Q. Discuss in detail the phases of British colonialism in India. (250 words)
A. Colonial exploitation was carried on broadly through three phases.
The first phase (1757-1813) of ‘mercantilism’ was one of direct plunder; the second phase (18131858) was of free trade; the third phase (1858 onwards) was one of finance imperialism
First phase (1757-1813): Mercantilism
i. The EIC would trade in goods from India without paying custom duties, because they had got issued a farman from the Mughal Emperor to this effect.
ii. In 1765, after their victory, the British East India Company acquired the rights to collect revenue from its territories in the eastern and southern parts of the subcontinent.
iii. Agricultural taxation was the main source of income for the company. They introduced several methods of revenue collection with the sole objective of maximizing their revenue, such as the system introduced by Robert Clive in 1772, the Permanent Settlement in 1793 by Cornwallis, the Ryotwari System in 1792, the Mahalwari System in 1822.
iv. They tapped the wealth of local rulers, zamindars and merchants in the rich province of Bengal and used them to buy the goods that would be shipped to Britain for sale. Large quantities of wealth, including illegal incomes of company officials, made its way to Britain from Bengal
Second phase (1813-1858): Company lost its monopoly trading rights in India and free trade with India was opened for any British citizen.
i. It threw open Indian markets for the entry of cheap, mass-produced, machine-made British goods, which enjoyed little or almost no tariff restrictions.
ii. The passage of expensive, hand-crafted Indian textiles to Britain, which had been very popular there, was however obstructed by prohibitive tariff rates.
iii. British-Indian territory was developed as a source of food stuff and raw material for Britain, which fuelled rapid growth in its manufacturing sector
iv. This phase laid the foundations of a classic colonial economy within India, through commercialization of agriculture and de-industrialization.
In the third phase, 1858- onwards,
i. This period was one of ‘finance-imperialism’, when British capital was invested in the colony. This capital was organized through a closed network of British banks, exportimport firms and managing agencies. ii. British capital was initially invested in railways, jute industry, tea plantations and mining. The Indian money market was dominated by European banking houses. British banking houses and British trading interests were well organized through Chambers of Commerce and Managing Agencies iii. Before the First World War, British Managing agencies controlled 75% of industrial capital, and most of the profits from this limited industrialization were also sent back to Britain.
This is how the East India Company, and later the British, organized, as William Dalrymple calls it, “the plunder of an Empire”