HIST363: Global Perspectives on Industrialization

The above facts about the ability of the Indian farmers to innovate assimilate and cultivate, shows that Indian agriculture was a dynamic system which enabled the export of Indian spices and handlooms, at fancy prices to Europe via the Middle East. But how did this affect the Indian economy and the farmers? After the Battles of Buxar (1755) and Plassey (1757), the British became the dominant power in the sub-continent as by that time, the other colonial powers which tussled for power had accepted their secondary status in India.

• The Portuguese were the first to come to India and set up bases in:
  1. Goa – 1610, 2. Daman – 1558, 3. Diu – 1535, 4. Bassein – 1533, 5. Nagapattinam – 1567, 6. Hugli – 1658, 7. Colombo – 1507, 8. Galle – 1507, 9. Matara – 1507, 10. Trincomalee – 1522, 11. Cannanore – 1501, and 12. Calicut – 1498. They lost to the Dutch in Ceylon but retained bases in India.
  
  
• The Dutch set up bases in:
  1. Pulicat – 1600, 2. Chinsura – 1653, 3. Masulipatnam – 1616, 4. Colombo – 1658, 5. Matara – 1656, and 6. Galle – 1656, but they concentrated on Ceylon and Indonesia since they could not match the British naval power.
  
  
• The French set up bases in:
  1. Pondicherry – 1674, 2. Chandannagar – 1675, 3. Yanam – 1725, 4.s Mahe – 1725, 5. Karikal – 1739, and 6. Colombo – 1673.
  
  
• The Danes built a few bases in:
  1. Serampore – 1675, 2. Tranquebar – 1620, 3. Nicobar-1654, and 4. Balasore – 1673.
  
  
• England was a trading and naval power and had major bases in:
  1. Vishakhapatnam – 1682, 2. Surat – 1612, 3. Bombay – 1638, 4. Madras – 1639, 5. Calcutta – 1690, and 6. Hugli – 1658.
  

The British became the dominant colonial power in the sub-continent after astute politicking, diplomacy and use of brute force. It would be interesting to see how the Indian and British economies fared since 1 A.D. (Based on Angus Maddison – 2003 at 1990 International $), at Table 1 below:

Table 1. Share of World GDP

For more than 1,000 years, Indian per capita GDP exceeded Great Britain, but remained at stagnant levels. Thereafter, education, trade, technology, colonial prowess, and slavery ensured the British per capita GDP became 10 times India's per capita GDP. How did the Indian economy fare in comparison with other countries in the world? It would be interesting to study the share of India and Great Britain in the world's GDP over the next 2,000 years (from Angus Maddison, 2003), as at Table 2 below:

Table 2. Share of World GDP (%)

Even taking into account the size of India in area and population, the decline since 1500 A.D. of India's share in the world's GDP, had started; by 1900 the British share of the world GDP, had overtaken India's share of world GDP (in 400 years) and is today about half of Indian Share of World GDP. The rapid decline of India's fortunes coincided with the British rise in fortunes. Thus colonial rule by the British over India did benefit the British economically while at the same time, it impoverished India, totally. India which provided 25% of the worlds GDP for 1500 years started decaying, while the other countries forged ahead. China, the USA and Canada, Australia and the colonial powers of Europe managed their economies better while India was bent on self-destruction and poor governance for about 500 years. We also need to study the per capita GDP of India from 1600 to 1870 in Table 3 below:

Table 3. India's Per Capita Growth (1600-1870)

The stagnation in the economy and the growing population ensured that per capita GDP fell rapidly since 1751. So we may have to delve deeper to analyze the acceleration in pauperization levels during the colonial dominance of England (1757-1947). For 1,500 years since 1 AD, India had a stable and strong economy with stable agriculture, flourishing internal and external trade and rich handicrafts industries. Subsistence farmers settled in small village communities, carried on agricultural operations. Landlords were not land owners, they only had the right to collect taxes on behalf of the governing authority. A village was mostly self- sufficient and the barter trade was prevalent (jajmani system).

The farmer raised crops for his family consumption and shared the same with the village artisans who provided simple goods for his consumption, the oil-crusher, the carpenter, the barber, the blacksmith, the potter, etc. The means of communication were primitive and agriculture trade produce was limited. Money was only needed to pay revenue & taxes as it was largely a non-monetised economy. India had extensive domestic and export trade with countries in Asia, Europe and Africa. There was a balance between imports and exports. India imported horses, pearls, wool, dates, dried fruits, attar from Arabia as also coffee, gold, drugs and honey, tea, silk from China and gold, musk, woolen cloth, paper, copper, lead and iron from Europe.

The major items of Indian exports were handloom cotton and silk textiles, spices, raw silk, diamonds, indigo, opium, rice, wheat, sugar, drugs and other precious stones. Though experts were risky due to poor quality ships and pirate activity, both overland and marine trades were well-financed (due to hundis) and rich merchants, kings and the nobility also financed such trade. A favorable balance of trade and an indigenous manufacturing/ production system was the major strength of Indian economic dominance for over 1500 years. India's artisans were famous for their skills and India's foreign trade balance was favorable due to this manufacturing excellence and excelled in large–scale manufacture of cotton and silk cloth, sugar, jute, dyestuffs, minerals and metal products like any, metal wares and oil.

By 1700, India was a land with excellent manufacturing skills and the British destroyed this base due to the domestic economic compulsions in the aftermath of the Industrial Revolution in Great Britain, when machine- made cloth from Manchester began replacing indigenously produced cloth. Indian cloth experts faced a 30% import duty while cheaper mill- produced cloth from England had no import duties to pay in India. Indian skilled artisans were forced out of the production system and this led to India's economic decline (Dutt, 1990).