Three phases of British exploitation
The economic exploitation of India under the British rule evolve over time in three major phases are
- Mercantilism
- Free Trade Capitalism
- Finance Capitalism Each phase changes reflect in British economic interest but core objective remains same i.e. maximum extraction of wealth from India.
Mercantilism Phase
The first phase i.e. Mercantilism roughly between 1757 to 1813 began after the Battle of Plassey when English East India Company gain the political control. In simple terms mercantilism meant that Britain wanted to accumulate wealth by controlling trade. The company collected land revenue from peasants and used that money to buy Indian goods like textile which was exported to Europe. This system is often called investment but in reality it was exploitation because Indians were not pay fairly and India's wealth was being used to purchase the goods that were sold in England. At same time Indian artisan suffers because British policy supports export of Indian goods at the cheaper price. This phase marked the beginning of drain of wealth from Indian to Britain.
Free Trade Capitalism phase
The second phase of the free trade capitalism (1838 to 1858) started after the Charted of 1830 and ended with the companies monopoly over Indian trade. Now India was open to British private merchant and industries. The nature of exploitation change. Britain, which has undergone the Industrial revolution began exporting machine made goods to India. Indian handicrafts specially textile could not compete with cheap factory products from Britain leading to deindustrialization in India. Many artisans last their livelihood and were forced into agriculture increasing pressure on land. At the same time India was turned into a supplier of raw materials like cotton, indigo and jute for British industries thus India become market for British goods and source of raw material for British industries while its own industry decline.
Finance Capitalism phase
The third phase of finance capitalism began when British crown took direct control of India after the revolt of 1857. In this phase the focus shifted from trade to investment and financial control. British capital was invested in railways, plantations, banks and infrastructure mainly to secure British interests. These projects were financed through loans and India had to pay heavy interest which further drained its wealth. There was a continuous home charges system where India pay for British administration, pension and war.