The reasons for the domination of Indian modern industries by foreign
machinery and equipment, shipping and insurance companies, banks,
marketing agencies, government officials and political leaders.
Government’s policy of favouring foreign capital as against Indian capital.
Government’s railway policy of discriminating against Indian enterprises by
fixing freight rates in such way which made the import and distribution of
foreign goods easier and cheaper, and the distribution of Indian goods more
difficult and costly.
The advantages and disadvantages of the foreign-owned industries to
The only advantage that the Indians got out of these industries was the
creation of unskilled jobs.
But the disadvantages far outweighed the advantages. The Indian workers in
these enterprises were extremely low paid and had to work under extremely
harsh conditions for long hours.
Moreover, most of their technical staff was foreign and hence the huge
salaries earned by them went out of the country.
And also these industries purchased most of their equipment abroad.
Main features of Indian industrial development were:
Slow and painful progress of Indian industries and their inability to
compensate even for the displacement of the indigenous handicrafts in terms
of production as well as employment. The main reasons for this feature of
Indian industrial development was the British policy of artificially restricting
and slowing down the growth of Indian industries by not giving them any
protection and financial help in their period of infancy.
Almost complete absence of heavy or capital goods industries, without which
there can be no rapid and independent development of industries.
It also suffered from extreme regional lopsidedness. Indian industries were
concentrated only in a few regions and cities of the country. This uneven
economic development not only led to wide regional disparities in income but
also affected the level of national integration.
Birth and growth of new social classes: An important social consequence of
even this limited industrial development of the country was the birth and
growth of two new social classes, the industrial capitalist class and the
modern working class, which, though formed a very small part of the Indian
population, represented new