Was the British Raj good or bad for the Subcontinent?

The Mughal emperor Shah Alam hands a scroll to Robert Clive, the governor of Bengal, which transferred tax collecting rights in Bengal, Bihar and Orissa to the East India Company on 12 August 1765.

The following piece is a short essay that I wrote at the end of year 12 as part of a geography assignment. It details some of tactics used by the British Empire to rob South Asia of its riches.

Please note that the numbers in red boxes are footnotes where as those in regular boxes are references.

The question of the British Empire’s involvement in South Asia and other parts of the world is one that is often debated. American Historian Will Durant wrote, in 1930, upon visiting India:

The British conquest of India was the invasion and destruction of a high civilization by a trading company [The British East India Company] utterly without scruple or principle, careless of art and greedy of gain, over-running with fire and sword a country temporarily disordered and helpless, bribing and murdering, annexing and stealing, and beginning that career of illegal and “legal” plunder which has now [1930] gone on ruthlessly for one hundred and seventy-three years” [1]

On the other hand, Scottish historian Niall Ferguson writes:

“For better or worse — fair and foul — the world we know today is in large measure a product of Britain’s age of empire. The question is not whether British imperialism was without blemish. It was not. The question is whether there could have been a less bloody path to modernity. Perhaps in theory there could have been. But in practice?” [2]

It is clear to see that opinions differ wildly when it comes to the British Empire and whether it hindered development or facilitated development. In this essay I will attempt to provide an overview of Britain’s involvement in India (1757-1947)[1] and determine whether the Empire’s involvement was necessary for India to modernize. I will primarily be focusing on the economic impacts of British rule, however it is important to note that British involvement had profound effects in all areas of development, and for the purposes of this essay ‘India’ will also encompass both modern day Pakistan and Bangladesh[2].

Share of the World’s GDP (%) from 1600 to 1950 [3]

Angus Maddison, Development Centre Studies The World Economy Historical Statistics: Historical Statistics, 2003, p.261

Thanks to Angus Madison’s extensive work on the world’s economic history, we now know that in the year 1600 during the Mughal era[3], India’s Gross Domestic Product (GDP) accounted for 22.4% of the World’s economy. This increased to 24.4% in 1700, making India the largest economy in the world ahead of both China and Western Europe. Meanwhile, Britain accounted for a measly 1.8% (1600) and 2.9% (1700). However, by the year 1820, after 63 years of company rule, Britain’s share rose to 5.2% while India’s share fell to 16%. This trend of British economic growth and Indian economic decline continued and by 1950, 3 years after the end of the British Raj, India was a left a shadow of its former glory at 4.2%.

Similarly, India was also a leader in global manufacturing, before British rule, with key industries of: textiles, shipbuilding, and steel. Mughal goods and cash crops were sold throughout the world, including Europe[4]. European powers had to export vast amounts of gold and silver to India to pay for Mughal imports as there was little demand for European products in India – Mughal India was largely self-sufficient – resulting in a significant trade imbalance[5] [4]. This period of industrial growth is often referred to as being a state of proto-industrialization like that of 18th century Western Europe prior to the Industrial revolution. By the year 1750, India accounted for 24.5% of the global manufacturing, however in 1800, after only 43 years of Company rule, India’s share fell to 19.7% and by 1938, it was left at 2.4%[6] [5]. Furthermore, economic historian Paul Bairoch highlights how India had a higher GNP per capita than Europe up until the late 18th century [6].

So the question must be asked: What happened during those 190 years of British rule?

Inglorious Empire: What the British Did to India (2017), written by Indian Congress MP Shashi Tharoor, outlines various methods employed by the British during their era of rule over India that have contributed to its economic decline. Tharoor also mentions Britain’s impact in other spheres of life within India, including: law, politics and media. However, for the purposes of this essay we will examine Tharoor’s explanations for how the British went about destroying India’s key industries resulting in the subcontinent’s decline as a global economic superpower [7].

