This is an perhaps an oversimplified, linear narrative of how India went from a land ‘out there’ and ‘somewhere’ to being the crown jewel of the British Empire. If I were to write this story of colonization for a history paper, I would perhaps sink without a trace in the deep waters of historical analysis. But it still merits a shot for the fact that simpler narratives are a point of start for the more nuanced ones.
The story of colonization in India is that of a gradual subjugation and systematic economic exploitation. From the first colonial encounter – with the merchants of the British East India Company – to establishment of British empire with India as a colony, the two hundred years of British presence has left an indelible mark on all aspects of Indian economy, agriculture, geography and more so its social core. Historians reason that Indian colonization happened in three distinct phases –
Mercantilism (Phase I), 1755 – 1813
What started as a small trading operation from a small post on the Hoogly river in Calcutta in 1755, the operation of British East India Company went much beyond trade in the decades to follow. The English merchants were interested in trading spices, silk, jute and other goods which would sell in Britain. Merchants and businessmen dominated this period and expanded their trading operations in India rapidly as the demand for these goods in Britain increased. However, growing demand for these goods back in Britain also meant an outflow of bullion out of their country and into India. In addition to this the cost of trading in India were high due to wars with the Portuguese and Dutch trading companies.
The merchants sought to address this by extracting land revenues in India as taxes which could compensate the outflow of money from Britain. The rights to land revenue were to be acquired from the rulers of princely states of India. The first such land revenue collection rights or the “Diwani” rights were acquired for Bengal after the Battle of Plassey in 1957. This was soon to spawn an elaborate system of land revenue system known as “ryotwari” system and the “mahalwari” system (in northern parts). The model was on a template of land revenue system of the Mughal rulers who preceded the British. Ryotwari system is a characteristic of this period. It was operationalzed with the help of intermediaries or “zamindars” who were awarded the ownership of large tracts of land and were responsible for collection of revenues on behalf of the Company. Historian Bipan Chandra estimates that the export from India to Britain increased four times during this period. Indian trade had come to be monopolized completely by the British as the 18th century came to an end.
Free Trade (Phase II), 1813 – 1858
During the second decade of 19th century Adam Smith’s idea of free trade or “laissez faire” economy had managed to influence the British parliament with some of its members – the “free traders” demanding that access to Indian markets must be made free. This translated into the Company losing its monopoly rights in India. To this effect the Charter Act of 1813 was passed. It withdrew British East India Company’s trade monopoly. The Company’s territorial possessions were now subordinated to the British crown.
This phase is marked by commercialization of Indian agriculture. India was fast converting into a plantation colony with cash crops like indigo, opium, jute and tea being forced on the peasants, over food grains. Consequently indentured labour was used for running several of its plantation colonies in French Guyana, Trinidad and Tobago and Sri Lanka. Agriculture in India now served as a raw material base for British industries. Famines, introduction of railways (1853) and irrigation projects were other features of this phase.
Financial Imperialism (Phase III), 1858 – 1947
Industrial revolution in Britain and an uprising of native Indian soldiers against the Company (the Sepoy mutiny) ushered in the imperialistic phase where the colonizer and the colonized relationship was set firmly in place. The railways, land revenue system, civil services and judiciary served as the apparatus of the British government to strengthen the colonial grip and make India serve as a captive resource providing colony which would get fed into the furnace of British prosperity perpetually.
This phase is marked by de-industrialization of Indian industry (as argued by many historians and economists, though I find that this period also served as a demonstration of industrial technology and its capability for the Indian entrepreneurs and who would later make good use of it to set up their own businesses. Ex- V O Chidambaram Pillai in Tamil Nadu, Birlas and Goenkas in Calcutta, textile entrepreneurs in Bombay). Indian goods during this period became in-competitive to the superior machine made goods like textiles which flooded the Indian market from Britain. This inflow of cheap goods was a consequence of the industrial revolution in Britain.
The domestic market was systematically exploited and foreign trade by 1920s had declined significantly. Indian capitalist class rises in the aftermath of the World War II when the foreign economic influence wanes away due to the war. It is then that the Indian economy picks up steam and the Indian industrialists align with the Congress to push for independence. What follows later ends the colonization of India in 1947.