• The Industrial revolution has helped the English merchants accumulate a lot of capital from the countries of Asia, Africa and America. They now wanted to invest this wealth in setting up industries and trade with India. The mass production of goods through machines that we witness today was pioneered through the Industrial Revolution which occurred first in England during the late 18th and the early 19th century.
  • This led to a massive increase in the output of finished products. The East India Company helped in financing and expanding their industrial base. During this time there was a class of manufacturers in England who benefited more from manufacturing than trading.
  • They were interested in having more raw materials from India as well as sending their finished goods back. Between 1793 and 1813, these British manufacturers launched a campaign against the company, its trade monopoly and the privileges it enjoyed.
  • Ultimately, they succeeded in abolishing the East India Company’s monopoly of Indian trade. With this India became an economic colony of Industrial England. Let us learn more about the economic impact on various Indian industries and trade.

Textile Industry and Trade

  • Earlier, Indian handloom had a big market in Europe. Indian textiles such as cotton, linen, silk and woolen goods already had markets in Asia and Africa. With the coming of industrialisation in England, the textile industry there made important headway.
  • There was now a reverse of the direction of textile trade between Britain and India. There was a massive import of machine made clothes from English factories to Indian markets.
  • This import of large amount of products manufactured by mechanical looms in England led to increase threat for the handicraft industries as the British goods were sold at a much cheaper price.
  • The British succeeded in selling their goods at a cheap price as foreign goods were given free entry in India without paying any duty. On the other hand, Indian handicrafts were taxed heavily when they were sent out of the country. Besides, under the pressure of its industrialists, British government often imposed a protective tariff on Indian textiles. Therefore, within a few years, India from being an exporter of clothes became an exporter of raw cotton and an importer of British clothes. This reversal made a huge impact on the Indian handloom weaving industry leading to its virtual collapse. It also created unemployment for a large community of weavers. Many of them migrated to rural areas to work on their lands as agricultural laborers.
  • This in turn put increased pressure on the rural economy and livelihood. This process of uneven competition faced by the Indian handloom industry was later dubbed by the Indian nationalist leaders as de-industrialisation.
  • The main aim of the British was to transform India into a consumer of British goods. As a result, textile, metal work, glass and paper industries were soon out of work. By 1813, the Indian handicrafts lost both their domestic as well as foreign market. Indian goods could not compete with the British factory-made products where machines were used. These markets were now captured and monopolised by Britain by means of war and colonisation. From an exporter India became an importer of these goods.
  • They extracted money from the Indian rulers, merchants, zamindars and even the common people. Added to this drain were the profit made through trade and also the salaries of the officials. It was evident that their economic policies were meant to serve the interests of the East India Company and later the British Empire.

Commercialisation of Agriculture

  • Another major economic impact of the British policies in India was the introduction of a large number of commercial crops such as tea, coffee, indigo, opium, cotton, jute, sugarcane and oilseed.
  • Different kinds of commercial crops were introduced with different intentions. Indian opium was used to balance the trade of Chinese tea with Britain in the latter’s favor. The market for opium was strictly controlled by British traders which did not leave much scope for Indian producers to reap profit. Indians were forced to produce indigo and sell it on the conditions dictated by the Britishers. Indigo was sent to England and used as a dyeing agent for cloth produced in British towns. Indigo was grown under a different system where all farmers were compelled to grow it on 3/20th part of their land.
  • Unfortunately cultivation of Indigo left the land infertile for some years. This made the farmers reluctant to grow it. In the tea plantations ownership changed hands quite often. The workers on these plantations worked under a lot of hardships.
  • Commercialisation of agriculture further enhanced the speed of transfer of ownership of land thereby increasing the number of landless laborers. It also brought in a large number of merchants, traders and middlemen who further exploited the situation.
  • The peasant now depended on them to sell their produce during harvest time. Because the peasants now shifted to commercial crops, food grain production went down. So, less food stock led to famines. It was therefore not surprising that the peasants revolted. You would read about it in detail in the coming chapters. There was an enormous drain of wealth from our country to Britain due to the various economic policies.
  • Additional financial burden was placed on India due to expenditures on salaries, pensions and training of military and civilian staffs employed by the British to rule India. If this wealth was invested in India it could have helped enormously improved the economy in this country. Let us learn how the economic policies implemented by the British changed the social structure of Indian society.

