British Colonial Rule


India is a country that has its beauty being described through the well-known industries of handicrafts and textiles. However, all of these industries were slowly destroyed hence making it hard for India to develop any further. This period is called the British Colonial Rule where there were a lot of Sectors that were Affected during the British Rule which led to the downfall of a flourishing country.

This however led to Indian citizens learning more and more about the western ways and hence the urbanization of the country took place. To this day it is quite visible how the changes have occurred and how the lives have developed.

India before British rule was economically stable, self-sufficient and prosperous. Colonisation aimed at profiting from cheap labour and surplus raw materials easily accessible in India. The country known as the golden eagle was rich in handicraft skills in areas like silk, metal, cotton, etc.


The colonial period in India saw significant changes in the aggregate output, which was less than 2% in the first half of the 20th century. This figure coupled with ½ % growth in per capita output yearly shows the major exploitation India suffered. 


The British Government never bothered to estimate India’s per capita and national income. Yet individuals like Dadabhai Naoroji, Findlay Shirras, R.C. Desai, William Digby and V.K.R.V. Rao tried figuring out India’s economic strength.


In the following segment, students will learn about the changes in the six factors of the Indian economy. This will further help in strengthening the all-around growth of young learners in the field of economics. 


Sectors That were affected During the British Rule

India before British rule flourished with wealth, agriculture and resources which were incurred by the British Government to manage their administrative expenses and wars. British transformed India into a supplier of raw materials and finished goods for cheap for 200 years. The sectors which suffered a massive blow in terms of the economy are explained below. 


1. Agriculture Sector during Colonial Rule in India 

Indian economy before British rule was primarily based on agriculture and trade based on it. Nearly 85% of the country's population was dependent on the output from agriculture directly or indirectly. Yet this sector started facing stagnation and deterioration as the production per hector was deficient. 


Again the vulnerability to climates like unpredictable rainfall or low rainfall caused the output to lower down further. British Government did not attempt to help the poor in the revival of the economy or irrigation facilities.


Furthermore, the land revenue system, the Lagaan system and commercialisation of agriculture pushed the agriculture sector to deteriorate. 


2. Industrial Sector during the British Colonisation of India 

India before British rule was prosperous in the handicraft sector, textile, production of metal and precious stone works, etc. These finished goods had a demand in the foreign market due to their fine quality and high craftsmanship. However, the British infiltrated the Industrial sector with the introduction of systematic de-industrialisation. This reduced India into an exporter of raw materials and importer of finished goods as colonisers focused on promoting the British market. 


3. Foreign Trade  during Colonisation of India 

India was known to trade quality raw materials and finished goods since ancient times. However, the restrictive policies by the British Government like tariffs affected foreign trade. This caused a downfall in composition, structure, production and volume of export. Reasons like the generation of large surplus, monopoly control and reduction of India’s handicraft value caused this tension.


4. Demographic Conditions British Policies in India

Demographic conditions during colonisation exhibited features of stagnation and backwardness in terms of economy. The birth rate and death rate as per data showed a major increase of nearly 40% and 48% per thousand respectively.


5. Occupational Conditions during the Advent of the British in India

India before British rule and after depended on agriculture which caused an issue of land availability. This caused a barrier in the economy as a majority focused on farming as a means of survival rather than an occupation for income.


6. Infrastructure during Colonisation

To understand what the colonial period was, students need to understand the condition of infrastructure in India. Under colonisation, basic amenities like railways, roads, telegram developed gradually. However, the motive behind this change was to promote British goods and exploit Indian labour.


To understand these topics in-depth, check Vedantu today which offers multiple notes on the topic impact of British colonial rule on the Indian economy. These notes are prepared under expert guidance and written lucidly to promote quality education. Download the app today!

FAQs on British Colonial Rule

1. What Were the Reasons for the Stagnation of the Agriculture Sector in India During Colonisation?

1. Zamindari or Land Revenue System 

Britishers introduced the zamindari system which allowed landowners to show their authority over the soil. Indians were forced to pay a fixed sum to the government as land revenue to cultivate the soil. They were paying rent despite the economic disparity, which further raised social tension and misery. There were also systems like Ryotwari and Mahalwari, which led to the downfall of the agricultural sector in India.

2. Limited Resources

As tillers had to pay a substantial amount of rent known as ‘Lagaan’, they lacked a surplus for agriculture. Farmers needed extra funds to invest in fertilisers or irrigation, which became impossible—thereby lowering the production and economy of India.

