same British industries, so their expansion could continue to Britain's maximum advantage.

The consequences of decline

• The collapse of indigenous handicrafts caused massive unemployment.
• It also created fresh demand in the Indian market, now deprived of locally made goods — a demand profitably filled by cheap manufactured imports from Britain.

The slow rise of modern industry

• Modern industry began to take root only in the second half of the nineteenth century, and even then it grew very slowly.
• It began with cotton and jute textile mills. Cotton mills, largely owned by Indians, were set up in the west — Maharashtra and Gujarat. Jute mills, dominated by foreigners, were concentrated in Bengal.
• Iron and steel industries followed in the early twentieth century; the Tata Iron and Steel Company (TISCO) was incorporated in 1907.
• A few sugar, cement and paper industries appeared after the Second World War.

Key weaknesses of the new industry …