Rise of the New Money-lending Class

  • Time bound and excessive demand of revenue by the British government forced the peasants to take loans from the moneylenders. These moneylenders often exploited the peasants by charging high interest rates. They often used unfair means like false accounting, forged signatures and thumb impressions.
  • The new legal system and the policy introduced by the British only helped the moneylenders who were either local merchants or landlords. In most cases, the peasants failed to pay back the loan with full interest. Thus, their lands gradually passed into the hands of the money-lending class.

Rise of the New Middle Class

  • A major impact of the British rule in India was the beginning of a new middle class. With the rise of the British commercial interests, new opportunities opened to a small section of the Indian people. They often acted as the agents and intermediaries of the British traders and thus made huge fortunes.
  • The new landed aristocracy, which came into being after the introduction of Permanent Settlement, also formed a part of this new class. A major section of the old landowning aristocracy lost ownership of their land and in many cases were replaced by a new class of land owners. These people got some English education and became the new elite. With the spread of British power, new job opportunities were also created. Indian society witnessed the introduction of new law courts, government officials and commercial agencies.
  • The English educated people naturally got the necessary patronage from their colonial rulers. Thus, a new professional and service-holding middle class was also created by the British, apart from those with landed interests

Transport and Communication

  • The means of transport in India at that time were bullock carts, camels and pack animals. England on the other hand needed railways that connected the raw material producing areas with the exporting ports and to facilitate the movement of British goods to different parts of the country as well as bring raw materials to the ports. The vast network of railways that you witness today was pioneered during the latter half of the 19th century.
  • This opened avenue for British bankers and investors to invest surplus wealth and material in the construction of railways. Railways benefited the British capitalists in two important ways. First, it made trading in commodities much easier and profitable by connecting the internal markets with the ports. Secondly, the rail engines, coaches and the capital input for building of rail lines came from Britain.
  • The British capitalists who invested in railways were also guaranteed a minimum profit of 5% by the government. These companies were also given free land with a lease of 99 years.
  • Although the railways were set up for the advantage of British trade, they also played an important role in the national awakening of the country. Though the British had never anticipated, the extensive transport network and improved education brought people and ideas closer.
  • During British rule, India took ideas of liberty, equality, human rights, science and technology from the West. This accelerated the process of modernisation. Now we will read about the impact of modern idea on Indian society.

Land Revenue Policy and Land Settlements

  • Since ancient times, the main source of livelihood for the people were agriculture. Hence, land tax had formed a principal source of revenue for all the emperors all over the world. In the 18th century, the main occupation of the Indian people were agriculture. During British rule, revenue from land kept on increasing, and the reasons for this were many. Earlier the British had come to trade with India. Gradually they wanted to conquer the vast territory of India for which they needed a lot of money.
  • They also needed money for trade, projects of the company as well as for the cost of running the administration. The British carried out a number of land revenue experiments which caused hardship to cultivators. They extracted taxes from the farmers to finance their policies and war efforts. Direct and indirect means were carried out to bring about this collection of revenue for the British.
  • This affected the lives of the people who could not meet their daily needs because they had to provide the landowners and the collectors their share in the produce. Local administration failed to provide relief and natural justice to the rural poor.
  • Lord Cornwallis introduced the Permanent Settlement in Bengal and Bihar in 1793. It made the landlord or zamindar deposit a fixed amount of money in the state treasury. In return they were recognised as hereditary owners of land. This made the zamindar the owner of the land. The amount of revenue to be paid to the Company was fixed for a period of time which made the British financially secured.
  • Now they knew in advance as to how much revenue was coming in form the State. The zamindar also knew how much revenue was to be paid. So to get surplus revenue for themselves they asked the peasants to increase production. But, if the zamindar failed to pay the fixed revenue on time his land was sold off to another zamindar.
  • The British stood to benefit from this settlement as the new class of zamindars that emerged became their political allies. They supported the British in times of need and acted as a buffer between them and the peasants. This class, in fact, supported the British against the freedom movement.
  • In 1822, the British introduced the Mahalwari Settlement in the North Western Provinces, Punjab, the Ganga Valley and parts of Central India. Here the basis of assessment was the product of a mahal or estate, which may be a village or a group of villages.
  • Here all the proprietors of mahal were jointly responsible for paying the sum of revenue assessed by the government. Unfortunately it brought no benefit to the peasants as the British demands were very high
  • The Ryotwari Settlement was introduced in the beginning of the 19th century in many parts of Bombay and Madras Presidencies. Here the land revenue was imposed directly on the ryots, the individual cultivators, who actually worked on the land. The peasant was recognized as the owner of the land as long as he was able to pay the revenue but the exploitation continued with the high revenue demands.


