Industrial Sector on the Eve of Independence Prior to British rule, India was an independent economy, and its major source of income was agriculture. Besides, India was also recognized for its manufacturing industries, especially handicraft industries, metals and precious stonework, cotton textiles, silk textiles, etc. The manufacturing industries of these goods enjoyed a global market as Indian industries used to import excellent quality materials and high standards of craftsmanship to the other countries of the world. Industrial Sector As in the case of agriculture, in manufacturing also, India was unable to develop a preferable industrial base under colonial rule. Even though India was widely known for its handicraft industries, they still declined and no modern industrial base was allowed to come and enjoy the status that the former industries enjoyed for a long period of time. The main aim was to limit India to an exporter of important raw materials for the British Industries and to transform India into a market for the finished products so that their continuous growth could be assured for the benefit of their home country, Britain. In the current economy, the decline of the handicraft industries created huge unemployment in India and new demand in the Indian consumer market, which was denied supply of locally made goods. State of Industrial Sector on the Eve of Independence 1. Downfall of the Handicraft Industry Before British rule, India’s handicraft Industry was popular and enjoyed a global market because of the better quality goods produced in these industries. However, during British rule, the Britishers misruled here, and forced the industrialists to reduce the production of handicrafts in India. In other words, the British policies de-industrialized India systematically. The basic aim of Britishers for the de-industrialization of the Indian Industrial Sector was two-fold. Firstly, the Britishers wanted to get cheap rate raw materials from India so that the Indian Industries, instead of providing finished products can become a mere exporters of the raw materials to the British Industries. Secondly, the Britishers wanted to sell the goods manufactured in their home country to the Indians at a high price. In this way, the Britishers exploited the Indian Industrialists from two sides, which resulted in the huge decline in the traditional handicraft industry of India. The Britishers also exploited the Indian Industry by implementing a discriminatory tariff policy. Under this policy, the British rulers allowed the Industrialists to export raw materials from India for free and import British final goods to India for free. However, they imposed a heavy duty on the export of handicrafts from India. 2. Limited Growth of Public Sector Enterprises The growth of public sector enterprises during the British rule was limited to some selective sectors, including Port Trust, Power, Railways, Post and Telegraph, etc. 3. Lopsided Industrial Structure The growth of the Industrial Sector during British rule was lopsided and unbalanced. It is because of two main reasons: lack of encouragement by Britishers for the growth of heavy industries in India, and lack of permission of Industry modernization to the Indian Industrialists. However, during the second half of the 19th century, India saw a slow establishment of modern industries, which were majorly confined to jute mills and cotton textiles. The jute mills were majorly established in Bengal by British capitalists. However, the cotton textile mills were established in the western parts of India, Gujarat, and Maharashtra. The first iron and steel industry in India was TISCO (Tata Iron and Steel Company), set up by Jamshedji Tata, in August 1907 in Jamshedpur, Bihar. The production of steel in TISCO began in 1912. Besides, other industries like cement, sugar, paper and chemical also started after the Second World War. 4. Lack of Capital goods Industries During British rule, the Britishers always wanted to implement those policies which can develop those Indian Industries that would never give competition to the British Industries In other words, the Britishers aimed at making Indians dependent on them for the supply of heavy equipment and capital goods. Therefore, they did not pay any attention to the promotion or development of the capital goods industries of India and focused on the development of some consumer goods. These policies and attempts of British rulers led to an unbalanced growth of Indian Industries. Reasons behind Decline in Handicrafts 1. Discriminatory Tariff Policy When Britishers were ruling in India, Britain was experiencing an industrial revolution for which they needed raw materials to expand their industry and market their finished goods. They thought of India as the perfect source of raw materials and a perfect place to sell their industrial products. For the fulfillment of these two thoughts, the British rulers implemented a discriminatory tariff policy in India. The policy allowed tariff-free import of British industrial products in India and tariff-free export of raw materials from India. Besides. to reduce the growth of the handicraft industry, the Britishers imposed a heavy duty on the export of handicrafts manufactured in India. These policies resulted in a huge growth or penetration in British products and a huge decline in the market of handicraft products not just in the domestic market, but also in the foreign market. 2. Disappearance of Princely Courts Before British rule, India was ruled by princes, nawabs, rajas and emperors. In order to gain a good reputation in the international market, these rulers used to encourage and patronize handicrafts. However, during British rule, the rulers started to end the princely courts and discourages the production of handicrafts in Indian market, which resulted in the decay of the handicraft industry in India. 3. Competition from Machine- made Products British Industries used to provide low-cost machine-made products in the market, which gave stiff competition to the handicrafts industry of India. Besides, the quality and precision of the machine-made products were far better than the handicraft products manufactured in India. The stiff competition faced by Indian Industry and its craftsmen forced them to shut down their business permanently. 4. New Patterns of Demand At the time of British rule, the impact of their culture was high, which resulted in the emergence of a new class in India. This class was keen to adopt the British culture and western lifestyle. People’s desire to adopt a western lifestyle gave rise to a new pattern of demand in Indian market, as people started going against the Indian products and favouring British goods. This change in the demand for goods resulted in the decline of Indian Industry. 5. Introduction of Railways in India For their benefit and interest, the British Government introduced railways in India. The major aim behind the introduction of railways was the facilitation of transportation of British goods to the different parts of the country. The ease in the transportation of goods across the country resulted in the expansion of low-cost British goods’ market size in India. However, the market for high-cost Indian products started declining, which ultimately, resulted in the decaying of the handicraft industry.
