How Britain Looted $45 Trillion From India
Apart from that, when the British monarchy officially acquired control of India in 1858, they abolished the EIC monopoly and permitted Indian producers to directly export their products. However, this was also a British ruse to confuse the Indians.
After EIC’s monopoly ended, Indian producers began exporting their products as well. However, rather than gold and silver, the British dealer used to pay Indian exporters in “Special Council Bills.” SCBs functioned similarly to checks, allowing Indian manufacturers to withdraw funds from colonial offices. However, British officers played a trick here by paying the money using funds collected from India’s tax revenue.
The objective of this policy was to prevent any outward flow of gold or other financial resources from Britain to India.
According to UN data, India’s merchandise exports were the second highest in the world between 1900 to 1928, trailing only the United States. However, rather than becoming a trade surplus nation, India remained a trade deficit nation as a result of Britain’s dishonest and unethical policies.
Using this on paper deficit British economists claim that colonising India was detrimental for Britain.
Biased Trade Policy
Apart from organized looting, the British’s discriminatory trade policies contributed to the De-industrialization of the Indian economy. India’s textile industry suffered significantly as a result of this policy.
The Indian textile industry thrived till the late 17th century. Demand for Indian handwoven textiles was quite strong around the world, including the United Kingdom. However, as a result of the industrial revolution in the United Kingdom, they can now make cheaper machine-made clothing.
To promote British clothing, Britain put high tariffs on imported Indian textiles, effectively rendering them uncompetitive in the UK in comparison to British clothing.
As a result of the Indian textile industry’s inability to compete, low-cost machine-made clothes arrived in the country, reducing demand for domestic handloom clothes and eventually resulted in the downfall of the Indian textile industry.
The unfair trade practice of Britain destroyed the Indian traditional textile sector and caused the ‘De-industrialization’ of the Indian economy. De-industrialization not only destroyed the Indian economy but also placed a heavy load on the previously saturated agricultural industry.
Indian Resources to Finance War
Britain used Indian revenues to accomplish colonial ambitions rather than using them for Indian development. For instance, in the 1840s, Britain utilized Indian money to finance China’s invasion campaign, and also to suppress the Indian rebellion in 1857.
According to Ustasav Patnaik, ‘almost every battle that Britain waged after colonizing India, was financed by Indian taxpayers.’ Additionally, they exploited the revenue gained from India to expand their capitalist agenda in Europe, Canada, and Australia.
Thus, we can state unequivocally that the industrialisation of the western world was dependent on money looted from India.
The economic drain of $45 trillion from India to Britain is merely an ‘Indicative amount,’ since it does not account for the British’s rampant exploitation of India’s human resources through the use of ‘Indentured labourers.’
The British also sent Indian troops to fight on the Allied side during WWI and WWII. Indian soldiers had no desire to fight in this war but were compelled to do so by the British monarch.
According to Sashi Tharoor, approximately one-sixth of British soldiers were of Indian origin, and nearly 54,000 Indian soldiers were killed in action during WWI alone. The total cost of India’s coerced support for Britain during World War II has been estimated at £100 million.
The British Justification
Despite these facts, an influential segment of the British population continues to assert that Britain colonized India to develop it. So let’s see what Britishers have to say in support of these claims.
The British economist asserts British losses based on a fictitious ‘paper-trade deficit.’ As I mentioned previously, this on-paper deficit benefited Britain on the ground because they received free Indian goods and made a 100% profit.
De-Industrialization of Indian Economy
British historians also assert that the Indian economy was already deindustrializing before the arrival of the British, owing to the decline of the Mughal empire.
The theory of ‘pre-industrialization of the Indian economy’ is partially correct. However, it is also true that the British hastened the process further through their exploitative and unethical trade policies.
Additionally, the Britishers can’t explain how India became a trade ‘deficit’ country despite having the world’s second-largest merchandise export.
Introduction of Moder Education
The third argument advanced by British apologists is that the British were instrumental in India’s development by introducing modern education, railways, the postal system, and a modern bureaucracy. This was really beneficial to India.
However, because India was the richest colony, the British needed to improve communication and establish a proper bureaucratic system to fully exploit its potential. Given that these were introduced primarily to advance ‘British Interests’ and not India’s development agenda, the British cannot claim a moral victory.
The British introduced modern education in response to the need for people with western education in the British bureaucracy. The primary objective of education was to produce lower-level clerks.
What Lies Ahead?
The British monarchy asserted that they colonized India to develop it. However, during the entire 200-year period of British colonialism, the Indian economy continued to contract. In the second half of the nineteenth century, India’s national income nearly halved. Between 1870 and 1920, the average life expectancy decreased by a fifth.
British policy also resulted in multiple massive famine in India, the most severe of which was the Bengal famine of 1943, which killed nearly 3 million people.
If India, like Japan, had been able to invest its own tax revenues and foreign exchange earnings in development, who knows how history might have turned out differently. India could have developed into a global power, averting centuries of pain and suffering.
What does this imply for the United Kingdom today? Apologies? Absolutely. Reparations? Perhaps — but the reality is that Britain is not in the position to pay $45 trillion in reparations.