Maarg Manthan · Topic 28.1

Deindustrialisation: Ruin of Artisans and Handicraftsmen

Modern History › Economic Impact of British Rule · Topic 28.1

British rule transformed India into a colonial economy, whose structure was set by British interests. After the Charter Act of 1813, cheap machine-made imports flooded India under one-way free trade, while tariffs of nearly 80 per cent shut out Indian textiles, and by 1820 European markets were virtually closed to them. Traditional livelihoods were lost without modern industrialisation, causing deindustrialisation and the decline of cities.

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Deindustrialisation: Ruin of Artisans and Handicraftsmen - Modern History - MaargX UPSC Maarg Manthan

At a Glance

  • Colonial economy Structure determined by British interests
  • Trigger Charter Act of 1813: one-way free trade
  • Tariffs Nearly 80 per cent on Indian textiles
  • Result India shifted from net exporter to net importer
  • Exam link UPSC Prelims, Modern History: Economic Impact of British Rule

Where Does It Fit?

This is the first topic of the category on the economic impact of British rule. The previous topic covered British policy towards princely states and foreign policy. This topic covers the deindustrialisation of India. The next topic covers one-way free trade and the tariff policy. Previous topic: British Policy Towards Princely States and Foreign Policy.

What Made British Rule an Economic Change?

The major difference between the British and earlier invaders was that none of the earlier invaders made structural changes in the Indian economy or drained India’s wealth away as tribute. British rule transformed India’s economy into a colonial economy, in which the structure and working of the economy were determined by the interests of the British economy. According to historians, at the beginning of the eighteenth century India had some 23 per cent of the world economy, a share that came down to about 3 per cent by independence. This is an estimate by historians and is debated.

How Did One-Way Free Trade Ruin Indian Handicrafts?

Cheap, machine-made imports flooded the Indian market after the Charter Act of 1813 allowed one-way free trade for British citizens. Indian products, on the other hand, found it more and more difficult to enter European markets. Tariffs of nearly 80 per cent were imposed on Indian textiles, so that Indian cloth could no longer be cheap. After 1820 European markets were virtually closed to Indian exports, while cheap British cloth flooded India, and the newly introduced railways took European products to the remotest corners. From being a net exporter, India became a net importer. The Act of 1813 is in Pitt’s India Act: Board of Control 1793 to…">Constitutional Development 1773-1858: Regulating Act to the Act of 1858.

Two views are recorded. William Bentinck wrote that the misery hardly found a parallel in the history of commerce, and that the bones of cotton weavers were bleaching the plains of north India. D.H. Buchanan wrote that the armour of the isolated, self-sufficient village was pierced by the steel rail, and its life blood ebbed away.

Why Did Industrialisation Not Follow?

The loss of traditional livelihood was not accompanied by industrialisation in India, as had happened in other rapidly industrialising countries of the time. This led to deindustrialisation at the very time Europe was witnessing a reintensified Industrial Revolution. It also happened when Indian artisans and handicraftsmen were already feeling the crunch from the loss of patronage by princes and the nobility, who were now under the influence of new Western tastes and values.

The economist Shashi Tharoor, in An Era of Darkness, describes the story of Indian manufacturing for most of the colonial era as one of dispossession, displacement and defeat. India, he says, became a mere exporter of raw materials and foodstuffs, such as raw cotton, jute, silk, coal, opium, rice, spices and tea, and its share of world manufacturing exports fell from 27 per cent to 2 per cent under British rule. He also holds that deindustrialisation was a deliberate British policy and not an accident, with British industry flourishing and Indian industry failing because of systematic destruction helped by tariffs and regulation that stacked the decks in favour of British industry. These are the views of one author and are widely discussed.

What Was Ruralisation?

Another feature of deindustrialisation was the decline of many cities and a process of ruralisation. Many artisans, faced with diminishing returns and repressive policies, abandoned their professions, moved to villages and took to agriculture. In Bengal, during the Company’s rule, artisans were paid low wages and forced to sell their products at low prices. The result was greater pressure on land. An overburdened agriculture was a major cause of poverty during British rule and upset the village economic set-up. The consequences for the peasantry are in Ruralisation and the Impoverishment of the Peasantry.