For centuries, India had been an important player in global trade. The Indian Subcontinent had been conducting international trade from as early as the 1st century according to Periplus of the Erythraean Sea which describes navigation and trading opportunities from Roman Egyptian ports, such as Berenice Troglodytica, along the coast of the Red Sea, and others along the Horn of Africa, the Sindh region of modern day Pakistan, along with south-western regions of India during the 1st century [8]. However, Tharoor brings to light Britain’s efforts in limiting India’s trade ultimately replacing the Subcontinent’s role in global trade:

“British-based businesses simply could not compete [with Indian-based businesses], and so they petitioned Parliament for a ban on Indian shipbuilding. The first legislative act in their favour came in 1813 with a law that prohibited ships below 350 tonnes from sailing between the Indian colonies and the United Kingdom. That took 40 per cent of Bengal-built ships out of the lucrative India-England trade. A further Act in 1814 denied Indian-built ships the privilege of being deemed ‘British-registered vessels’ to trade with the United States and European continent. Though they could still, in theory trade with China, that sector had become unprofitable, since the previous practice had been to sail from Calcutta with Indian goods to China, load up on tea there for London, and return to Calcutta with British goods; with the London sector banned to them, these ships could only sail from Calcutta to China and back, but there was no market for Chinese goods in India (Indians were not yet tea drinkers) and the ships, denied access to London, often had to return empty”

During the early 18th century, India enjoyed a 25% share in the global textiles industry [9]. British cloth manufacturers couldn’t compete with the cheap prices and low labour costs of India. However, once the Company took over, East Indian Company Soldiers went about destroying the looms of weavers[7] [10], lowering the supply and production of goods, as well as imposing tariffs of 70-80% on Indian textiles, making exporting unviable. As a result, Indian textiles were no longer cheaper than their British counterparts, which then began to flood the Indian market. Indians couldn’t impose retaliatory tariffs on British goods since the British controlled both the ports and the government. In turn, the Indian textile industry was sent into decline meanwhile British imports soared to over 1 billion yards of cotton by 1870 [11]. It is important to note that while India no longer manufactured cotton goods the subcontinent still grew cotton to send to Britain. And so began a trend of shipping primary[8] goods to Britain for manufacturing, into secondary[9] goods, and then back to India and the rest of the world to be sold; essentially moving India away from a secondary sector economy into a primary sector economy. Meanwhile kick starting the Industrial revolution in Britain. Tharoor highlights how this method of moving secondary industry from India to Britain was applied across the board, thus explaining Britain’s rise as a global superpower at the expense of India’s economy.

In addition, many artisans whom were forced out of the secondary economy went into agriculture. This huge influx of disenfranchised people into the agricultural sector decreased the rural wages thus forcing rural areas into poverty. During the Mughal era, real wages and living standards in Bengal and South India were higher than in Britain [12]. In fact, during the early 17th century, the primary sector accounted for 64%[10] of India’s workforce with the secondary and tertiary[11] sectors accounting for 11% and 25% respectively [13] each contributing to 52% (primary), 18% (secondary) and 29% (tertiary) of India’s economy [14]. However, during British rule, the secondary sector’s contribution fell to 11% during the early 20th century. Thus, highlighting the Subcontinent’s shift from a secondary focused economy to a primary focused economy. If we were to take Rostow’s model[12] into account, then India was, in effect, being forced to move away from stage 2 (developing manufacturing industry on the verge of intense activity) and back to stage 1 (subsistence farming or hunter-gathering).

On the contrary, B. R. Tomlinson presents the idea that the textiles industry’s decline was instead a direct result of the Industrial Revolution [15]. Indian textiles were handmade just like the rest of the world prior to the advent of machinery. Therefore, it could instead be argued that the textiles industry in India was wiped out by the technological superiority of Britain. Thus, Indian weavers were victims of technological obsolescence instead of deliberate British policy. Tharoor notes, however, that had India not been colonized, “the weavers would’ve been replaced within 50 years by Indian textile mills using modern machinery”. It is of course no doubt, that even in a free India, Indian textiles would’ve not been able to compete with the mass-produced textiles in Britain. That being said, a free India would be able to impose tariffs on British imports thus softening the blow against India’s economy. Furthermore, India would also be able to import technology[13] and compete with Britain’s textile industry. Therefore still experiencing a decrease in its share of the global economy but not the dramatic economic decline we saw during the late 18th century to early 20th century.

