What the Agencies and Indian Mills Produced
Industrial growth in India followed a peculiar pattern. The European Managing Agencies were interested in products for export, not for sale in India — they set up tea and coffee plantations (acquiring cheap land) and invested in mining, indigo and jute.
When Indian businessmen set up industries in the late nineteenth century, they avoided competing with Manchester in the Indian market. Since yarn was not a major British import into India, the early Indian cotton mills produced coarse cotton yarn (thread) rather than fabric. This yarn was used by Indian handloom weavers or exported to China.
Swadeshi and the Shift to Cloth
By the first decade of the twentieth century, changes affected the pattern of industrialisation. As the swadeshi movement gathered momentum, nationalists mobilised people to boycott foreign cloth, and industrial groups pressed the government for tariff protection. From 1906, the export of Indian yarn to China declined (as Chinese and Japanese mills flooded that market).
So Indian industrialists shifted from yarn to cloth production: cotton piece-goods production in India doubled between 1900 and 1912.
The First World War Boom
Till the First World War, industrial growth was slow — but the war created a dramatically new situation. With British mills busy with war production, Manchester imports into India declined, so Indian mills had a vast home market to supply. As the war continued, Indian factories were called on to supply war needs — jute bags, cloth for uniforms, tents, boots and saddles. New factories were set up, old ones ran multiple shifts, and industrial production boomed.
After the war, Manchester could never recapture its old position in the Indian market. Unable to modernise and compete with the US, Germany and Japan, Britain's cotton exports collapsed, and within the colonies local industrialists consolidated their position, capturing the home market.
Questions and Answers
Q1. Why did the early Indian cotton mills produce coarse yarn rather than cloth? Ans. Indian businessmen avoided competing with Manchester in the fabric market. Since yarn was not a major British import, the early mills produced coarse cotton yarn, which was used by Indian handloom weavers or exported to China.
Q2. How did the swadeshi movement affect Indian industry? Ans. The swadeshi movement mobilised people to boycott foreign cloth and pushed industrial groups to demand tariff protection. This helped Indian mills, which increasingly shifted from yarn to cloth production.
Questions and Answers (continued)
Q3. Why did industrial production in India increase during the First World War? Ans. With British mills busy with war production, Manchester imports declined, giving Indian mills a vast home market. Indian factories also supplied war needs — jute bags, uniforms, tents, boots and saddles. New factories opened and old ones ran multiple shifts, so production boomed.
Q4. Why could Manchester not recapture the Indian market after the First World War? Ans. After the war, Britain could not modernise or compete with the US, Germany and Japan; its cotton production collapsed and exports fell. Meanwhile Indian industrialists had consolidated their position and captured the home market.