BRITAIN & INDIA’S COTTON INDUSTRY
“….In the 16th and 17th centuries, India produced the best cotton textiles in the
world. These were exported to Europe, where they were highly valued. Britain
wished to develop its own infant textile industry, however, and used its colonial
power to protect producers by halting exports of Indian textiles to Britain. Instead,
Britain arranged to dump Indian exports cheaply in continental [mainland] Europe,
undercutting domestic production (and thereby its competitors) there. Once the
British industry was established, Britain imposed tariffs on Indian textile exports
that drove up the price of all Indian textile exports to Europe. All Indian cotton
textile exports to Europe were shipped via Britain, where they faced tariffs that
were 5-25 times higher than those for British cotton textile exports. Indian cotton
textile producers could not compete with British exports in Europe or India, because
British policies had eroded their comparative advantage. Cotton textile production
in India declined dramatically and disappeared as an export commodity forcing
Indian producers to shift to specializing in and trading raw cotton….”
A World of Difference: Encountering and Contesting Development,
by Phillip W. Porter & David R. Faust, 2009
Question:
How did Britain use tariffs to change the Indian economy to benefit Britain’s
economy?