Deindustrialisation I: the destruction of the weaver economy

Detail

1. Before the machines: India ruled the cloth trade

• Before machine industries began in Europe, Indian silk and cotton goods dominated the international textile market. The finer varieties of cloth came from India.
• India was a major player in the world export market for textiles in the early 18th century. By the middle of the 19th century it had lost all of its export market and much of its domestic market [2].
• Two great trade routes carried this cloth out of India:
• Overland (land route): Armenian and Persian merchants carried goods from Punjab to Afghanistan, eastern Persia and Central Asia. Goods moved on mountain passes and through desert towns.

• Sea route: three old ports handled it —

  • Surat (Gujarat coast) — linked India to the Gulf and Red Sea ports.
  • Masulipatam (Coromandel coast, east) — Bay of Bengal trade.
  • Hoogly (Bengal) — linked to Southeast Asia.

• The whole system was Indian-owned. Indian merchants and bankers financed production (gave money to weavers in advance), supplied raw material and shipped the goods out. Profit stayed in Indian hands.

• Dacca (Dhaka) muslin — the finest cotton cloth of all — became so popular in England that it was strong competition for English textile mills [3].

2. The 1750s: the Indian network breaks down

• By the 1750s this old Indian-controlled network was breaking down. European companies grew strong by winning concessions (special trade favours from local rulers) and then monopoly rights (only they could buy or sell a good).
• Hard number for the collapse: Surat's gross trade fell from Rs 16 million at the end of the 17th century to Rs 3 million in the 1740s — a fall of about 80%.
• As the old ports died, Bombay and Calcutta grew. These were European-controlled ports. Trade now moved in European ships, and the credit came from European agents, not Indian bankers.
• Why this matters: the money-making part of the business shifted from Indian merchants to Europeans before any British machine cloth arrived. Political control came first, machines came later.

3. The Company's grip after the 1760s

• Political power turned into economic monopoly. In 1765 the Mughal emperor Shah Alam II granted the East India Company the diwani (right to collect and administer the revenue) of Bengal, Bihar and Orissa [4]. Clive became governor of Bengal in 1765 [4].
• The Company's economic policies drained first Bengal and then much of the subcontinent of its wealth; the Company took unfair advantage of many local industries and gradually destroyed them [4].
• Two tools were used on the weavers:

Tool ①: kill the middlemen, put in a paid servant

• The Company eliminated the existing traders and brokers who used to deal with weavers.
• In their place it appointed a paid servant of the Company — the gomastha.
• Gomastha's three jobs: supervise weavers, collect supplies (the finished cloth), and examine the quality of cloth.

Tool ②: the advance system (loans that trap)

• The weaver was given an advance — a loan to buy raw material (yarn).
• Condition: once he took the advance, he had to hand over ALL the cloth he produced to the gomastha. He could sell to no other buyer.
• Effect on the weaver's household:
• Many weavers leased out their small plots of land (gave the land to someone else to farm).
• They then wove full-time, using family labour — wife, children, all working on the loom.

• This meant no fallback. If weaving failed, they had no field to return to.

• The Company in the early 19th century provided advances and imposed heavy production quotas and strict delivery deadlines on local weavers; the pressure was such that many artisans had to abandon weaving and shift to other occupations [2].

4. Why the gomastha was hated

• Earlier supply merchants had lived in the weaving villages and had close social links with the weavers. They helped weavers in bad times.
• The gomasthas were outsiders. They had no long-term social link with the village.
• They marched into villages with sepoys and peons (armed soldiers and hired servants).
• They punished delays in supply with beating and flogging.
• The prices paid were miserably low. The weaver was also tied by the loan, so he could not bargain or walk away.

5. How weavers fought back

• Desertion: weavers deserted their villages — recorded in the Carnatic (south) and Bengal. They moved to other villages and set up looms where they had family.
• Revolt: weavers revolted together with village traders against the Company and its officials.
• Refusal: in many places weavers refused to take advances, closed down their workshops, or simply stopped producing.
• Occupation change: many gave up weaving and became agricultural labourers.
• The famous line of Governor-General William Bentinck (1834): "The bones of the cotton weavers are bleaching the plains of India."

6. Manchester comes to India — the double squeeze

• Two doors were shut on the Indian weaver at the same time.

