Colonial Exploitation of Indian economy, prior to the British Raj in India, was controlled and managed by village communities, which consisted of farmers and the functionaries. While the farmers were fully engaged in crop farming or Cattle farming, the functionaries provided essential services like that of blacksmiths, goldsmiths, Washer-men and shoe-makers.  Although agriculture was subsistence base (depended on rain), cultivators enjoyed the ownership rights.

There were no intermediaries (like Zamindars of the Colonial period) between the State and the farmers who had to pay a reasonable amount as land revenue directly to the king. Rural India’s life was a portrait of prosperity and stability. It was so Bernier, the famous French traveler, described Bengal in 17 century as “richer than Egypt” producing enough for self- consumption and exporting in abundance.

Industry was dominated by handicrafts. However, it had got a worldwide reputation of producing quality products like ‘Decca Muslin’. Export consisted of finished products, imports were largely of gold and silver.

Must Read: How East India Company Established British Empire in India? Explained.

However colonial policies of British Raj, which were intended to exploit the Indian economy as fully as possible, fully reversed the composition or output, as well as the composition of exports and imports, leading to a severe damage to the pace of growth of Indian economy. How did the Britishers achieve their intended goal of subjecting Colonial Exploitation of Indian economy to such an exploitation can be comprehend by the ways and mans they chose:

Colonial Exploitation of Indian Economy – Agriculture Sector

Two factors, invented and implemented by the colonial masters of India, can be held responsible for the backwardness and stagnation of Indian agriculture during the British rule:

Also Read: Industries Contributing to Indian Economy

Land Revenue System Devised by the British Raj:

A unique system of land revenue was invented by the British Raj with an intention to draw maximum benefit from the Indian agriculture and in the process destroying it. This system was popularly termed as the Zamindari system of Land Revenue. This system functioned at three levels:

(a) The Zamindars were made, by their colonial masters, permanent owners of the soil,

(b) it was the responsibility of Zamindars to pay a fix amount to their colonial masters as land revenue, and

(c) Zamindars were given a free hand in extracting as much amount from the tillers of the soil as they could. In this way they set up a triangular relationship among the government, the owner of the soil and the tiller of the soil. The direct result of this land revenue system was that the Zamindars became the cruellest exploiters of the tillers of the soil. They frequently raised the land revenue without caring for the miseries of the tillers of the soil.

Eventually tillers became landless labourers and lost the interest in agriculture. However, they could not desert agriculture because there was no alternative means of subsistence for them.

Also Read: Major Crops of India

Forced Commercialisation of Agriculture

The colonial masters forced the farmers to Shift cultivation from the conventional subsistence crops (like rice and wheat) to the commercial crops (Indigo in particular), because Indigo was in great demand in Britain in textile industry for dyeing and bleaching. It resulted in the farmers’ helplessness to be at a mercy of landlords because they became dependent on them for cash to buy food. Earlier farmers would grow grain for their family consumption but this forced shift in crop cultivation completely ruined them.

Under the British rule the Zamindars started to exploit agriculture as a source of un-earned income, the zamindar never invested, rather unfortunately, this income in agriculture. They wasted it on their luxurious lifestyle.

Colonial Exploitation of Indian Economy – Industrial Sector

Industrial sector in India, prior to the British rule, implied predominance of handicrafts which were systematically destroyed by permitting tariff-free import of machine made goods from Britain. However, they placed a heavy duty on export of Indian handicraft products. As a consequence while the British products started pouring in the Indian markets, the handicraft products of India began to lose their domestic as well as foreign markets.

One important factor of the decaying of handicraft in India was the end of princely courts due to the hold of the British rule. Nawabs, rajas, princes and emperors formed the princely classes which used to patronise the handicrafts that enabled this industry in acquiring in international reputation. This ended with the end of this princely class.

Must Read: Phases of British Rule in India

Colonial Exploitation of Indian Economy – International Trade

Prior to the British rule India was a well known exporter of finished goods like fine cotton, silk, textiles, iron goods, wooden goods, ivory work and precious stones. India exported these items to different countries. However, since India was being ruled as a British Colony, exports and imports of the country came under monopoly control of the colonial masters. They directed more than 50 % of India’s international trade towards Great Britain. In the process India became net exporter of raw materials and primary products like raw silk, cotton, wool, jute, indigo, sugar, etc. And not only this, it became a net importer of finished goods produced by British industry. India’s imports consisted of cotton, silk and woolen clothes besides several kinds of capital goods produced in Britain. This is the most explicit example of the direct Colonial exploitation of Indian economy by the colonial masters.

Read Only: Drain of Wealth – British Colonialism and Economic Impact


  1. Aansu aati hai khoon khaul uthta…jab aisey blogs parti hun….its time to understand our values n try to bring back those golden days. . ..I love my country Hindustan….they had ruined our resources but we still have potential..we people just need unity …

  2. How different:if so,in which way, were the three systems of revenue (zamindari,ryotwari, mahalwari) introduced by the British?


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