

India's deindustrialization  - rtpg
http://www.tcd.ie/Economics/staff/orourkek/Istanbul/JGWGEHNIndianDeind.pdf

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rtpg
In a previous news post about Afghanistan in the 60s, I mentioned British
colonial rule as a major player in the deindustrialization of India. This was
something I heard in my economics class a while ago, so I looked more into it
and found this paper.

Section 2 of the paper gives a nice narrative of the events. In summary the
paper proposes two events played a role in destroying the textile industry of
India in the 18th century. Firstly, the political turmoil at the time of the
dissolution of the Mughal empire, which reduced agricultural productivity,
among other things. This raised prices of food, thus of manufactured goods
such as textiles.Secondly, East India Company rule led to pro-British
policies, namely reducing import tariffs and destroying the industry because
it couldn't compete to the more advanced productivity of the British goods.

This second point is something we see often now through the mess of the
Washington consensus: We get rid of trade barriers in countries whose
industries couldn't possibly compete because they've not yet developed
properly. This destroys any possibility of a local market being created
properly. Infant industry protection is necessary to allow growth in beginning
stages of developement, and destroying trade barriers is the worst thing we
can do on that front.