  • Indian society underwent many changes after the British came to India. In the 19th century, certain social practices like female infanticide, child marriage, sati, polygamy and a rigid caste system became more prevalent.
  • These practices were against human dignity and values. Women were discriminated against at all stages of life and were the disadvantaged section of the society. They did not have access to any development opportunities to improve their status. Education was limited to a handful of men belonging to the upper castes. Brahmins had access to the Vedas which were written in Sanskrit. Expensive rituals, sacrifices and practices after birth or death were outlined by the priestly class.
  • When the British came to India, they brought new ideas such as liberty, equality, freedom and human rights from the Renaissance, the Reformation Movement and the various revolutions that took place in Europe. These ideas appealed to some sections of our society and led to several reform movements in different parts of the country.
  • At the forefront of these movements were visionary Indians such as Raja Ram Mohan Roy, Sir Syed Ahmed Khan, Aruna Asaf Ali and Pandita Ramabai. These movements looked for social unity and strived towards liberty, equality and fraternity. Many legal measures were introduced to improve the status of women. For example, the practice of sati was banned in 1829 by Lord Bentinck, the then Governor General. Widow Remarriage was permitted by a law passed in 1856.
  • A law passed in 1872, sanctioned inter-caste and inter-communal marriages. Sharda Act was passed in 1929 preventing child marriage. The act provided that it was illegal to marry a girl below 14 and a boy below 18 years. All the movements severely criticized the caste system and especially the practice of untouchability.
  • The impact of the efforts made by these numerous individuals, reform societies, and religious organisations was felt all over and was most evident in the national movement. Women started getting better education opportunities and took up professions and public employment outside their homes. The role of women like Captain Laxmi Sehgal of Indian National Army (INA), Sarojini Naidu, Annie Besant, Aruna Asaf Ali and many others were extremely important in the freedom struggle.

Social and Cultural Policy

  • The British had come to India with the idea of making immense profits. This meant buying of raw materials at very cheap rates and selling finished goods at much higher prices. The British wanted the Indians to be educated and modern enough to consume their goods but not to the extent that it proved detrimental to British interests
  • Some of the Britishers believed that Western ideas were modern and superior, while Indian ideas were old and inferior. This was, of course, not true. Indians had a rich traditional learning that was still relevant. By this time in England there was a group of Radicals who had a humanistic ideology towards Indians.
  • They wanted India to be a part of the modern, progressive world of science. But the British government was cautious in undertaking rapid modernisation of India. They feared a reaction among the people if too much interference took place with their religious beliefs and social customs. The English wanted perpetuation of their rule in India and not a reaction among the people.
  • Hence, though they talked about introducing reforms, in reality very few measures were taken and these were also half-hearted

