14 - British imperial policy and the spread of modern industry in India

Summary

PRIORITIES OF THE IMPERIAL ORDER

India was the richest prize of the era of colonialism and the British held on to her well beyond the age of imperialism, in which Britain ceased effectively to be the leader of world capitalism. India occupied a special position in the British imperial order, and much of Britain's long-term policy with regard to India in the period covered in this book can be explained in terms of an effort to keep her in such a position. Up to 1914, India formed the biggest single foreign market for traditional British exports – particularly for cotton textiles, but to a lesser extent for engineering goods; India's exports to hard currency areas provided the critical balancing item in the current balance of payments of the British Empire and more particularly, of Britain, with the rest of the world; the payments for ‘home charges’, the profits on capital accumulated in India by British nationals and the payments for the financing and transport of Indian exports and imports served as the mechanism for the transfer of the surplus from India to Britain. India was useful less as a field for the reinvestment of profits made by British nationals elsewhere than as the dependable source from which part of the needed surplus for maintaining the British-controlled gold standard and the political apparatus of Pax Britannica was derived.