How did economic nationalism mirror the work of the early nationalist leadership in India? (250 words)
Indian handicrafts industry indicated a vibrant economy in India. Despite enjoying such fame in the world, the Indian handicraft industry had begun to decline by the beginning of the 18th century due to discriminatory colonial policies of British. The commercial policy of the East India Company after 1813 was guided by the needs of the British industry. The essence of 19th century colonialism lay in the transformation of India into a supplier of foodstuffs and raw materials to the metropolis, a market for metropolitan manufactures and a field for investment of British Capital. Charter Act of 1813 allowed one-way free trade for British citizens resulting in Indian markets flooded with cheap & machine made imports. Indians lost not only their foreign markets but their markets in India too.
Dadabhai Naoroji, 'The Grand Old Man of India' played a major role in arousing and stimulating economic nationalism in India. R C Dutt (‘Economic History of India’) & Dadabhai Naoroji (“Poverty and Un- British Rule in India”) first cited the drain of wealth theory.
- Drain of wealth began after Battle of Plassey when the company’s servants began to extort fortunes from Indian rulers, Zamindars, merchants and common people and send home.
- In 1765 the company acquired the Diwani of Bengal & began purchase the Indian goods out of the revenue of Bengal and exported them. These purchases were known as Company’s investment.
- Duty free inland trade provided British merchants a competitive edge over their Indian counterparts.
Drain of wealth refers to a portion of national product of India, which was not available for consumption of its people. This led to many economic ills in India. These factors seeded economic nationalism in India.
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