Britain and India between the Wars

Abstract

In the nineteenth century, the British succeeded in deriving growing benefits from their Indian territories. With dominion firmly established, and the colonial connection beginning to take its modern shape, India came to fit less awkwardly with British economic interests. India now became Britain's best customer for her most important industry, a useful supplier of raw materials, a safe field for capital investment, a crucial element in her balance of payments and key to the multilateral system of settlements which sustained the continued expansion of her world trade.The pattern of trade and investment, which brought such signal benefits to Britain, depended upon dominion over India. Dominion had given Britain the levers of power to open up Indian markets to her trade,knock down the internal barriers to the free flow of her goods, and prevent the erection of external tariffs to protect the Indian product.Dominion enabled Britain to build, at Indian cost, a system of transport by rail and road which linked the ports, themselves the creation of British rule, to their hinterlands, and to tilt the advantage in favour ofher own nationals who dominated India's foreign trade; it helped to give British shipping, banking and insurance a virtual monopoly over the invisibles of Indian trade and it imposed upon India a currency and banking system which protected the ratio of sterling to the rupee. Butthese balance-sheets of imperialism do not reveal the full importance of the Raj to the British world system. Just as India's growing foreign tradehelped to push British influence into east and west Asia alike, so her growing military power underwrote that influence, whether formal or informal, in those regions. An oriental barracks, where half of Britain'sworld force was billeted free of charge, India was the battering ram of British power throughout the eastern arc of its expansion. Before the First World War, India seemed triumphantly to have justified the efforts of generations of empire-builders.