Indian Industries During British Rule - All you need to know

India used to be a well-known industry for textile and handicrafts in the old days. History is full of such information that India was an established nation dealing in textile, spices and metals, silk and cotton etc.

After the arrival of British, these industries were destroyed slowly as Britishers followed the process of de-industrialisation of Indian industries to make way for British industries to flourish.

Following points will throw light on the situation of industries during British Rule.

1.The decay of Handicraft Industries: The traditional handicraft industries in India was flourishing and was known worldwide. But with British arriving in India, they stopped the practice of using handicraft export by placing tariffs on exports.

Also, there was stiff competition from the machine-made products. With the introduction of Railways, the reach of British products increased to every corner of the country. All these factors led to the downfall of textile and handicraft industries in India.

2. Slow Growth of Modern Industries: The presence of a lopsided infrastructure resulted in the limited or slow growth of enterprises. Besides, there was a scarcity of basic and heavy industries that hindered the growth.

Also read: Indian Industries during british rule

Q.1- What was the state of industrial sector under british rule?
  • Similar to the agriculture sector in India, Industrial sector also did not see much growth and development.
Following were the major reasons which were responsible for bleak growth of industrial sector.

Systematic De-Industrialisation


  • The Primary motive of Britishers behind de-industrialisation was two-fold(i) To make India a net exporter of raw material to the British Industries.(ii) To sell British products at a higher rate in the Indian market.
  • British followed Discriminatory Tariff poll
  • Discriminatory Tariff policy signifies free export of raw material from India and import of finished product from Britain and placing a heavy duty on export of Indian handicrafts.

Lopsided modern industrial structure

  • British rulers never permitted modernisation nor did they encourage the growth of Industries.
  • Unbalanced and lopsided growth structure was a legacy of British rule in India.
  • In 1850-55 first cotton mill, jute mill and coal mine were established.
  • By the end of the 19th century, 194 cotton mills and 36 jute mills were located in the western part of the country (Maharashtra and Gujarat)
Lacking capital goods industry
  • Capital goods industry refers to the industry which produces goods such as machines, tools, etc. which are further capable of producing consumer goods.
  • Primary objective of British rulers was to develop such an industry in India which would never be able to compete with the British Industry.
  • They want to make Indian industry to be dependent upon British industry for capital goods.

Recommended links: Class 11 Economics Important Question

Q.1- What was the two-fold motive behind the systematic de-industrialisation affected by the British in pre-independent India? (NCERT)
Two-Hold Motives 1. First Motive-To get the raw material from India at a cheap rate and thus to reduce India to a mere exporter of raw materials to the British industries.

2. Second Motive– To sell British manufactured goods in the Indian market at higher prices.

Q.2- Which Indian industry was adversely affected due to the partition of India and why?
  • Jute industry was adversely affected due to the partition of India because :(a) The whole of the jute producing area became part of East Pakistan (now Bangladesh); and(b) India’s jute goods industry suffered heavily for lack of raw material.
Q.3- What do you mean by capital goods industry? Discuss the status of such industry during the British rule?
  • Capital goods industry means industries which can produce machine tools which are used for producing articles for current consumption.
  • During the British rule, there was hardly any capital goods industry to support the slow industrial development taking place in India.
  • Britishers did not pay any attention for the set-up of such industries because they wanted Indians to be dependent on Britain for the supply of capital and heavy goods.
Q.4- Name some modern industries which were in operation in our country at the time of independence.
Modern industries which were in operation in our country at the time of independence are as follows:

(i) Cotton textile industries.

(ii) Jute textile industries.

(iii) Iron and steel industries.

(iv) Sugar industries.

(v) Cement industries etc.

Q.5- What are capital goods?
Capital goods refer to those goods which are used to produce consumer goods such as Plant and Machine etc.

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