India’s foreign trade was adversely affected by the British government’s restrictive policies on commodity production, trade, and tariffs. Here’s a simplified version of the state of India’s foreign trade on the eve of independence:
Export of Raw Materials, Import of Finished Goods: India mainly exported primary products like silk, cotton, wool, sugar, indigo, and jute. In return, it imported finished consumer goods such as cotton, silk, woolen clothes, and capital goods like light machinery from British factories. The UK was the major supplier to India, accounting for more than 31% of total imports. India also had to import food grains, reaching 3 million tonnes by 1947.
British Monopoly Control: The opening of the Suez Canal in 1869 provided a direct trade route between India and Britain, making it easier for British ships to exploit the Indian market. Britain maintained a monopoly control over India’s foreign trade, with more than half of it conducted with Britain. Limited trade was allowed with a few other countries like China, Ceylon (Sri Lanka), and Persia (Iran).
Drain of India’s Wealth: The British economic policies in India aimed at maximizing their own benefits from India’s trade. India’s foreign trade generated a surplus, but it did not result in the inflow of gold or silver into India. Instead, there was a drain of India’s wealth to Britain. The surplus was used to cover expenses incurred by the colonial government in Britain, finance British wars, and pay for the import of invisible items.
Overall, India’s foreign trade under British rule was characterized by the export of raw materials, import of finished goods, British monopoly control, and the drainage of India’s wealth to Britain.
Objective Type Questions
1.What were the primary products that India exported on the eve of independence?
A) Finished consumer goods
B) Capital machinery
C) Raw materials like cotton and jute
D) Food grains
Answer: C) Raw materials like cotton and jute
2.Which country was the major supplier to India, accounting for more than 31% of total imports?
A) China B) Ceylon (Sri Lanka) C) Persia (Iran) D) The United Kingdom
Answer: D) The United Kingdom
3.What was the nature of India’s imports during British rule?
A) Raw materials for industrialization
B) Finished consumer goods and capital machinery
C) Food grains for export
D) Luxury items for the elite
Answer: B) Finished consumer goods and capital machinery
4.What major trade route development facilitated British control over India’s foreign trade?
A) The opening of the Panama Canal
B) The construction of the Trans-Siberian Railway
C) The opening of the Suez Canal
D) The establishment of the Silk Road
Answer: C) The opening of the Suez Canal
5.With which country did India conduct limited trade apart from Britain during colonial rule?
A) China B) Ceylon (Sri Lanka) C) Persia (Iran) D) United States
Answer: C) Persia (Iran)
6.What was the primary objective of British economic policies in India with regard to foreign trade?
A) Maximizing India’s economic growth
B) Benefiting Indian industries
C) Maximizing British benefits from India’s trade
D) Promoting international trade partnerships
Answer: C) Maximizing British benefits from India’s trade
7.How did India’s foreign trade surplus benefit India directly during British rule?
A) It led to the inflow of gold and silver into India.
B) It covered the expenses of the Indian colonial government.
C) It financed India’s industrialization efforts.
D) It improved the standard of living for Indians.
Answer: B) It covered the expenses of the Indian colonial government.
8.What was the outcome of India’s foreign trade surplus under British rule?
A) Drainage of India’s wealth to Britain
B) Economic prosperity for Indian merchants
C) Rapid industrialization in India
D) Balance in trade relations
Answer: A) Drainage of India’s wealth to Britain
9.What percentage of India’s foreign trade was conducted with Britain during colonial rule?
A) Less than 10%
B) About 25%
C) More than 50%
D) None; India traded primarily with other colonies
Answer: C) More than 50%
10.Apart from finished goods, what else did India have to import in significant quantities by 1947?
A) Precious metals
B) Machinery for heavy industries
C) Food grains
D) Luxury items for the elite
Answer: C) Food grains