Education Policy

  • The British took a keen interest in introducing the English language in India. They had many reasons for doing so. Educating Indians in the English language was a part of their strategy. The Indians would be ready to work as clerks on low wages while for the same work the British would demand much higher wages.
  • This would reduce the expenditure on administration. It was also expected to create a class of Indians who were loyal to the British and were not able to relate to other Indians. This class of Indians would be taught to appreciate the culture and opinion of the British. In addition, they would also help to increase the market for British goods. They wanted to use education as a means to strengthen their political authority in the country.
  • They assumed that a few educated Indians would spread English culture to the masses and that they would be able to rule through this class of educated Indians. The British gave jobs to only those Indians who knew English thereby compelling many Indians to go in for English education. Education soon became a monopoly of the rich and the city dwellers.
  • The British Parliament issued the Charter Act of 1813 by which a sum of Rupees One lakh was sanctioned for promoting western sciences in India. But a controversy soon arose. Some wanted the money to be spent on advocating western ideas only. There were others who placed more emphasis on traditional Indian learning.
  • Some recommended use of vernaculars (regional languages) as the medium of instruction, others were for English. In this confusion people failed to notice the difference between English as a medium and English as a subject for study. The British, of course, decided in favor of teaching western ideas and literature through the medium of English language alone. Another step in this direction was the Woods Despatch of 1854.
  • It asked the Government of India to assume responsibility for the education of the masses. As part of the directive given by the Woods Despatch, Departments of Education were instituted in all provinces and Affiliated Universities were opened in Calcutta, Madras and Bombay in 1857. A few English schools and colleges were opened instead of many elementary schools. They ignored the education of the masses. But in reality, it was not sufficient to cater to the needs of the Indian people
  • Though the British followed a half-hearted education policy in India, English language and western ideas also had some positive impact on the society. Many reformers like Raja Ram Mohan Roy, Ishwar Chandra Vidyasagar, Swami Dayanand Saraswati, Sir Syed Ahmad Khan, and Swami Vivekananda absorbed western ideas of liberalism and democracy and used it to reform some of the non-humanitarian social and religious practices of the time.
  • Though education did not reach the masses but some ideas of anti-imperialism, nationalism, social and economic equality took root through political parties, discussions and debates on public platform and the press.
  • The spread of English language and western education helped Indians to adopt modern, rational, democratic, liberal and patriotic outlook. New fields of knowledge in science, humanities and literature open to them. English became the lingua franca of the educated people in India. It united them and gradually made them politically conscious of their rights. It also gave opportunity to the Indians to study in England and learn about the working of democratic institutions there.
  • The writings of John Locke, Ruskin, Mill, Rousseau and many others instilled in them the ideas of liberty, equality, fraternity, human rights and self-government. The French and the American Revolutions, and the unifications of Italy and Germany further strengthened their appreciation of these ideas. Cavour, Garibaldi and Mazzini became their favorite heroes. They began to aspire for these ideals for India.
  • Western thinkers like Max Mueller and Annie Besant encouraged vernacular languages and literary works to instill a sense of pride in Indian heritage and culture. It enabled Indians to revive India’s cultural past. Also, the important role of press in arousing political awakening and exchange in ideas is noteworthy.
  • The newspapers and journals gave opportunities to share ideas and problems. Similarly, novel, drama, short story, poetry, song, dance, theatre, art and cinema were used to spread views and express resistance to colonial rule. They spoke the language of the people, showcasing their everyday lives, joys and sorrows. Along with newspapers and journals, they promoted the feelings of self confidence, self respect, awareness and patriotism, thereby developing a feeling of national consciousness.
  • The British devised several strategies to make their rule effective. The early British administrators in India like Warren Hastings, William Jones, Jonathan Duncan and others glorified India’s ancient past. These scholars and administrators were called Orientalists. They thought that a better understanding of Indian languages, literature and culture would make it easier for them to rule India. Important institutions that came to be identified with their efforts were the Calcutta Madarsas founded by Warren Hastings (1781), the Asiatic Society of Bengal founded by William Jones (1784), the Sanskrit College at Banaras founded by Jonathan Duncan (1794) and the Fort William College founded by Wellesley (1800).
  • These institutions, especially the Asiatic Society and the Fort William College became the epicenter of the study on Indian culture, languages and literature. For the first time great ancient Sanskrit writers like Kalidasa became known to the world through translation of their monumental work into English.

British Administration and Judicial System

  • The Indians found it difficult to adjust to the new system of administration introduced by the British. The Indians were denied political rights and the British officers treated them with contempt. Indians were excluded from all higher positions in the civil administration and military.
  • The British also introduced a new system of law and justice in India. A hierarchy of civil and criminal courts was established. The laws were codified and attempts were also made to separate the judiciary from the executive. Efforts were made to establish the ‘Rule of Law’ in India. But this only helped the British to enjoy arbitrary powers and to interfere with the rights and liberties of the Indians.
  • The law courts were not easily accessible to the common people. Justice became a costly affair. The new judicial system also discriminated between Europeans and Indians.

Impact Today

  • After reading this lesson, you would become more aware of how British rule affected every bit of Indian life. This political control also meant a long drawn interaction between two distinct cultures. Some changes were deliberately introduced to strengthen the British political and trading interests. But there were others that occurred as a byproduct of the interaction between the Indian and the western cultures. A large number of British and Europeans stayed in our country during this period which also brought cultural transformation.
  • We should also understand that our present life is shaped to a great extent by our immediate past. In this immediate past, the British control over a large part of the country becomes an important determining factor. Some of the cultural and legal changes that took place as a result of British rule continue to affect our life even today. The rails, the club life, the imperial buildings like the Rashtrapati Bhavan and the Parliament are reminiscent of the British rule in India. Many food items like bread, tea and cake that we consume today are a direct result of our interaction with Europeans during the British rule.
  • If you look around yourself, you will be surprised to know that a large number of costumes prevalent in urban India were adopted during the British rule, for example, trousers, coats and ties. The idea of introducing Indian civil service started during this period. The Indian armed forces still retain many aspects of European training and culture.
  • The medium of our instruction or learning itself is predominantly English. The Supreme Court and the High Court pass their judgments in English. This language itself is a legacy of the British rule and continues to be the lingua franca of Indians seeking employment in their own country.
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