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
Indirect rule Subject) of domination by a tiny group of foreigners of huge populations is laid out in Lugard's influential work, "The Dual Mandate in British Tropical Africa". The largest application of Indirect rule was in British Asia, in hundreds of pre-colonial states, first seen at work under the East India Company's system of subsidiary alliances in the Indian subcontinent. The areas thus brought into the British sphere of influence became known as the Indian Princely States. Subsequently, the same principle was applied in strategic regions on the sea routes to India, especially in the Persian Gulf protected states. In the British