When was the free-trade policy announced? What was the free- trade policy ? What adverse effect it had on Indian cottage industry ?

a. Free-trade announced:

In 1813 the British government in London announced the free-trade policy.

b. What was Free-trade?:


The English East India Company from the very beginning had been enjoying a monopolistic trade with India. No other British company was allowed trading activity in the Indian sub-continent.

With the announcement of the free-trade policy the East India Company’s monopoly of Indian trade was abolished. Thus different companies of Britain trading in various articles flocked in India. The doors of India were thus thrown wide open to foreign goods. This had seriously affected the Indian industry.

c. Its Adverse Effects:

With the announcement of the free-trade policy the doors of India were thrown open to foreign articles. Goods of every kind rushed to the Indian markets.


The Indian hand-made goods manufactured with crude type of machinery could not withstand the competition with foreign goods. For, the foreign goods had a better finish and were sold at a cheaper price. As these were made in factories huge quantity of goods were produced in a very short time.

Thus the; handicraft industry faced extinction. The artisans and craftsmen of India became unemployed. They had no other option but to work as daily labourers.