1.
The greatest impact of
British policies was the drain of wealth from India.
2.
The Indian economy, no
doubts, was primarily a rural economy, but Indian artisans produced goods in
bulk to meet the demands of Indian & European buyers.
3.
There had been a great
demand for ‘muslin’ from Bengal & silk from Bengal & Benares.
4.
British merchants bought
these Indian products in large quantities.
5.
But, at the beginning of
the 18th century, Britain & other European countries passed laws
prohibiting the entry of cotton & silk textiles from India although there
was a demand for it.
6.
After the advent of
Industrial revolution, India was forced to produce cotton, indigo & other
products which British industries required.
7.
Indian markets were
flooded with cheap, machine-made textiles manufactured in England.
8.
While British goods were
exempted from duties while entering Indian markets, Indian goods entering
England were burdened with heavy customs duties.
9.
Thus, the self-sufficient
economy of India collapsed under the impact of British colonial policies. With
the decline of the cotton industry, the towns that had flourished as centres of
trade or industry also declined.