The new economic structure brought by the British in the eighteenth century was a form of “plunder” and a catastrophe for the traditional economy of Mughal India.
The British were guilty of depleting the food and money stocks and of imposing high taxes that resulted in the terrible famine of 1770, which killed a third of the people of Bengal.
The British argue that their takeover did not make any sharp break with the past, which largely delegated control to regional Mughal rulers and sustained a generally prosperous economy for the rest of the 18th century. But the reality is that the British seized power by brute force and impoverished all of India.
The mantra of the British at that time was “Take what you can, when you can”, because history proves that a prolonged sustainable colonization of a nation is unfeasible at best.
Hence, the British exploited India’s natural resources to the maximum of their abilities, leaving the Indians to salvage what they could when they left.
The Mughal Empire was in a state of collapse by the 1720s. Other European powers were competing for control in India, and sought alliances with the shaky states that inherited the Mogul territories. The East India Company established its own army in India, which was composed of British troops as well as native soldiers called sepoys.
British interests in India, under the leadership of Robert Clive, gained military victories from the 1740s onward, and with the Battle of Plassey in 1757 were able to establish dominance. The East India Company gradually strengthened its hold, even instituting a court system. British citizens began building an “Anglo-Indian” society within India, and English customs were adapted to the climate of India.
Indian agriculture remained completely traditional and primitive during the British rule. Farm technology followed during those days was simple and no transformation was adopted into it. There was an increasing pressure on the agricultural sector as there was a decline of urban handicrafts in India. This resulted in the sudden swelling in the number of agriculturists leading to a continuous sub-divisions and fragmentation of agricultural land.
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, were consisting of pulses of different types, oil seeds, jute, cotton, indigo and spices. These crops were produced in the country with the use of simple tools like wooden ploughs, sickles and spades, supported by animal power. The rotations of crops were followed to regain fertility. Farmers were using only natural manures. Storage and marketing facilities were totally inadequate.
Period of Industrialist Capital
Towards the end of the 18th century and thereafter, there was a rapid decline of most of the handicrafts industries. These 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 were also responsible for the decline of Indian industries.
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 laborers 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.
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 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.
The major difference between the British colonists in India and earlier invaders was that none of the earlier invaders made any structural changes in Indian economy or drained away India’s wealth as tribute. The British rule in India caused a transformation of India’s economy into a colonial economy, i.e., the structure and operation of Indian economy were determined by the interests of the British economy.
Cheap and machine-made imports flooded Indian markets after the Charter Act of 1813 allowing one-way free trade for the British citizens. On the other hand, Indian products found it more and more difficult to penetrate the European markets.
After 1820, European markets were virtually closed to Indian exports. The newly introduced rail network helped the European products to reach the remotest corners of the country.
The loss of traditional livelihood was not accompanied by a process of industrialisation in India, as had happened in other rapidly industrialising countries of the time. This resulted in deindustrialisation of India at a time when Europe was witnessing a re-intensified Industrial Revolution. This happened at a time when Indian artisans and handicraftsmen were already feeling the crunch due to loss of patronage by princes and the nobility, who were now under the influence of new western tastes and values.
This resulted in increased pressure on land. An overburdened agriculture sector was a major cause of poverty during British rule and this upset the village economic set-up. From being a net exporter, India became a net importer.