One often cited argument during debates about British colonialism is the idea that Britain helped India modernize by building infrastructure in the form of railways and irrigation systems. By the late 19th century, Britain had built, what was then, the world’s 4th largest railway network in India[14]. This totaled 25,495 km of railway in 1880 [16] and radiated inland from the major port cities of Bombay, Madras and Calcutta. Thus, significantly speeding up the transport of primary materials from their inland plantations and mines to the coastal ports where they would then be shipped abroad, primarily to England, to be used in manufacturing.  Furthermore, Britain also heavily invested in irrigation infrastructure and by 1900 India had the world’s largest irrigation system[15]. Take, for example, the Ganges canal which reached 560 km from Haridwar to Cawnpore, suppling thousands of miles of distribution canals. Or even the case of Assam, which in 1840 was a jungle but by 1900 had around 4 million acres under cultivation. By 1947, about 22 million hectares of British India was under cultivation [17]. In North-western British India region alone, 2.2 million hectares of previously barren land was irrigated by the 1940s, most of which is now part of Pakistan. British historian David Gilmour also points out the impact of the new irrigation systems:

“By the 1870s the peasantry in the districts irrigated by the Ganges Canal were visibly better fed, housed and dressed than before.” [18]

There, of course, is no denying the legacy of British infrastructure and its significance in shaping the modern day economy of the Indian Subcontinent.  Take the modern state of India which is now among the one of the fastest growing economies in the world (BRICS[16]) thanks largely in part due to its inherited infrastructure from the British Raj. Today, Indian railways provide a net income of US$930 million [19]. Meanwhile, irrigation systems that have since been expanded[17] help improve food security, improve agricultural productivity and create rural job opportunities. In addition, dams that are used for irrigation projects also produce electricity, provide drinking water supplies to a growing population, control floods and prevent droughts. This has helped India become the world’s 2nd largest agricultural producer, behind China, with a total agricultural output worth US$354 billion. Similarly, both Pakistan and Bangladesh are ranked at 7th (US$65 billion) and 19th (US$31 billion) respectively [20].

In conclusion, it is clear to see that British imperialism displaced the Indian Subcontinent from its number one position in the global economy. Even today, India, Pakistan and Bangladesh collectively hold a share of 8.344% (2015) of the world’s global GDP [21] compared to the Mughal era height of 24.4%. However, there is also no denying that British colonial era infrastructure has played a big role in the Subcontinent’s current economic growth. That being said, this current economic growth has occurred in the last 72 years since partition in 1947. Therefore, it should be attributed to the efforts made by the native governments, and their expansions of British infrastructure, rather than British colonial rule itself. Had Britain truly proved to be the catalyst of Indian economic growth then there should never have been an economic decline during British governance in the first place. Furthermore, British governance may not have been needed in the first place to provide infrastructure due to the fact that many countries did not need to be colonized by Britain in order to build railways[18]. Therefore, it is safe to say that overall, British imperialism had negatively affected economic development in the Indian Subcontinent despite its investment into Indian infrastructure[19].


