Indian Foreign Trade During British Raj

The interchange of products and services across two or more nations, boundaries, or territories, i.e. both export and import, is known as foreign trade. Since its freedom, India has been a significant trade country, exporting commodities such as wool, silk, sugarcane, cotton, jute, & indigo, among others. Importer of completed consumer items such as woollen clothing, cotton, and silk and capital goods such as light machinery made in the United Kingdom.

India was a prominent actor in international trade before the colonial era. Pre-colonial India had been brimming with potential, establishing itself successfully on the international map. India’s part in the global economy was approximately 20% at the turn of the nineteenth century, and it was rapidly increasing. Even by the time the British departed India, their share had dropped to roughly 4%. As a result, colonial control crippled India’s foreign trade considerably.

Pre-Colonial India

Vasco da Gama, a Portuguese explorer, arrived at Calicut in 1498 as another European to travel to India. The considerable profit gained on this journey piqued the Portuguese interest in doing more business with India and drew additional European explorers and traders. In 1500, Pedro Alvares Cabral set out for India, establishing Portuguese trading stations in Calicut and Cochin before coming to Portugal in 1501 with spices such as pepper, ginger, cardamom, cinnamon.  The revenues from this excursion were enormous.

For its consumer products, pre-colonial India had a global market. The excellent quality of craftsmanship was highly regarded and had a worldwide reputation. Handicrafts and textile manufacturing are prominent examples. Some instances are Kashmiri and Punjabi shawls and rugs, Benaras saris, & Nagpur silk textiles. Pre-British India was also known for its creative handicrafts, including silver and gold ornaments, brass, iron, other metal products, marble art, ivory, timber, stone carvings, and elegant crockery. These products and spices, pepper, opium, and indigo accounted for India’s exports. India successfully exported strong industrial products to European nations and had a substantial market share in the global economy.

After British Rule

Up to half of all international trade was confined to the United Kingdom. The British intended to redirect this vast amount of commerce to their advantage. With the aid of restrictive commodities production, trade, and tariff policies during British rule, India’s external commerce with the rest of the globe was shut off.

India exported sophisticated products in high demand worldwide before the colonial period. India was relegated to a provider of raw resources such as jute, wool, indigo, cotton, and sugarcane and an importer of completed consumer products such as silk & woollen clothing and small machinery created in British industries during colonial control. Furthermore, the development of the Suez Canal increased British influence over Indian international commerce.

China, Sri Lanka, and Persia were the only countries authorised to trade with India. Surprisingly, the colonists kept a close eye on this commerce as well. There was a vast creation of export surpluses during the British Raj.

During the same period, reduced production of critical products such as clothing, food grains, and fuel resulted from this export. The heavy use of resources to make commodities for export resulted in a severe scarcity of civic goods.

Furthermore, due to the oversupply, there was just no movement of silver or gold. The export excess, unfortunately, never reached India. It would be used to pay for establishing a British office, British war costs, and the purchase of intangible goods. Such atrocities finally ushered in a new era for India’s overseas trade. 

Surplus Export and Wealth Drain

The production of a significant export surplus (a situation in which a country’s exports surpass its imports) was the most important feature of India’s international commerce during the colonial period.

However, the country’s economy paid a high price for this surplus. Several critical items, such as food grains, clothing, and kerosene, were limited on the home market.

Furthermore, there was no influx of silver or gold into India based on the export excess. Instead, it has been used to pay for expenditures spent by a British colonial government office, costs made by a British government-run war, and the purchase of intangible things, which resulted in the draining of Indian income.

Conclusion

Even before the British took over, India enjoyed a solid worldwide reputation. India was famed for its handicraft industry in cotton and silk fabrics, metallic and valuable stone production, and other sectors. The importance of the exquisite type of goods being used and quality expectations of artistry evident in all importers helped these products gain a global market. During the British administration, India’s exports were more significant than its imports due to the British authorities’ strict regulations over the country’s exports. Significant export gains mainly were utilised to pay for British rule in India and British-led wars. Export profits were also used to import intangibles such as goods and investments to the United Kingdom. All of this transferred India’s riches to the United Kingdom.