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Mercantilism in British India (1757-1813): Economic Exploitation, Resource Control & Drain of Wealth # |
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Mercantilism: Adam Smith’s Trade Balance Theory #
Mercantilism in British India is a form of trade practice where the government focuses on maintaining a favorable trade balance by increasing exports and minimizing imports. This theory was given by “Adam Smith”.
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#PW-OnlyIas Edge |
| Phases of British Economic Policy in India
There are three broad phases of British Economic policy in India:
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| Also Read: The Phase of Free Trade ( 1813-1858) |
Mercantilism in British India (1757-1813): Economic Control and Exploitation #
Following are the characteristics of this phase of the Economic policy of the Mercantilism in British India:
- This phase was based on two basic objectives i.e:
- To acquire a monopoly of trade with India.
- To take control over the revenue of the government by gaining control over state power.
- New revenue-generating settlements were introduced in the existing Indian Agricultural set-up.
- During this phase, the East India Company resorted to direct plunder of the Indian state.
- This period marked the Drain of Indian wealth which amounted to approx 2-3 percent of Britain’s National Income.
- During this phase, exports from India outnumbered imports of finished goods from Britain.
- However, the weavers were exploited by the company by forcing them to produce under uneconomic compulsions.
| Also Read: Sir John Shore (1793-1798) |
Conclusion #
This phase did not see any major changes in administration, judicial functions, society etc. The mercantilist phase only served the economic interest of the East India Company
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