The history of modern industrial development in India dates back to about last 150 years which got acceleration during the post-independence period.
The first charcoal based iron smelting was attempted in 1853 which failed by 1874. The first successful adventures were in the field of textile industry, i.e. cotton press by a Parsi C.N. Dewar at Mumbai in 1854 and a jute spinning mill by George Acland at Risra (near Kolkata) in 1855. By 1860 ten other cotton mills were started in Mumbai.
The real expansion in cotton textile industry was noticed during 1870's following the spurt in demand in the wake of American civil war. By 1875-76 the number of mills rose to 47, of which about 62 per cent were located within the city of Mumbai (21 per cent in Bombay Presidency).
The laying of first rail line between Mumbai and Thane in 1854 proved beneficial in this context. Uptil 1913-14, before First World War, the number of cotton textile mills rose to 271 with total employment of 2, 60,000.
The progress was not very encouraging in case of jute textile industry. The second jute mill was set up in 1859 with spinning and weaving facilities. Two more mills were added by 1862.
A spurt came during 1869-1884 with the addition of 23 new mills accounting for an average daily employment of 47,863. By 1913-14 the number of jute mills increased to 64 which provided average daily employment to 2, 19,288 people. Majority of these mills were located in and around the city of Kolkata. The owners were exclusively Europeans (British).
In .iron and steel industry the beginning was more delayed. It commenced with the functioning of Bengal Iron Works Ltd. in 1874 at Kulti. It was shut down in few years and was revived in 1881. The real development was initiated with setting up of Tata Iron and Steel Company at Jamshedpur in 1908. In 1913-14 the company produced 1, 55,000 tons of pig iron and 78,000 tons of steel ingots.
The first paper mill of the country was started at Ballyganj near Kolkata in 1870. Two more paper mills in Bengal and one at Lucknow (Uttar Pradesh) were started between 1902 and 1905. Some woolen textile mills were set up at Kanpur (Uttar Pradesh), Chariwal (Punjab) and Bangalore (Karnataka) during 187 to meet the requirements of military, police and railway personnel. In 1902 there were 27 breweries, nearly all European owned, employing about 6,500 people to meet the demand from the military and resident European civilians.
The impact of World Wars, on the whole, was beneficial for the growth of Indian industries, because India became the source of supply for allied operations east of Suez due to obstruction in foreign sources of supply.
The government adopted liberal policies and even offered protection to some industries. Consequently between 1922 and 1939 the production of steel increased from 1.3 lakh tones to 10.42 lakh tones; of cotton textile from 1,714 million meters to 4,016 million meters; of paper from 24,000 tons to 67,000 tones; of sugar from 25,000 tones to 9,31,000 tones. During this period the number of factories also increased from 2,936 in 1914 to 11,613 in 1939.
The period from 1945 to 1947 was a time of crisis for industries during which production fell down due to decreasing demand for industrial products, lack of capital, skilled labour, political unrest, transport bottleneck and labour strike.
The partition of the country in 1947 gave severe blow to jute, cotton textile and chemical Indus due to disruption in raw material supply, shorta skilled labour and breaches in railway transport them.
Major industries including cement, cheer ' sugar, power and ferrous metals which appeared the beginning of the 20th century, continued develop. Besides Mumbai, Kolkata, new center emerged in Bihar (metallurgy, cement, sugar),U' Pradesh (sugar, textile and glass), and Madhya Pradesh (textile). However, the total industrial outputs' inadequate to meet the internal demand and t' was little diversification.