Question – Critically examines the impact of British colonial rule on the Indian economy.

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Question – Critically examines the impact of British colonial rule on the Indian economy. – 19 April 

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The economic policies adopted by the British rapidly transformed India’s economy into a colonial economy, the nature and structure of which was determined by the needs of the British economy. In this regard, the British conquest of India was different from all previous foreign conquests.

Impact of British rule on Indian economy                           

Ø Deindustrialization led to the decline of Indian handicrafts.

Ø Increase in impoverishment of farmers.

Ø The ruination of the old zamindars and the rise of the new zamindari system.

Ø Stagnation and ruination of agriculture.

Ø Commercialization of the agriculture.

Ø Development of modern industries.

Ø The rise of the national bourgeoisie class.

Ø Economic drain.

Ø Famine and Poverty.

Nationalist criticism of the colonial economy

Ø Due to colonial exploitation, India is becoming poorer by the day.

Ø Poverty problem and increase in poverty.

Ø Industrialization in India was done with foreign interests. It should satisfy Indian interests.

Ø The policies of trade, finance, infrastructure development and expenditure of British rule are in line with imperialist interests.

Ø Demands were raised to stop Indian exploitation and develop India’s independent economy.

Ø The railways have been developed by the British for their commercial benefit and not for the development of India.


Thus, British colonial rule had a huge negative impact on the Indian economy, forcing people of all sections of society to think that all their economic hardships were the result of colonial rule. The colonial exploitation thwarted the capitalist transformation of the Indian economy.

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