Question

Describe the impact of the First World War on Indian industries.

Answer 1

Hint: The first world war affected the Indian economy very badly. India was not attached to it directly but very much indirectly through the British colony. The first world war cost Indian economy nearly bankrupt and also resulted in a major loss in casualties.

Complete answer: Soon after the end of the First World War great depression occurred in the European Nations which had its implications in India too. The great depression led the British government in India to order for a protective trade policy which was in the interest of England and made the Indian economy suffer and deteriorate. Agriculture and sea-based trading were drastically crippled and reduced. Policies which were adopted by the British governance in India had only favoured them and led to high inflation in India on various goods and services. High inflation also resulted in the very high taxes laid by the government which made Indian suffer very badly. The worst-hit section were the poor farmers and peasants who had to sell all their possessions in order to survive. There was a sharp increase in demand for goods from India to England, however, there were inconveniences in the Indian industries because of the shortage of inputs that were imported from Britain and Germany. Although inflation benefited the Indian industries as the industrial prices nearly doubled after the war. Export of cash crops also suffered due to the loss in the European market. This decline in the British goods benefited the domestic manufacturing sectors such as cotton in India.

Note: Similarly the Steel sector such as the ailing Tata Steel Mills benefited a lot from the laws in European markets as now they form a contract to supply rails to the Mesopotamian campaign. Therefore to conclude farm prices rose and resulted in inflation while industries and particularly the Indian capitalists benefited in some ways at least.