Door 1 — the export market closed

• British industrialists pressed their government to put import duties on Indian cotton textiles entering Britain. Indian cloth became expensive in Britain and lost buyers.
• Indian piece-goods (finished cloth) fell from 33% of India's exports in 1811–12 to 3% in 1850–51.
• Britain in the mid-19th century shut down Dhaka's muslin industry by putting a large duty on the cloth's import into Britain and by pushing British machine-made thread into Dhaka; the cheaper British thread put Dhaka's weavers out of business and the city declined [3].

Door 2 — the home market flooded

• The same industrialists persuaded the government to sell British manufactures in India with minimal tariffs (almost no tax on goods coming in).
• Britain also controlled sea trade and exchange rates, so it could set the terms of the trade.
• Cotton piece-goods rose from virtually nil to over 31% of the value of India's imports by 1850, and to over 50% by the 1870s.
• Net result: the weaver lost the foreign buyer and the Indian buyer at the same moment.

7. The 1860s raw-cotton famine

• The American Civil War (1860s) cut off American raw cotton to Britain.
• Britain then turned to India for raw cotton. Indian raw cotton was exported to Britain.
• For the Indian weaver this was a disaster: raw cotton supply at home shrank, and he had to buy cotton at exorbitant (extremely high) prices.
• So the weaver was hit from both sides — dear raw material going in, cheap machine cloth coming at him in the market.

8. The last blow: Indian mills

• From the end of the 19th century, Indian factories/mills started up and flooded the market with machine-made goods.
• Handloom weavers now faced machine competition from inside India too, not only from Manchester.
• Not only cloth: the same collapse hit Indian iron and steel manufacture and paper manufacture. Indian smelters and paper-makers lost their markets to imported goods.

Note: One scholarly source argues that in handloom weaving the competitive decline was not general but specific to certain types of market and apparel [2]. The NCERT position — a broad destruction of the weaver economy — is the exam position and is used in the body above.

Prelims Hooks

• Surat's gross trade fell from Rs 16 million (late 17th century) to Rs 3 million (1740s).
• The three old ports of Indian textile export: Surat (Gulf/Red Sea), Masulipatam (Coromandel), Hoogly (Bengal–Southeast Asia).
• Armenian and Persian merchants ran the overland route from Punjab to Afghanistan, eastern Persia and Central Asia.
• Gomastha = paid servant of the Company appointed to supervise weavers, collect supplies and check cloth quality.
• Indian piece-goods: 33% of exports in 1811–12 → 3% in 1850–51.
• Cotton piece-goods as share of India's imports: over 31% by 1850, over 50% by the 1870s.
• Quote "The bones of the cotton weavers are bleaching the plains of India" → William Bentinck, 1834.
• Weaver desertions were recorded in the Carnatic and Bengal.
• 1765: Shah Alam II granted the Company the diwani of Bengal, Bihar and Orissa; Clive became governor of Bengal the same year [4].
• The 1860s raw-cotton crisis was caused by the American Civil War diverting Indian raw cotton to Britain.
• Besides textiles, iron, steel and paper manufacture also collapsed.

Mains Points

• Deindustrialisation was political before it was technological. The Indian trade network was already broken by the 1750s through concessions and monopoly rights, and Surat fell from Rs 16 million to Rs 3 million before the power-loom mattered. Argue the sequence: conquest → monopoly → advance system → tariff asymmetry → machine competition.
• The tariff asymmetry is the core Mains argument. Britain used duties on Indian cloth entering Britain but minimal tariffs on British cloth entering India, plus control of sea trade and exchange rates. This was not free-market defeat; it was a managed market. Evidence: exports 33% → 3%, imports nil → 50%+.
• Links to the drain of wealth and to land revenue. The weaver who leased out his plot and then lost his craft became an agricultural labourer — adding pressure on land already squeezed by high revenue demand. Deindustrialisation thus explains the over-crowding of agriculture and the rural poverty behind colonial famines.
• Counter-view for balance (GS-I nuance). Some economic historians hold that handloom decline was market-specific rather than universal [2] — the coarse-cloth and specialised-weave segments survived longer than the fine-muslin export segment, whose fall (as at Dacca) was total [2][3]. Mention it, but anchor the answer in the NCERT position.