- Counter to the Western narrative of India’s poverty being rooted in Hindu Dharma, it is the centuries-long exploitation by European powers, especially the British, that robbed India of its enormous economic might.
- The British siphoned off approximately $45 trillion worth of wealth from India, fueling their much-touted industrial revolution at home.
- While being credited with developing India’s railway network, well-respected historians note that these were not gifts but rather strategies benefiting British capitalists, with the costs borne by Indian taxpayers.
For centuries, a narrative wrongly implicated India’s Hindu majority as the cause of its economic struggles. However, at the start of the twenty-first century, a stark truth emerged, revealing India and China as once the wealthiest nations, now victims of centuries-long exploitation by European powers, particularly the British.
Guided by Professor Angus Madison, a research team uncovered the history of global wealth, challenging the misconception that India’s economic challenges were rooted in its Hindu culture. Astonishingly, India boasted a remarkable 34% share of the world’s wealth for a millennium, only to see it decline to less than 4% by the time the British were eventually ousted from the country in 1947.
Within a mere century of British rule, the Indian agriculture sector underwent a radical transformation from being a major grain-producing economy to a cash-crop industry with a focus on poppy and indigo farming. Famine struck, and a third of the population perished as the British multiplied their revenues by exploiting desperate farmers who sold everything just to survive.
The British, however, didn’t stop at looting wealth. They took gold, silver, minerals, food grains, and even fodder. The once-fertile land turned into a famine zone, with millions dying of hunger while the British diverted food meant for the starving to their armies. The irony hit hard as those who used to offer food respectfully were now dying of starvation, their bodies left for dogs to consume.
Salt, a basic need, became a tool of exploitation, with heavy taxes imposed by the British causing salt deficiency and deaths, especially among unborn children. In 120 years, India faced 31 major famines, with the last one in 1943 claiming over 3 million lives in Bengal.
Deindustrialization, a consequence of deliberate policies, furthered the decline of native industries. Stringent land revenue systems and heavy taxation exacerbated economic disparities, perpetuating a vicious cycle of poverty. The economic exploitation orchestrated by the British left an indelible mark on India’s socio-economic fabric.
“England’s industrial supremacy owes its origin to the vast hoards of Bengal and the Karnatik being made available for her use….Before Plassey was fought and won, and before the stream of treasure began to flow to England, the industries of our country were at a very low ebb.” – Sir William Digby (1849-1905), British writer
The dark legacy of British colonization in India is epitomized by the “drain of wealth,” a term coined by economist Dadabhai Naoroji. According to Madison’s research, nearly $45 trillion worth of wealth had been siphoned off by Britain and poured into their own economy, thus fueling their industrial revolution. The British East India Company, initially a trading entity, evolved into a tool for colonial control, systematically siphoning off India’s resources to bolster Britain’s economic prosperity.
Here’s what Sir William Digby, a British writer from 1849 to 1905, had to say about the extent to which Britain’s economy gained from the exploitation of the Indian economy: “England’s industrial supremacy owes its origin to the vast hoards of Bengal and the Karnatik being made available for her use….Before Plassey was fought and won, and before the stream of treasure began to flow to England, the industries of our country were at a very low ebb.”
Amidst this exploitation, the British are often credited with gifting India assets like railways. However, as Shashi Tharoor notes in ‘An Era of Darkness,’ the railways were “not a gift from the British taxpayers. It was a gift to the British capitalists, paid for by Indian taxpayers.” His incisive words further underscore the reality of British governance in India: “We were governed by strangers who knew nothing of our land and cared less for its people.”
Will Durant, the well-known American historian (1885-1981) , echoes Tharoor’s words: “It might have been supposed that the building of 30,000 miles of railways would have brought a measure of prosperity to India. But these railways were built not for India but for England; not for the benefit of the Hindu, but for the purposes of the British army and British trade.”
Durant further notes that “Commerce on the sea is monopolized by the British even more than transport on land. The Hindus are not permitted to organize a merchant marine of their own; 90 percent of all Indian goods must be carried in British bottoms, as an additional strain on the starving nation’s purse; and the building of ships, which once gave employment to thousands of Hindus, is prohibited.”
 Angus Madison: The World Economy, Volume 1: A Millennial Perspective and Volume 2: Historical Statistics; https://www.oecd-ilibrary.org/development/the-world-economy_9789264022621-en
 William Digby: Prosperous British India A Revelation; https://archive.org/details/in.ernet.dli.2015.177866/page/n71/mode/2up; p. 30
 Shashi Tharoor: ‘An Era of Darkness: The British Empire in India;’ https://www.academia.edu/41737698/Shashi_Tharoor_An_Era_of_Darkness_The_British_Empire_in_India_Aleph_Book_Co_201620200125_64671_1r78due
 Will Durant: ‘The Case For India;” https://archive.org/details/TheCaseForIndia-English-WillDurant/page/n17/mode/2up; p. 25
 ibid; p. 26