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 of India Act 1858. A new British government department, the India Council, was created to handle the governance of India, and its head, the Secretary of State for India, was entrusted with formulating Indian policy. The Governor-General of India gained a new title (Viceroy of India), and implemented the policies devised by the India council. As a result of their relatively small presence in the country the British resorted to many methods to retain control of India. Once it had established its factories (trading bases) in India the East India Company started to highlight the benefits of trade with them