  1. Will Durant, The Case for India, 1930, p.7
  2. Niall Ferguson, Empire: How Britain Made the Modern World, 2003
  3. Angus Maddison, Development Centre Studies The World Economy Historical Statistics: Historical Statistics, 2003, p.261
  4. Karl J. Schmidt, An Atlas and Survey of South Asian History, 2015, p.100
  5.  Jeffrey G. Williamson and David Clingingsmith, India’s Deindustrialization in the 18th and 19th Centuries, 2005, p.34
  6. Paul Bairoch, Economics and World History: Myths and Paradoxes, 1995
  7. Shashi Tharoor, Inglorious Empire: What the British Did to India, 2017, ch.1
  8. Unknown, Periplus of the Erythraean Sea, 40-70 AD
  9. P. Bairoch and M. Levy-Leboyer, Disparities in Economic Development since the Industrial Revolution, 1981
  10. William Bolts, Considerations on Indian Affairs: Particularly Respecting the Present State of Bengal and its Dependencies, 1772
  11. Jon Wilson, India Conquered: Britain’s Raj and the Chaos of Empire, 2016, p.321
  12. Prasannan Parthasarathi, Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600–1850, 2011
  13. Kaveh Yazdani, India, Modernity and the Great Divergence: Mysore and Gujarat (17th to 19th C.), 2017, p.120
  14. Shireen Moosvi, The economy of the Mughal Empire, c. 1595: a statistical study, 1987
  15. B. R. Tomlinson, The Economy of Modern India 1870-1970, 1996, p.15
  16. John Hurd, Railways, 2005
  17. United Nations, AQUASTAT – FAO’s Information System on Water and Agriculture [online], Available at: http://www.fao.org/nr/water/aquastat/countries_regions/ind/index.stm, 2015
  18. David Gilmour, The Ruling Caste: Imperial Lives in the Victorian Raj, 2007, p.9
  19. Ministry of Railway, Indian Railways Budget Documents 2018–19, 2018
  20. The Economist, World in Figures – Agriculture Rankings [online], Available at: https://worldinfigures.com/rankings/index/103, 2015
  21. Economy Watch, GDP Share of World Total (PPP) Data for All Countries [online], Available at: http://www.economywatch.com/economic-statistics/economic-indicators/GDP_Share_of_World_Total_PPP/, 2015

[1] Note that this time period also includes British East India Company rule, which occurred between 1757 and 1858, following which the Company’s remaining powers were transferred to the Crown following the Indian Rebellion of 1857.

[2] In 1947, the Indian Subcontinent was partitioned into the modern states of India and Pakistan. East Pakistan then seceded from West Pakistan in 1971, forming the modern state of Bangladesh.

[3] Founded in 1526 by Emperor Babur, the Mughal Empire went on to control the majority of the Indian sub-continent, except for its southern tip, by 1700, before its eventual decline and fall in 1857.

[4] In early modern Europe, there was significant demand for products from Mughal India, particularly cotton textiles, as well as goods such as spices, peppers, indigo, silks, and saltpetre (for use in munitions). European fashion, for example, became increasingly dependent on Mughal Indian textiles and silks.

[5] The Mughals could easily afford European goods but Europeans couldn’t easily afford Mughal goods.

[6] Note that this was an increase from 1.4% in 1913 which can be explained by the fact that India experienced multiple famines from 1870 to 1921 which significantly impacted population growth and ultimately had an effect on India’s manufacturing industries.

[7] According to many contemporary accounts, Company soldiers may have even gone about breaking the thumbs of Indian weavers.

[8] Primary refers to industry, such as mining or agriculture, which is concerned with obtaining or providing natural raw materials for conversion into commodities and products for the consumer.

[9] Secondary refers to industry that converts raw materials provided by the primary industry into commodities and products for the consumer.

[10] During this time, 65-90% of Europe’s workforce was based in the primary sector.

[11] Tertiary refers to industry concerned with the provision of services.

[12] Rostow’s Stages of Economic Growth model is one of the major historical models of economic growth. It was published by American economist Walt Whitman Rostow in 1960. The model postulates that economic growth occurs in five basic stages, of varying length.

[13] The Mughal Empire used and produced an extensive array of gunpowder weaponry, gunpowder of course being invented in 9th century China, and therefore Indians were indeed capable of attaining and mastering the use of foreign technology.

[14] India still holds 4th place with a total of around 65,000 km of railway, the majority of which was built after independence.

[15] Much of the increase in irrigation during the British colonial era was targeted at dedicated poppy and opium farms in India, for exports to China.

[16] BRICS is the acronym coined for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.

[17] India’s irrigation had expanded to a potential covered crop area of 90 million hectares between 1947 and 1995.

[18] Thailand had built its first railway in 1894, known as the Paknam Railway, despite never being colonised by European powers.

[19] Most of these infrastructure projects were built to serve British business interests in the first place.