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British Colonial Rule in India

Updated on April 9, 2013

Colonialism was the concept developed by Karl Marx. The Marxist historians continued the concept subsequently. They mainly focused on the exploitation of Eastern Nations by the Western. According to them, colonial policies changed from time to time. It was always based on the economic interests of the Europeans. This concept was discussed in the following three phases; Mercantile Capitalism, Industrial Capitalism and Finance Capitalism.

R.P.Dutt, a Marxist historian from India wrote the book, 'India Today'. He studied and analyzed the British Exploitation of India and put forth the same in three phases of colonialism. According to him; the three phases in India were as follows;

  • Mercantile Capitalism; 1757 to 1813
  • Industrial Capitalism; 1813 to 1858
  • Finance Capitalism; 1858 to 1947

Mercantile Capitalism

It was from 1757 – 1813. In this phase, open plunder of India was carried by the British. Other Europeans were eliminated from the competition and British have enjoyed the monopoly. From 1600 to 1760, British carried the trade in putting out system. In here advances were given to the artisans to meet the raw materials. Further, the finished goods must be sold to the British company only. The company use to purchase the goods at lower costs.

The above policy was later changed as the Factory system came into being. The place of production was changed subsequently. British started purchasing only raw materials. Indian peasants were forced to grow Indigo at Bihar and Bengal. Finished goods were sold in India and in order to create and promote British market, policy of De-industrialization was initiated by the English in India.

Further, Dastak system was misused. Revenue administration was controlled. Huge amounts were collected after wars from the natives by concluding treaties.

Industrial Capitalism

This was also called as Free Trade Stage. This phase was from 1813 to 1858. In this stage the monopoly of the East India Company to trade in India was abolished. Free trade was allowed in 1813 to every company from England.

Industrial Revolution at this time was expanding in England. The capitalist class that emerged at this time in England has got influence in the parliament; they have successfully ended the monopoly of East India Company trade in India. New form of exploitation was started with this. In consequences, India became the destination for 20% of production from England.

Bipan Chandra said; “Indian Handicrafts were exposed to the fierce and unequal competition of machine made goods of Britain and faced extinction”.

Karl Marx said; “British broke up the Indian Hand-looms and destroyed the spinning-loom and in-undated in very mother country of cottons with cotton”.

Dual Tariff policy was adopted by the British to carry on de-industrialization in India. High taxes on exports were imposed; it was 67.5% on clicot textiles, 37.5% on Muslin cloth and 300% on the Indian Sugar.

Finance Capitalism

This was from 1858 to 1947. By 1860, Industrial Revolution was spreaded to the other parts of Europe and it created troubles to the British Investment. Hence, British concentrated highly in India. Huge capital was invested in Non-Manufacturing sector. It was invested in the form of loans, they received huge interest out of which defense needs were met. Huge investment was put in transportation sector and railways was developed in India. To carry the raw materials and to enhance their markets the transportation was developed.


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    • tayyabjutt profile image


      5 years ago

      thanks dear

    • shai77 profile image


      6 years ago

      This is a fascinating topic and you present it well. I gave your hub a thumbs up and marked it interesting. Thanks for the information!


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