• With the victory of the British in the Carnatic wars and more importantly in the Bengal battles began the process of their conquest of India. By 1765 the British had not become the virtual rulers of Bengal, Bihar and Orissa, but also begun to dictate terms to the Nawabs of both carnatic and Awadh. This was a gradual process by the end of which, all parts of India came under British control.

British conquest of India in stages:-

  • The British colonial rule in India is generally divided into three stages:

First stage(1757-1813) represents the mercantile phase

  • This ‘mercantilist’ phase was marked by direct plunder and the East India company’s monopoly trade functioning through the investment of surplus revenues in the purchase of Indian finished goods for export to England and Europe.
  • During the mercantile phase the aim of all activity was to accumulate wealth. In order to pursue a favourable trade, the British company started aggressive policies in India.
  • The government passed the Regulating Act  and the Pitt’s India Act to gain more and the direct control over the affairs of the company. The company officials transferred their fortunes acquired in India to England. The financial bleeding of India started with the British gaining hegemony over Indian territories.
  • New revenue settlements were imposed upon the agrarian structure.
  • They fought several wars, crushed many princely States and brought them under the colonial authority. Soon the mercantile phase came to an end.

Second stage(1813-1860) represents the free trade phase

  • By the dawn of the 19th century, the British became an industrial power following Industrial Revolution in England. It was in need of raw material to feed its industries. The emerging capitalist class found the Company a stumbling block for its market.
  • During this period, India was converted rapidly into a market for British textiles and a great source for raw materials. Traditional handicrafts were thrown out of gear
  • The Company’s monopoly in India was bitterly attacked by the British industrial community. Thus, the need for raw material and markets for the British manufactured goods resulted in the formulation of free trade policy towards India.
  • The special feature of this policy was that it was a one way traffic wherein British goods entered India virtually free while Indian products entering Britain faced high tariffs.
  • The protective policy towards British trade was thoroughly guarded, leaving India-made products to face stiff competition.
  • Revenue and expenditure policies of the Britishers were also exploitative in nature. Huge expenditure (expenditure on army, pensions and salaries of Englishmen, etc.) incurred by the British imperial power had been borne by Indians by paying high doses of taxes.

Third stage(1860 onwards ) represents the finance capital phase

  • During this phase, finance-imperialism began to entrench itself through the managing agency firms, export-import firms, exchange banks, and some export of capital.
  • Britain, of course, kept India as her most important colony where British capital could hope to maintain a haven. For her survival, Britain decided to make massive investments in various fields (rail, road, postal system, irrigation, European banking system, and a limited field of education, etc.) in India by plundering Indian capital. It is said that ‘railway construction’ laid the foundation for a new stage of colonial exploitation
  • With the opening up of the country, private capitalist investment from Britain came to India. But unfortunately, such British investment was not meant for India’s industrial development.
  • The basic motive behind such investment was the commercial penetration of India, its exploitation as a source of raw materials and markets for British manufactures.
  • This was, in fact, one of the principal contradictions of imperialism-colonialism in India.
  • Britain’s supremacy in the world economy for nearly 200 years lay in the utter neglect and plunder of her most important colony India. India’s economic life was redirected towards servicing the interests of British imperial power. Internal needs of the country were of no concern to the lone colonizer of the world.