The British Rule in India changed the political set-upon, transformed the structure of the traditional Indian society and developed fascination towards the Western Culture.

Both nature and structure of Indian economy underwent profound changes and it served the British economic interests at the cost of India. While the economy of Britain flourished, India was left amidst poverty and was found in such a state from which was impossible to recover. No doubt, development of transport and communication, those changes ruined Indian economy to a greater degree. In other words, as a colony India was dried of economically but she nourished the economy of the mother country, i.e. England.

The British colonialism changed the nature and structure of the economy of India and gave a new shape to it. Traditional economic pattern was completely disrupted and its place was taken by a new one.

India was an agricultural country and more than eighty percent of its population lived in villages and adopted cultivation as the primary occupation. Indian economy was traditionally self-sufficient village economy.


Even trade and commerce of India was mainly depended upon agricultural products and its allied ones. Under this economic system, each village was functioning as an economic unit and was able to meet the basic needs of the villages. Usually people of different occupations or professions lived in the village and exchanged their product among themselves or with people of nearby villages.

The exchange of goods or products is called barter system. A cultivator had to exchange food crops to get other essentials of life and a weaver exchanged his products for food crops. In other words, sale of goods for money or cash was not a practice. Even labourers, carpenters, potters, blacksmiths were paid wages in kinds of their services. Sometimes the exchange process was multi angular involving more people.

For example, a cultivator needs the services of a carpenter to supply agricultural tools, the carpenter needs clothes, a weaver needs oil but the oilman requires the services of labourers and needs food grains. The net work of exchange completes when all of them court-operate to exchange their services among one another. The cultivator supplies food grain to labourers, the labourers serves the oilman, the oilman meets the need of the weaver, the weaver works for the carpenter and finally the carpenter meets the need of the cultivator.

This system would have continued under the British rule, if the British could have ruled India like all previous foreigners. Previously the political power changed from one person to other, but the economy continued as before. Neither the Afghans nor the Munhall intended to change the economic system of the country.


The pattern of economy continued as before and the peasants, the artisans and the traders contributed for continuance of the self sufficient village economy. They remained perpetual foreigners to India. They never accepted India as their home.

India was treated as a colony and Indian economy was subordinated to the economic interests of Britain. Through out the British Rule resources of India were exploited and surplus revenue was carried away from India in various forms. Ultimately Indian economy served the requirements of the British trade and industry.