Summary
Highlights
In 1700, India accounted for 27% of the world's economy, surpassing all of Europe. By 1947, this share had plummeted to less than 3%, leaving its people impoverished. This dramatic decline is attributed to the British colonial rule, which exploited India as an 'inexhaustible gold mine,' leading to the demolition of native institutions, de-industrialization, severed trade networks, and increased societal divisions.
Before British colonialism, India was a dominant manufacturing economy, excelling in textiles, shipbuilding, and metalworking. Indian textiles held a 25% share of the global trade, and its ships were renowned for their durability, lasting over 20 years compared to English ships' 12. India was also a pioneer in the global steel industry, exporting high-quality Wootz (Damascus) steel.
The British systematically dismantled India's native industries to serve their own economic interests. They established a legal monopoly over Indian textiles, cut off export markets, and paid for goods with extracted tax revenues instead of foreign currency. British manufacturers lobbied to eliminate Indian competition, leading to the destruction of looms and the imposition of an 80% tariff, making Indian exports economically unviable.
India was reduced to being a mere exporter of raw materials like cotton and metal ore, while the British sold finished products back to Indians at a premium. This de-industrialization drove skilled Indian artisans, merchants, and builders into agriculture, leading to rural overpopulation, cratered wages, and widespread poverty.
The British implemented extreme taxes on Indian cultivators, often 50-80% of gross income, calculated before the harvest. These taxes were three times higher than under previous Indian rulers. Tax defaulters faced physical torture, and their farmlands were confiscated, creating millions of landless peasants for the first time in Indian history. By the end of the 19th century, India was Britain's largest source of revenue.
Unlike previous invaders who adopted India as their home, the British viewed India as eternally foreign, justifying its treatment as an 'extractive colony.' Modern economists estimate that the British extracted approximately 43 trillion dollars from India, money that was repatriated to Britain instead of being reinvested in India, leading to an 'absolute loss and extinction' of wealth.
While often cited as a benefit, the Indian railways served as evidence of British exploitation. Construction was highly inefficient and expensive, with British manufacturers producing all components, preventing Indian competition. The primary purpose of the railways was to facilitate the exploitation and export of India's natural resources, which exacerbated famines.
The British deliberately mass-exported Indian foodstuffs, even during droughts, making food too expensive for peasants. This led to an estimated 35 million preventable deaths due to famines, a number greater than those killed under Stalin or Mao, and five times the Holocaust. The British government implemented a policy of 'famine non-intervention' and actively suppressed efforts to aid famine victims, highlighting their disregard for Indian lives. In contrast, independent India has not experienced a single large-scale famine in over 70 years.