Did the British really 'drain' Wealth from India?

There was a recent debate by Shashi Tharoor who claims that the British owe India reparations for them being colonised for 200 years. In this claim, he stated that the British reduced India from a position of where it represented 23% of the Worlds economy, to around 4% at independence in 1947.

Now this has always irritated me, because I’ve seen the statistics on India’s economic performance, and to me it remained stagnant, and no more than around 6% of India’s economic surplus was used for upkeep of the British administration. Is this correct or is the true somewhere in the middle?

To further their empire and economics of course. They basically re-oriented the Indian agriculture and economy to produce products and services that they wanted for the rest of the empire…which was the standard practice of empires in the colonial period. Spain did the exact same thing in the new world…just look at central and south American countries for examples.

If you want to debate whether India should receive reparations that would be a real debate, but I think the why of it is pretty straight forward.

But you argue that case with the Mughals as well. I don’t think they deserve reparations, an apology for specific actions (The famines and the Amritsar massacre) is deserving, but not monetary compensation.

India? 23% of the world’s economy? In, what, 1750?

That’s all but impossible to believe. What were the goods being traded, and with whom?

“My God, Mr. Chairman, at this moment I stand astonished at my own moderation!”

Robert Clive

His speech here.

In 1600, according to Angus Maddison. You can see his graph of some historical trends in GDP’s here. Note that Maddison argued that the per capita the GDP of India in 1600 was quite a bit lower than in places like northern Europe even in 1600. But the sheer mass of their economy which produced everything from textiles to ( at the time very valuable ) spices simply swamped out Europe.

Remember when Cabral ventured to India in 1500 he got cheated with low quality goods while trading, lost half his fleet on the voyage and still reaped a 800% profit from the proceeds of the trip.

It seems to me that the argument would have to be that colonization prevented India from industrializing. I don’t know enough of the history to know whether that is a valid complaint or not.

I’ve done this on these boards before, and it’s Friday, so I’m not going to spend time pulling up all my cites. But, here’s a few things to keep in mind:

  1. At independence, India was mired in poverty.

  2. During the colonial period, the British Parliament had final say on all laws, taxes, tariffs, etc. in India. So, the fact that the subcontinent was mired in poverty rests squarely on them. There was a gradual period, starting in the late 1800s, of divesting power to the Indians, but economic power always remained largely in control of the British. And whatever the Indians did, the British could always override (until independence).

  3. Just from a market perspective, it makes no sense to ship raw materials all the way to England to be turned into finished products to be sold back in India. It should be much cheaper to just do the manufacturing in India itself. But, yet there was virtually no heavy industry in India at independence and very little light manufacturing at independence. The only way this makes sense is that the economic regime incentivized manufacturing in England, rather than manufacturing in India, through government policy.

But, yes. The British basically devastated the Indian economy. During the British East India Company period, English manufacturers were worried that they were going to be supplanted by goods coming from India, so the British parliament passed a series of tax and tariff laws to keep that from happening. As cheap manufactured goods flooded the subcontinent, the native artisan industries basically shut down. Which meant that India was more or less reduced to producing raw materials.

Once British rule proper started, most of the tariff/trade regime was left in place. Additionally, the British put India on a silver standard, while the British were on a gold standard. But, they required that India pay its balance of payments in gold, rather than silver. This basically drained all the gold out of the Indian economy.

And, British agricultural policy in India was not geared towards feeding the population but rather towards producing raw materials for British manufacturing. Which meant that when droughts happened, famines ensued, and the British were slow or indifferent to famines.

There are books and books written about this stuff. But, it’s very clear that the British were disastrous for the Indian economy.

I’ll just add this, since I know it’s going to come up. While I don’t agree with Nehru’s economic approach post-independence, the fact of the matter is that within a few decades of the British leaving, the Indians had built a sizable heavy-industry manufacturing capability virtually from scratch.

Kind of a tangent but is it true that the British looted all kinds of jewels and valuable artifacts from the Taj Mahal?

Has anyone asked the question “if the British hadn’t ‘colonized’ India, who, if anyone, would have, and what would the result have been?” Should the analysis be ‘due to?’ or ‘but for’? This isn’t meant to be proposed as as a way for anyone to eschew responsibility for their actions - which I think were pretty unambiguously reprehensible, if not unique, in this instance - but just as a matter of economic analysis. The world seems to have been changing at such a rapid pace at that time that it’s hard for me to conjecture how things may have played out in different scenarios, such as India retaining independence or being a Dutch or French colony.

I think the alien overlords would have come down and turned everything into a paradise.

Seriously, why do we have to play alternate history timelines? The French and Dutch both had pretty terrible economic policies in a number of their colonies, so what are you trying to tell us? That the Indians would have done badly under the French? Well, I don’t think anybody is going to claim that the French colonial empire was some great thing, so what exactly is your point?

The potential of the Indian economy is on a par with China, they have similar populations. India inherited a comprehensive railway infrastructure and has more natural resources. It should be way ahead.

However, it lags far behind in terms of economic development and the reason for that lies squarely with poor economic management by successive Indian governments. The country is riven with graft and the political class is famously corrupt.


To be still blaming the Britishers after 67 years says it all.:dubious:

How about you provide us with the rail mileage prior to independence and after independence by year. Let’s see who was responsible for building most of the Indian railway infrastructure.

In what way does India have ‘similar populations’ to China?

I don’t think he/she actually read the thread before they posted, and I don’t think they actually have any idea what they are talking about.

I honestly do not get this. I have ancestors who’ve done some pretty shitty things, and I don’t defend them. But start a thread about colonialism, and a bunch of people rush in to defend shitty colonial policies. Which they weren’t involved in. Why would someone defend abhorrent behavior that they had nothing to do with?

In WWII that setup turned into a disaster that is not well known:

World War II, A War for Resources: Crash Course World History #220

You don’t. But the ‘but for’ standard is a common one in law for the measure of damages and the OP asked about how much might be owed.

The standard and my post, have nothing to do with judging whether the actions were moral, they weren’t. But if reparations are actually sought, per the OP, the law will most likely enter the picture.

Just stop. There is nothing in the OP asking anything about how much might be “owed.” The OP is asking how the British impacted the Indian economy and what percentage the Indian economy comprised of the entire world economy. He discusses other people asking for reparations, but that is not the point of the OP.

Aside from that, if we were actually talking about actual damages (if reparations were actually being officially sought, which they aren’t), then the behavior of the French or the Dutch is irrelevant. If this were a tort (which it isn’t, so just stop pretending you know what you are talking about), we’d be calculating actual damages to the plaintiff plus potential punitive damages. Hypothetical about what the French or Dutch may or may not have done would be irrelevant.

Firstly, the modern Republic of India is quite different from “British India” and the “Indian Empire”, which encompassed Pakistan, India, Bangladesh, Sri Lanka, Burma (until 1947) and also administered places like Aden, parts of Afghanistan and Nepal. That has to be kept in mind.

Secondly, Shahshi Tharoor is an idiot. I would find anything he says as difficult to believe.

Thirdly, related to the above, the effects of British rule tended to vary according to region. In Bengal it was little short of geneocidal. They turned what had been the richest part of the sub continent into a basket case.
Punjab on the other hand prospered. Mainly because it was no longer the invasion route and it began a economic rise which continues to this day.

Other places, like the Frontier remained in stasis due to British policies supporting ossified and out of date political systems.

So there is no one answer. Also British policies varied from time and olace. The policy in 1780 Bengal was different from that of 1900 Punjab.