Industrialisation in India

Cotton textile was the biggest export from India at the start of the British rule. Once the East India Company consolidated its business (mid-eighteenth century), new trade centers (Bombay and Calcutta) gained importance. The earlier centers of trade (Surat, Hooghly) lost importance.

Indian Textiles Industry

Gomastha

Once the East India Company established political power, it started to assert its monopoly right to trade. The Company started to eliminate the existing network of traders and brokers who were connected with the cloth trade. Then the Company started to get a direct control on weavers. The Company appointed a paid servant to supervise weavers, collect supplies and examine the quality of cloth. This person was called Gomastha.

System of Advances

A system of advances was introduced for weavers. Once a weaver obtained loan under this system he was prevented from dealing with other buyers. The weaver could not sell his produce to any other trader.

Problems for Weavers

The new system of advances created many problems for the weavers. Earlier, they used to grow some crops on their land which took care of their family needs. Now, they had no time for cultivation and they had to lease out their land.

The traditional merchants were local people who had social links with the villages. But the gomastha was an outsider with no social links with the villages. He generally visited with sepoys and peons in tow. Weavers who failed to meet the deadline were punished by the gomastha. There were many reports of clashes between weavers and gomasthas in villages.

Debt Trap for Weavers

The system of advances ruined the life of many weavers. They often fell in debt trap. In many places in Carnatic and Bengal, weavers deserted villages and migrated to other villages to set up looms. Many weavers began to refuse loans, closed down their workshops and took to farming.

Manchester comes to India

Exports of textiles from India started to decline by the beginning of the nineteenth century. In 1811 – 12 cotton piece-goods accounted for 33% of India’s exports but it declined to less than 3% by 1850-51.

Pressure from British Manufacturers

Because of pressure from the British manufacturers, the government imposed import duties so that the goods manufactured in Britain could sell in England. They also pressurized the East India Company to sell British manufactured goods in Indian markets. At the end of the eighteenth century, there had been negligible import of cotton piece-goods in India. But by 1850 cotton piece-goods constituted over 31% of the value of Indian imports. By 1870s, the value increased to over 70%.

The machine-made cotton was cheaper than hand-made cotton piece-goods in India. The weavers thus lost a huge market share to imports from Britain. By 1850s, most of the cotton producing centres in India faced a steep decline.

Effect of Civil War

The Civil War broke out in the US in 1860s. Due to that, cotton supply from the US to Britain was cut off. Britain began to source cotton from India. This led to a huge shortage of raw cotton for weavers in India.

By the end of the nineteenth century, cotton factories began to come up in India as well. This was the final blow for traditional cotton textiles industry in India.

Factories Come Up

The first cotton mill in Bombay came up in 1854 and it went into production two years later. In the 1860s, more mills came at Bombay and also at other places like Ahmedabad and Kanpur. The first cotton mill in Madras began production by 1874.

Early Entrepreneurs

Many Indian businessmen had a long history of trade with China. They actively participated in opium trade of the British India. Thus, they ended up amassing sizeable capital and started to harbor dreams of establishing big industries.

Dwarknanath Tagore was among the pioneers to begin industries in the 1830s and 1840s. Tagore's enterprise sank during the business crises of the 1840s. But in the later nineteenth century, many businessmen became successful industrialists. In Bombay, Parsis like Dinshaw Petit and Jamsetjee Nusserwanjee Tata went on to build huge industrial empires. Seth Hukumchand (a Marwari businessman) set up the first Indian jute mill in Calcutta in 1917. The Birla Group was similarly started by successful traders who gained wealth by trading with China.

Jamshetji Tata (Ref: Wikipedia)

Capital was also accumulated through other trade networks like Burma, the Middle East and Africa.

There was a virtual stranglehold of the British players on business in India which left little scope for growth of Indian merchants. Till the First World War, European Managing Agencies controlled a large sector of Indian industries.

Workers' Origin

Workers generally came from neighboring districts and villages. Workers generally returned to their villages during harvests and festivals. After some growth in the industry, workers from greater distances also started to migrate to the new industrial hubs. For example, people from the United Provinces (modern Uttar Pradesh) began to migrate to Bombay and Calcutta in search of livelihood.

Getting a job was not easy. One had to rely on relatives and acquaintances for getting a job. Industrialists usually employed a jobber to hire new people. The jobber was usually an old and trusted worker. The jobber usually preferred people from his own village. He helped them to settle in the city and provided financial help during crisis. The jobber thus became an influential person. He began to demand money and gifts for his favour and began to control the lives of workers.

Summary