Trade Disruption, Industrialisation, and the Setting Sun of British Colonial Rule in India

Colonial trade prompted the colonies to specialise in primary products. Did this eliminate industrialisation opportunities in the colonies, and did it make them more politically dependent on the coloniser? To answer these questions, we examine the impact of the World War I trade shock on industrial growth and support for the anti-colonial movement in India. We find that districts more exposed to a drop in imports experienced faster industrial growth in 1911-1921, thereafter remaining on a higher level of industrial employment. All evidence points to an increase in Indian productivities as the reason for this, suggesting that liberal trade policies may not have been optimal for colonial India. We also find that districts, which industrialised faster thanks to WWI were more likely to support the Indian National Congress. This is consistent with the view that specialisation in primary products made the colonies more politically dependent on the coloniser.