Industrial Policy of British India

The British Government showed a marked antipathy and neglect towards Indian industries. The British Government in India followed the policy of free trade. It resulted in the demise of India’s world fame cottage and small scale industries as these could not stand in the competition of British industries. Tierney had explained Britain’s economic policy vis-a-vis India in these words, “The general principle of our economic policy should be, to sell in Indian markets the goods manufactured in England and in return, to buy raw material from India.”

This policy got changed during first world war because the requirements of the war necessitated to increase production. An Industry Commission was appointed in 1916 to evaluate industrial prospects. Indian Ammunition Board was set up in 1917. This Board made some efforts towards industrial growth. In 1919, the industry was made a state subject. The Tariff Commission was set up in 1921. On the recommendations of this Commission, differential policy of protection was adopted for Indian industries. Therefore, it was decided to provide protection to some selected industries keeping in view pre-decided principles. The Indian industries got a boost during the period of second world war.