India’s drain of wealth helped finance England’s Industrial Revolution

As late as the 1750s, India had an export surplus; its favourable trade balance was matched by bullion import, as the world had nothing else to offer India in return for its fine textiles. British colonialism reversed this process, first by monopolising trade and then — in the early 19th century — by demolishing Indian industry. During the period when British trade established supremacy, goods were exported by India but the bullion never reached the country. British merchants purchased goods in rupee receipts in India, and exchanged them abroad for bullion. Much before Dadabhai Naoroji and the so-called ‘modern nationalist’ school came up with a figure for India’s drain of wealth, Mughal chroniclers had put it at more than 100,000 million pound sterling per annum.

In fact, bullion owed to India helped finance England’s Industrial Revolution. Then, in order to flood Indian markets with European goods, India was de-industrialised. From being a supplier of luxury goods, it was turned into an exporter of raw material. Between 1820 and 1840, de-industrialisation closed down more than 12,000 markets, controlled and operated by peasants and small entrepreneurs in northern India. Amaresh Misra Who were the sepoys of 1857? Indian Express Wednesday, May 09, 2007 The writer is the author of ‘Mangal Pandey : The True Story of an Indian Revolutionary’