Before the Industrial Revolution, India dominated the global textile market. However, European companies gradually gained power and established trade monopolies. This led to a decline of Indian ports (Surat and Hooghly) and a shift to European-controlled ports (Bombay and Calcutta). The European companies paid lower prices for goods and imported finished goods from Europe, which reduced the demand for Indian textiles. As a result, many weavers and other artisans were forced to abandon their trades.

Impact on the Weavers

Consolidation and Control over Textile Sector: After the 1760s, East India Company established political power in Bengal and Carnatic. 

• It allowed the Company to assert a monopoly right to trade and to develop a system of management and control over the weaver that would eliminate competition, control costs, and ensure regular supplies of cotton and silk goods. 

• Principle of Company’s System:  
  • Eliminating existing traders and brokers connected with cloth trade, and establishing a more direct control over the weaver. 
    • The Company appointed a paid servant called gomastha to supervise weavers, collect supplies, and examine the quality of cloth. 
  • Preventing Company weavers from dealing with other buyers:  The Company did this through a system of advances, which required weavers to hand over cloth they produced to gomastha after they had taken a loan to purchase raw material.
• Negative consequences for weavers:
  • Loss of Bargaining Power: Weavers lost the space to bargain for prices and sell to different buyers. 
    • The price they received from Company was miserably low and loans they had accepted tied them to Company.
  • Decline of Social Prestige: Weavers were often mistreated by the gomasthas. The gomasthas were outsiders with no long-term social link with the village. 
    • They acted arrogantly and punished weavers for delays in supply. 
  • Poor Working Environment: Weavers were forced to work long hours for low wages. 
    • Weaving required labour of an entire family, with children and women all engaged in different stages of process. 
  • Shortage of Raw Cotton:  During the start of American Civil War, Britain switched to using cotton from India after US stopped supplying it. 
    • This resulted in a deficiency of raw cotton in India and a rise in the cost of cotton.
  • The rise of Indian textile factories. At conclusion of nineteenth century, Indian factories started manufacturing textiles using machines. This led to a decrease in the need for hand-woven textiles.
  • Deindustrialization and Ruralisation: Due to these circumstances, numerous weavers abandoned their villages and either migrated or turned to agricultural work.
    •  A lot of weavers had to give up their profession and search for employment in different industries. 
    • This resulted in a decrease in the quality and range of Indian fabrics.

Reason for Decline of Textile Exports from India:

• Protectionism and One-Way Free Trade Policy: British cotton industries developed and began lobbying the government to impose import duties on Indian textiles to make  Indian textiles less competitive in  British market.
• Flooding Indian Market: The East India Company began selling British manufactures in Indian markets. 
  • Availability of finished textiles at a cheaper cost reduced the demand for Indian textiles.
• Price Advantage: Machine-made British textiles were cheaper than Indian textiles which put Indian weavers at a disadvantageous position.

The Emergence of Factories in India

• Early Cotton Mills: In 1854, the initial cotton mill was established in Bombay, and by 1862, four mills were operating. 
  • Jute mills were set up in Bengal at approximately same period.
• Expansion of Cotton Mills: The establishment of Elgin Mill took place in Kanpur in 1860s, followed by the founding of the first cotton mill in Ahmedabad the following year. 
  • Production at initial spinning and weaving mill in Madras commenced in 1874.

The Early Indian Entrepreneurs

The initial business owners who established industries in India had diverse backgrounds. Some individuals were traders who had become wealthy from doing business with China, like Dwarkanath Tagore, Dinshaw Petit, and Jamsetjee Nusserwanjee Tata. Some were traders who conducted business in India, like Seth Hukumchand and G.D. Birla’s grandfather.

• Operated under Restrictions: As colonial control over Indian trade tightened, Indian merchants faced increasing restrictions. 
  • They were barred from trading with Europe in manufactured goods and had to export mostly raw materials and food grains. 
  • They were also gradually edged out of shipping business. 
• Under European Control: European Managing Agencies controlled a large sector of Indian industries until First World War. 
  • These Agencies mobilized capital, set up joint-stock companies, and managed them. 
  • Indian financiers provided the capital, while the European Agencies made all investment and business decisions.

