technology, a new system of economic
Phases of Industrialisation
There were three distinct phases in the development of large-scale industry in
colonial India. These phases overlap to some extent, but are distinct enough
to be roughly identified as: (1) 1850–1914; (2) 1914–39; and (3) 1939–47.
First Phase The first phase was dominated by the Europeans managing
agencies. It saw the development of light manufacturings, and planting and
mining industries, which relied heavily on markets abroad. The tea and jute
industries of eastern India were almost pure export-led industries, and the
greater part of the cotton textile industry of Bombay also catered to markets
in the Far East. There was no serious competition as yet with the industries of
Britain, in the domestic market of India. The coal industry, while depending
on the domestic market, was principally consumed by the railways running to
the colonial ports. Steel, which did promise a revolutionary breakthrough
based on the domestic market, was produced in too small a quantity to make
any perceptible difference to the total value of industrial production. The
industries of the period developed in areas of natural advantage, based on
rudimentary technology, easily imported from Britain.
Second Phase Coming to the second time span, certain new features strike
us. This second phase of industry, distinguished from the earlier one by its
orientation to the domestic market and from the succeeding one by its simpler
technology, saw the development of deadly competition with the industries of
the advanced West, for the possession of the mass market for consumers’
goods within the country. There sprang up, by the side of the older cotton
textiles industry, a new range of light manufactures, all protected by war,
tariff and depression. The production of cotton textiles, sugar, paper, etc.,
surged ahead within the sheltered domestic market, helped by the relatively
simple technology. By the end of the period, Manchester cotton textiles, Java
sugar and foreign paper of all sorts except newsprint, were more or less
eliminated by burgeoning manufacturing units owned by Indian businessmen
and industrialists. One critical development that went beyond these changes
was the Greater Extensions Programme of Tata Iron and Steel Company
(1916-24), the completion of which for the first time, made the steel industry
a considerable one.
Third Phase Without this development,              the third phase, marked by the