The most important characteristic of India’s foreign trade throughout the colonial period was __________ .
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → the generation of a large export surplus.
Under colonial rule India exported primary products such as raw silk, cotton, wool, indigo and jute, and imported finished goods from British factories, with Britain keeping a monopoly over this trade. India sold far more than it bought, so throughout the period its trade showed a large export surplus, exports greater in value than imports.
This surplus came at a huge cost: essential goods such as food grains, clothes and kerosene were scarce at home.
Why the other options are incorrect
Option (1) Incorporation of Tata Iron and Steel Company in India. — Incorrect. TISCO was set up in 1907, but it belongs to the history of industry, not of foreign trade.
Option (3) Regional balances. — Incorrect. There is no such feature of colonial trade.
Option (4) Inflow of gold or silver into India. — Incorrect. The export surplus brought no gold or silver into India. It was used to pay for the colonial government’s office in Britain, for wars fought by the British and for imports of invisible items, all of which drained India’s wealth.
NCERT (2025-26): “1.5 Foreign Trade … Consequently, India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute etc. and an importer of finished consumer goods like cotton, silk and woollen clothes and capital goods like light machinery produced in the factories of Britain. For all practical purposes, Britain maintained a monopoly control over India’s exports and imports. As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia (Iran).… …The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus. But this surplus came at a huge cost to the country’s economy.… …Furthermore, this export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war, again fought by the British government, and the import of invisible items, all of which led to the drain of Indian wealth.…” |