Cause of ruin Detail
One-way free trade Cheap British machine goods flooded India after 1813
Tariffs Nearly 80 per cent on Indian textiles; European markets closed after 1820
Railways Carried imports to remote areas
Loss of patronage Princes and nobles adopting Western tastes
Repression in Bengal Low wages and forced sales under the Company
No industrialisation No new industry to absorb the displaced

As an analytical point, deindustrialisation was not just a loss of one industry, textiles, but a shift in the economy’s structure, in which a manufacturing country became a supplier of raw materials and a buyer of finished goods, and this is the sense in which the economy is called colonial. The trade and tariff policy that did this is in One-Way Free Trade and the Tariff Policy, and the later weak growth of modern industry in Late Development of Modern Industry.

Why Is This Topic Important?

  • Colonial economy A concept used in many Mains answers
  • Causes of deindustrialisation Free trade, tariffs and loss of patronage are stock points
  • Contested statistics Share of world economy and exports are debated figures

What Came Next?

The next topic covers one-way free trade and the tariff policy. Next topic: One-Way Free Trade and the Tariff Policy.

Key People and Terms

  • Colonial economy An economy shaped by the colonial power’s interests
  • Deindustrialisation Decline of manufacturing and handicrafts
  • One-way free trade Free entry of British goods without reciprocal access
  • Net importer A country importing more than it exports
  • Ruralisation Shift of artisans back to agriculture
  • Patronage Purchase and support by princes and nobles

Exam Corner

Points to Remember

  • Charter Act of 1813: one-way free trade.
  • Tariffs of nearly 80 per cent on Indian textiles.
  • After 1820 European markets virtually closed.
  • India became a net importer.
  • Ruralisation: artisans moved to agriculture.

Do Not Confuse With

  • Deindustrialisation and ruralisation Loss of manufacturing versus the shift to farming
  • Net exporter and net importer India moved from the first to the second
  • Estimates and facts World-economy shares are historians’ estimates

Memory Hook

Machines in, weavers out, duties up, and the village took back its artisans.

Mains Angle

Questions ask about the causes and effects of deindustrialisation. These points add depth.

  • Cause Free trade and tariffs
  • Effect Ruralisation and net imports
  • Debate Policy or market forces

A Question You May Face

An original practice question, not a past paper question.

“Examine the causes and consequences of the deindustrialisation of India during British rule.”

How to Answer

  1. Colonial economy Define.
  2. Causes Free trade, tariffs and patronage loss.
  3. Consequences Ruralisation.
  4. Conclude Structural change.

GS Relevance

Prelims: Modern Indian History, deindustrialisation. GS Paper 1: Modern Indian history, the ruin of Indian handicrafts under British rule and its causes.

Frequently Asked Questions

What is meant by deindustrialisation under British rule?

It means the decline of Indian handicrafts and manufacturing, especially textiles, as cheap British machine goods flooded India after 1813 while tariffs closed European markets to Indian cloth, turning India from a net exporter into a net importer without new industries growing in its place.

How did the Charter Act of 1813 affect Indian industry?

It allowed one-way free trade for British citizens, so cheap machine-made imports flooded the Indian market while Indian goods found it harder to enter European markets, where tariffs of nearly 80 per cent were put on Indian textiles.

What was ruralisation?

As artisans lost their livelihoods, many abandoned their professions, moved to villages and took to agriculture, so cities declined and pressure on land grew. An overburdened agriculture became a major cause of poverty during British rule.

Why was deindustrialisation not followed by modern industrialisation?

The loss of traditional livelihoods was not accompanied by industrialisation, unlike in other fast-industrialising countries, at a time when Indian artisans were already losing patronage from princes and nobles who adopted Western tastes. This left a large number of artisans without work.

What did Bentinck say about the cotton weavers?

William Bentinck wrote that the misery hardly found a parallel in the history of commerce and that the bones of cotton weavers were bleaching the plains of north India, which described the ruin of Indian handloom weavers by cheap British cloth.

PYQ Practice — Statement Analysis

1 The Charter Act of 1813 allowed one-way free trade for British citizens.
True

Cheap imports flooded the Indian market.

2 India became a net exporter of manufactured goods under British rule.
False

It became a net importer.

3 Tariffs of nearly 80 per cent were imposed on Indian textiles in Europe.
True

European markets were virtually closed after 1820.

4 Ruralisation meant the growth of Indian cities.
False

It meant the decline of cities and the move of artisans to villages.

5 Deindustrialisation in India was accompanied by rapid modern industrialisation.
False

Modern industry developed late.

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