"British colonial rule in India resulted into systematic deindustrialisation of Indian indigenous industries." Explain the two-fold motive of the British with valid arguments. "The trade and investment policy initiated by the Indian Government during 1991 economic reforms involved some major decision-making with respect to local industries." Elaborate any two major decisions and their respective impacts on the Indian economy.

Question

Accepted Answer

British colonial rule resulted in systematic deindustrialisation of Indian indigenous industries. Two-fold motive:

1. **To Get Raw Materials at Cheap Rates:** British wanted to obtain raw materials from India at low cost for their upcoming modern industries in Britain.

2. **To Sell Finished Products at Higher Prices:** British wanted to sell finished products of their industries in Indian market at higher prices.

**Impact of De-industrialisation:**
- Decline of renowned Indian handicraft industry
- High level of unemployment as displaced artisans moved to agriculture
- Import of finished goods from Britain increased
- India became exporter of raw materials and importer of finished goods

**Trade and Investment Policy Reforms:**
- Removal of quantitative restrictions on imports/exports
- Removal of export duties
- Reduction in import duties
- Relaxation in import licensing