Economic exploitation of India by the British: 

The British exploited India in the following ways:

1. Drain of Indian Wealth:

India got nothing in exchange for the money that was sent to England from India and this was called the drainage of wealth. The clearance money was not in the form of metallic coins, but it was in the form of export of company in India in the form of coins, the goods were purchased for this amount and exported to England. Dadabhai Naoroji said, “The wealth of India goes outside India and this money returns to India in the form of loans for which they have to pay the interest. It was a vicious cycle which was hard to break.”

2. Destruction of Handicraft Industries of India: 

The British government destroyed Indian industries. The British adopted such type of policies that completely destroyed Indian handicraft industries. Indian goods were banned in England. Heavy taxation was applied on their production and export. Indian markets were dumped with British goods.

The machine – made goods of Britain were cheaper than the handmade goods of India. The people started buying cheaper goods made in England. Indian industries started declining, and as a result, thousands of Indian artisans and craftsmen became unemployed. The local people became unable to fulfill even their daily needs. In this way, the local industries lost not only the foreign markets but the local market also.

3. Destruction of Agriculture:

Indians were self-dependent before arrival of the British in India. But after their arrival, Indian agriculture started declining. Heavy taxation was levied on farmers, due to which economic condition of farmers went from bad to worse. The farmers abandoned agriculture and adopted other means of livelihood. British government recovered taxes from farmers by force.

Agricultural lands were snatched from those farmers, who were unable to pay heavy taxes. Later, commercialization of agriculture took place, and due to this, there was a shortage of food grains. The conditions of drought arose all around. People started starving. Due to exploitative British policies, Indian agriculture was crushed into dust.

4. Free – Trade Policy of the British: 

The British government formed a free trade policy. The provisions of this policy destroyed Indian economy. The British government decided such trade polices which served their own economic interests and unsuitable for Indians. The industrialization in Britain ruined Indian cottage industries. Britain wanted more and more capital through this trade policy. They exploited Indian economy badly and became successful in their objective.