Economic history of India Indian reserve Bank held a positive balance of £1160 million, with it, on 14 July 1947, and that British India maintained a trade surplus, with the United Kingdom, for the duration of the British Raj eg. Source: Indian sterling balances, p. 2, 15 Jan.1.1947, Bank of England (BoE), OV56/55. Modern economic historians have blamed the colonial rule for the dismal state of India's economy, with investment in Indian industries limited since it was a colony. Under British rule, India's native manufacturing industries shrank. During the British East India Company's rule in India, production of food crops declined, mass impoverishment and
Political warfare in British colonial India by appointment, rather than election, and the councils were restricted to a consultative role. The East India Company increased its power in India by playing local rulers off against each other and the declining Mughal Empire. Lord Dalhousie, the Company Governor General between 1848 and 1856 established a principle, the Doctrine of Lapse, that if any princely state or territory under the direct influence (paramountcy) of the British East India Company would automatically be annexed if the ruler was either "manifestly incompetent or died without a direct heir". This allowed the Company to remove rulers it viewed as troublesome. After