Indian Trade, Colonialism and the Global System
This section provides an in-depth analysis of the transformation of India's trade dynamics in the context of colonialism and the global economy. The narrative begins with the historical importance of Indian textiles, particularly fine cotton, which were exported to Europe. However, the advent of industrialization in Britain altered this trade relationship. The British government, aiming to protect its nascent textile industry, imposed tariffs that restricted the import of Indian cotton goods, leading to a significant decline in India's textile exports from about 30% of total exports around 1800 to less than 3% by the 1870s.
As India's manufactured goods lost their foothold in international markets, the focus shifted to raw material exports. For instance, the share of raw cotton exports rose from 5% to 35% between 1812 and 1871, while indigo and opium became major exports, particularly to China. This transition represented a critical economic reorientation, with India serving increasingly as a supplier of raw materials that fueled British and global industrial growth. The section underscores how India's economic contributions were integral to the functioning of the late-nineteenth-century world economy, illustrating a widening trade surplus for Britain while exposing the underlying inequities of colonial trade practices. The British surplus from India financed its engagements elsewhere, further entrenching a system where India was positioned primarily as a supplier of raw goods.