Colonial Rule and Its Effects on India's Rural Economy
Read this article, which takes a much longer-term historical view of
India's contributions to the global economy. In particular, it covers
how British colonial rule may have "broken" the economy in ways that
have yet to be repaired.
The Lure of Spices
The European maritime powers were obsessed with
breaking the Arab-Venetian monopoly on India's spice
trade and desired a larger share in the lucrative trade.
The overland routes took too long and were subject to
various exactions by rulers and brigands. The Silk Route
from China was again the monopoly of the Venetians, Turks, Persians, and the maritime nations of Europe,
tried hard to discover the fabled sea-route to India after
rounding the Cape of Good Hope which the Arabs
monopolized as a closely-guarded secret. Spain, Portugal
and other rival powers tried their best to discover new
trade markets and Manuel I of Portugal commissioned
Vasco de Gama, an explorer to seek out Christian
Kingdoms in the East and also Portuguese access to the
rich Asian markets.
Manned by 170 sailors in four ships, Vasco De Gama reached Calicut in 1492, but could not purchase much spices and returned to Lisbon with two ships and 54 men. Pedro Cabral then visited Goa with 15 ships and returned with four ships laden with spices and made huge profits. Vasco de Gama was promoted to Admiral and sent in 1502 to establish an empire, unleashed a reign of terror on the Arab trading dhows and other slow merchant ships and established a number of Portuguese settlements and possessions in India. The Portuguese sent envoys to various Indian kings and noted that opium was widely used and highly valued in society.
In
1600, the British East India Company was set up and by
1764 when they took control of the Bengal Suba, they
controlled opium production and established a
monopoly which helped in defraying the huge expenses
incurred in carving out a colonial empire in India and
balancing the trade deficit with China (Maddison, 2007).