3. Commercialisation of Agriculture

This led to a relatively higher yield of cash crops like indigo, cotton, etc. Commercialisation led to a shift from self-consumption to profit-making, causing an issue for the poor masses.

2. What Were the Policies Applied By the British to Destroy the Handicraft Industry in India?

Britishers followed three policies to deteriorate the Indian Industrial sector. They were:

Tariff Policy 

Britishers followed a discriminatory policy that allowed tariff-free exports of materials from India. This was the primary reason behind the downfall of industries in India as the British imported tariff-free products for promotion.

Machine-made Products

British started selling machine-made products that were cheap and better in quality than hand-made goods. This caused a barrier in labours income as competition forced many businesses in India to shut down.


British introduced a railway system in India, increasing demand for cheap industrial products which were easily accessible. This caused a downfall in the Indian handicraft market as people supported machine-made goods.

3. What is Systematic De-industrialisation Practised During British Rule?

Systematic de-industrialisation referred to the status of the industrial sector during colonisation which led to the decay of the Indian handicraft industry and the growth of modern industries.

The reason behind the downfall of industries was majorly due to-

Britishers were trying to exploit India's raw materials and primary products by force. This was done to fulfil the rising needs of industries during the emergence of the British era. 

Boosting of the British market by importing expensive goods at low tariff 

The British Government incurred huge expenses to fight wars with Indian wealth by implementing their imperialism policy.

4. What is the meaning of capital good industry and how was it affected by British Colonial Rule?

Capital goods industries are those industries that produce various machine tools which are quite helpful in the production of articles for current consumption. It was during British rule that there was hardly any presence of capital goods industry that would show support to the slow industrial development that was taking place in India. British rulers also did not pay any attention to the setup of these industries that were formed because they wanted Indian citizens to rely on them completely for the supply of capital and heavy goods. The British rulers wanted this to happen so that they could take down the Indians and start their own rule.

5. What was the state of the pre-colonial industrial sector in India before the British Colonial Rule?

Before the British Colonial Rule, India was highly known for its handicraft industry that had flourished. This industry due to its high demands also had worldwide supporters. Indian craftsmanship was highly applauded for the wonderful works that were done before the British Colonial Rule. The textile industry was one of the most important industries both inside and outside the country. Multiple articles were woven with the help of wood, cotton, and silk that were in high demand. Various metals industries and marble work industries were also beginning to work out to accelerate the growth of India and develop as a country. However, it was seen that the British Colonial Rule made sure this did not happen.

6. What was the new land system that was introduced during the British Colonial Rule?

The new land system during the British Colonial Rule had serious impacts on the Indian economy. During the British Colonial Rule, the administrators used to impose land revenue at high rates and also expected a larger return from the land. Thereafter, the British government introduced the land settlement which was done in the year 1793. Permanent settlement was observed in areas of Bengal and other attached areas where the zamindar system was introduced which allowed the zamindars also called the landowners to collect the land revenue from the tenants and send them to the British rulers. This hence impacted the peasants as they were being exploited by both the land rulers and the British rulers.

7. How did British Colonial Rule affect the urban cities and urbanization?

The following events were seen during the British Colonial Rule that affect the urban cities and their urbanization:

  1. The commercial companies that were owned by European countries were set up in various areas in India such as in Panaji where the Portuguese set up their industries in the year 1510.

  2. There was change observed in the mid-eighteenth century as the commercial centres in Surat, Dhaka, and other places which had flourished in the 17th century declined when the trade was shifted to other places.

  3. In 1639 the company agents settled in Madras and Bombay was handed over to the company in 1661 by the Portuguese rulers.

  4. After the Plassey battle in 1757 when the trade of English East India Company had extended the colonial port cities such as Bombay, Calcutta and Madras were considered to be the new economic capitals.

8. Why is British Colonial Rule - Sectors which were Affected during the British Rule considered to be one of the important events in history and how does Vedantu explain the same?

By learning about the British Colonial Rule - Sectors which were Affected during the British Rule students get an idea about how ancient India was like and how India was able to overthrow the rulers and start its process of urbanization. This topic also helps students to remember all those leaders in India who contributed to the freedom that is being experienced now. Vedantu has provided a detailed explanation on the impact of the British Colonial Rule - Sectors which were Affected during the British Rule and how various sectors were able to overcome it. Vedantu NCERT Solutions for Commerce will also provide a detailed view on this topic.