Industrial Workforce

• Rapid Growth in Industrial Workforce: Factories needed workers, and demand increased as factories expanded. 
  • By 1946, number of factory workers in India had increased to more than 2,436,000 from 584,000 in 1901.
• Labour Migration to Industrial Centers: Labourers traveled from nearby areas near factories, as farmers and craftsmen migrated to urban hubs looking for employment. 
  • Millworkers often moved between village and city, returning to their village homes during harvests and festivals.
• Challenges in Getting Factory Jobs: Getting jobs was difficult, even when mills multiplied and demand for workers increased. 
  • Entry into mills was also restricted, and industrialists usually employed a jobber to get recruits. 
  • The jobber was often an old and trusted worker, and he had some authority and power over the lives of workers.
• Status: The number of factory workers increased over time, but they were a small proportion of the total industrial workforce.

The Unique Features of Industrial Growth in India

• European Managing Agencies: These Agencies dominated industrial production in India, investing in tea and coffee plantations, mining, indigo, and jute. 
  • These products were primarily for export, not for sale in India. 
• Avoiding Direct Competition with British Imports: When Indian businessmen began setting up industries in the late 19th century, they avoided competing with Manchester goods in Indian market. 
  • They produced coarse cotton yarn, which was not an important part of British imports into India. 
  • This yarn was used by handloom weavers in India or exported to China. 
• Impact of the Swadeshi Movement: In early 1900s, swadeshi movement gained strength, prompting nationalists to organize boycotts of foreign clothing. 
  • Industrial factions banded together to safeguard their interests, urging government to raise tariff protection and provide additional concessions.
  • Additionally, the export of Indian yarn to China declined, as produce from Chinese and Japanese mills flooded the Chinese market.
  • As a result of these changes, Indian industrialists began shifting from yarn to cloth production. Cotton-piece goods production in India doubled between 1900 and 1912.
• World War I: It created a dramatically new situation. With British mills busy with war production, Manchester imports into India declined. Indian mills suddenly had a vast home market to supply. As the war prolonged, Indian factories were called upon to supply war needs. 
  • New factories were set up and old ones ran multiple shifts. 
  • Many new workers were employed and everyone was made to work longer hours. Over the war years industrial production boomed.
• Post World War: Manchester could never recapture its old position in the Indian market. The economy of Britain crumbled after the war, and cotton production collapsed. 
  • Exports of cotton cloth from Britain fell dramatically. 
  • In Colonies, local industrialists gradually consolidated their position, substituting foreign manufacturers and capturing home market.

Leading Role of Small-scale Industries

• Limited Growth of Heavy Industries: While factory industries grew steadily after war, large industries formed only a small segment of economy.
  • Most of them were located in Bengal and Bombay. 
  • Over rest of country, small-scale production continued to predominate, with only a small proportion of total industrial labour force working in registered factories.
• Expansion of Handicrafts Production: Handicrafts production expanded in twentieth century, even in case of handloom sector. 
  • This was partly due to technological changes, such as use of fly shuttles, which increased productivity and reduced labour demand.
• Survival Strategy: Certain groups of weavers were in a better position to survive the competition with mill industries, such as those who produced finer varieties of cloth or specialized weaves.
• Industrialization: Weavers and other craftspeople who continued to expand production through the 20th  century lived hard lives and worked long hours, but their life and labour were integral to the process of industrialization.

Market for Goods

Resistance to Colonial Economic Control: British manufacturers attempted to take over the Indian market, but Indian weavers and craftsmen, traders, and industrialists resisted colonial controls, demanded tariff protection, created their own spaces, and tried to extend the market for their produce.

• Advertisements played a role in expanding markets for products and shaping a new consumer culture. Manchester industrialists put labels on their cloth bundles, which carried words, texts, and images. 
  • They used images of Indian gods and goddesses to make the goods appear familiar and appealing to Indian people.
  • Indian manufacturers used advertisements to promote nationalism and the Swadeshi movement, urging people to buy products that Indians produce.

• Calendar Printing: By late nineteenth century, manufacturers were printing calendars to popularize their products. 
  • Calendars were used even by people who could not read, and they featured advertisements with images of gods, emperors, and nawabs. 
  • The message was often that if you respected the royal figure, then you should respect the product.

Conclusion

The Industrial Revolution marked a significant shift in India’s textile industry. European monopolies disrupted traditional trade, leading to decline of Indian ports and forcing weavers into agriculture or other industries. East India Company’s control over weavers, combined with British protectionist policies and the influx of cheaper, machine-made British textiles, devastated the Indian textile sector. However, Indian industrialization slowly emerged, fueled by early entrepreneurs and Swadeshi movement, eventually leading to a resurgence in local manufacturing and small-scale industries.

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