Explain the three types of movements or flows within the international economic exchange. Find one example of each type of flow which involved India and Indians, write a short account of it.

Three types of movement or ‘flows’ within international economic exchanges have been identified by the economists. All three flows affected peoples’ lives and were closely interwoven. The interconnections could sometimes be broken – for example, labour migration was often more restricted than capital flows or goods.

First Type of Movement or Flow within International Economic Exchange

Trade in goods (e.g. wheat or cloth) was largely referred to as the first First Type of movement or flow within International economic exchange in the nineteenth century.

Second Type of Movement or Flow within International Economic Exchange

The migration of people in search of employment was considered as the second type of movement or flow within international economic exchange.

Third Type of Movement or Flow within International Economic Exchange

The third is the movement of capital for short-term or long-term investments over long distances.

Movement of Trade – India

  • India played a crucial role in the late-nineteenth-century world economy, by helping Britain balance its trade deficits. 
  • Britain had a ‘trade surplus’ with India, as the value of British exports to India was much higher than the value of British imports from India. 
  • Historically, fine cottons produced in India were exported to Europe.
  • While exports of manufactures declined rapidly, exports of raw materials increased equally fast. 
  • The inflow of fine Indian cotton began to decline in Britain with the industrialisation of British cotton manufacturers and their expansion.Tariffs were imposed on cloth imports into Britain to discourage imports from India.
  • Britain grew opium in India and exported it to China.
  • Indigo was another important export that was used for dyeing cloth.

Movement of Capital Over Long Distances – India

  • Indian traders and moneylenders also followed European colonisers into Africa
  • Hyderabadi Sindhi traders ventured beyond European colonies.
  • Nattukottai Chettiars and Shikaripuri shroffs were amongst the many groups of bankers and traders who financed exports of agriculture in Southeast Asia and Central Asia.
  • They arranged the funds either through borrowing from European banks or using their own funds.
  • They developed indigenous forms of corporate organisation and they had a sophisticated system to transfer money over large distances.

Flow of Labour – India

  • In India, indentured labourers were hired under contracts. They were promised that they would return to India after working for five years in the employers plantations. 
  • The main destinations of Indian indentured migrants were the Fiji, Mauritius, Caribbean islands (mainly Suriname, Guyana, Trinidad). Closer home, Tamil migrants went to Ceylon and Malaya.
  • Most Indian indentured workers came from the present-day regions of dry districts of Tamil Nadu, Central India, Bihar, eastern Uttar Pradesh, and Bihar.
  • In these regions people were forced to migrate in search of work as they had become deeply indebted, and they had failed to pay their rents. The reasons behind this was lands were cleared for plantations and mines, land rents, rose and cottage industries had declined.
  • In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work in mines, plantations, in railway and road and construction projects around the world.

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