What was the nature of India's foreign trade under the British rule?

Question

Accepted Answer

India, which had been an important trading country since ancient times, was adversely affected by the restrictive policies pursued by the colonial government with respect to commodity production, trade and tariff.

1. India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo and jute, and an importer of finished consumer goods like cotton, silk and woollen clothes and capital goods like light machinery.

2. Britain maintained a monopoly control over India's exports and imports. More than half of India's foreign trade was restricted to Britain, while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia (Iran).

3. Generation of a large export surplus was the most important feature of India's foreign trade. But this surplus came at a huge cost, as it was used to meet the expenses on wars and the import of invisible items, leading to the drain of Indian wealth.