India is not an industrial country in the true and modern sense of the term. But by the standards of the 17th and 18th centuries, i.e., before the advent of the Europeans in India, India was the ‘industrial workshop’ of the world. But this internal balance of the village economy had been systematically slaughtered by the British Government. In the process, traditional handicraft industries slipped away

Deindustrialization :

The process of de-industrialisation of India began with the gradual disappearance of cotton manufactures from the list of India’s exports and the remarkable growth of cotton manufactures in the list of her imports mainly from Britain.

Causes :

• Disappearance of the court culture of late Moghul days and old aristocracy,
• The establishment of an alien rule with the influx of many foreign influences that such a change in the nature of government meant, and
• The competition from machine-made goods.
• The tariff policy pursued by the British Government was also one of the leading causes towards the decay of handicrafts.
• Some people argue that the weaknesses in the industrial structure’ itself must also be blamed for this decline of handicraft industries.
• Guild organisation in India was definitely very weak and India didn’t possess a class of Industrial entrepreneurs.

Effects :

• By breaking up the Indian handloom and destroying the spinning wheel, the British ended the “blending of agriculture and handicrafts”. The internal balance of the village economy was disturbed.
• Present problems of subdivision and fragmentation of land holdings, over- cultivation or cultivation of inferior and unproductive land, etc., are the direct effects of the British rule.
• Indian economy tended to more and more agricultural with the disintegration traditional industries and impoverishment of rural people. This accounted for the famines and increasing poverty in the 19th and quarter of the 20th century. India merely became an exporter of raw material for industrial Britain.

Industrialization :

• Britain granted some political and economic concessions, particularly future industrialisation during the World War 1 and immediately after the War. The British Government appointed the Industrial Commission in 1916 and assured that industrialisation efforts would continue with utmost sincerity. During the inter-war period, output of cotton piece goods, steel ingots, paper, etc., increased substantially. Many other industries also progressed even in terms of employment and the number of factories. But as far as diversification was concerned, it was indeed slow and the state of transformation of the economy was only ‘marginal’.
• The Second World War, however, opened a new phase in India’s industrial history. As the character of the World War II was different from that of the First, the latter created a far more urgent and intense demand for the rapid growth of India’s basic and key industries.

Reasons for Low Industrial Development in India:

It was the result of :

• Inadequate capital accumulation;
• Mobilisation of unproductive investment;
• Undue preference for quick-return yielding commerce and trading activities of the Indian capitalist classes;
• Concentration of entrepreneurship in the hands of a few small sections of Indians.

Conclusion :

Colonialism seemed to be the strongest stumbling block for India’s drive for industrialisation. Above all, the contribution of the British Government towards India’s industrialisation was minimal before 1916. The industrial policy of the imperial power could be described as ‘a case of too little and too late’.