Characteristics of Pre-Colonial economy of India

The British East India, Company got a legal Charter for trade from the British crown in 1600 and shortly thereafter this,trading company started conquering India. The conquest’s began in 1757 with defeat of Nawab of Bengal by Robert Clive.

The East India Company ruled India for a century from the decisive Battle of Plassey . when India fought a war of Independence. The British defeated the Indians in this war and in 1858 Queen Victoria assumed the responsibility of direct rule over India. The rule of East India Company started.

Characteristics of Pre-colonial Economy are :

Agriculture: Agriculture operations were carried on in India by subsistence farmers, organized in small village communities. Village was more or less self-sufficient economic unit and its business contacts with the outside world were limited to payment of land revenue (generally in kind) and the purchase of a few necessary things from the town nearby.

The farmer raised only those crops which he needed for his own use and shared the same with the village artisan who supplied him’ with simple manufacture that he needed for his do Mastic consumption.

Means of communication were of a primitive type. Therefore trade in agricultural produce, was somewhat limited. The farmer usually raised enough produce to feed himself and the non-agricultural members of the village community.

If his crop yielded more than the consumption needs, due to  favorable climatic conditions, he stored that surplus for use in the lean years. Storage °flood grains was a common practice among the pre-colonial agriculturists and constituted, under these conditions, the only remedy against famines.

This pattern of agriculture continued throughout the medieval times. However, towards the end of the I V century the village communities began to break up, under pressure from new forces which imparted dynamism to the Indian rural economy. This happened mainly because of two factors.

  1. The change in the property relations brought by the introduction of new forins of land tenure
  2. The development of an active export trade in agricultural produce of India. The contact with the West.through the establishment of the British rule was responsible for both these developments.


In spite of the fact that the Indian villages were largely self-sufficient units and the means of communication were primitive. India enjoyed extensive trade both within the country and with other countries of Asia and Europe. A balance of the imports and exports was maintained.

The items imported into India were pearls, wool, dates, dried fruitsand rosewater from the Persian gulf, coffee, gold drugs and honey from Arabia, tea, sugar and silk from China, gold musk and woolen cloth; metals like copper, iron and lead, paper from Europe.

The main items exported from India were cotton textiles. Besides cotton textiles which were famous the world over, India also exported raw silk, indigo, opium, rice, wheat, sugar, pepper and other spices, precious stones and drugs.

The major feature of Indian trade in pre-colonial times were

  • A favorable balance Oracle and
  • A foreign trade most suitable to the level of manufacturing in India.

A favorable balance of trade meant an excess of exports over imports i.e.India exported more than it needed to import. Since the economy was on the whole self-sufficient in handicrafts and agricultural products, India did not need foreign imports on a large scale and continued to enjoy a healthy trade.

Secondly, India’s foreign trade suited its requirements very well. In other words, the commodity pattern, so important to any country’s foreign trade, was in India’s favor. India exported the items it specialized in; and imported the ones it needed:

One, major change that occurred in India’s foreign trade from the pre-colonial to colonial times was in its commodity pattern. Although India continued to have an export surplus, the pattern of foreign trade turned upside clown:

For instance, from the exporter of cotton textiles India was converted into an importer of cotton textiles, thereby running India’s rich traditional handicrafts.

Handicraft Industries: 

India was a land of extensive manufacturers. Indian artisans were famous for their skills the world over. In fact the reason for India’s favorable foreign trade was its excellence- in indigenous production. India indulged in a large scale manufacture of cotton and silk fabrics, sugar, jute; dyestuff, mineral and metallic products like arms, metal wares and oil.

Towns like Decca and Murshidabad in Bengal Patna in Bihar Swat and Ahmadabad in Gujarat, Japura, Varanasi, Lucknow and Agra in U.R, Multan and Lahore in the Punjab, Masulipatnam and Visakhapatnam in Andhra Bangalore in Mysore and Coimbatore and Madurai in Madras were flourishing centers of textile industry. Kashmir specialized in woolen manufacturers.

Maharashtra, Andhra and Bengal were prominent centers of shipbuilding industry. India’s ships were bought by many, European companies for their use.

India towards the end of the 18th century was, undoubtedly one of the main centers of world trade and industry. This status of India was completely destroyed under colonial times. Its beginnings can be traced to the after-math . of the industrial Revolution in England.

The machine made cloth of England began to replace the indigenous manufactures. India’s artisans were forced out of production. It was their pressure from the British goods which led to the decline of the India’s traditional centers of economic activity listed above. The number of weavers also declined.

Two aspects of the gradual expansion of British occupation of India deserve attention. The experiences gained by the British in one region of India were either extended or modified in other religions and this learning through practice made them quite powerful in dealing with the problems of large colony like India.

The changes in British society demanded a different approach to satisfy the interests of emerging social groups in Britain. The essence of British colonial policies in India was determined by the dynamics of society which witnessed many changes in Britain.

The modem British society progressed through stages like mercantile capitalism to industrial capitalism and from competitive industrial capitalism to monopoly industrial capitalism.

The interests of mercantile British capitalism lay in trade with India, the interest of industrial capitalism were on the other hand, market oriented in which, the Indian colony was to provide raw material and buy manufactured goods from Britain. Thus social and economic changes in Britain directly influenced British colonial policies in India.

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