Which of the following statement (s) is/are correct in the context of India's foreign trade during colonial times?

Statement 1: The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus.

Statement 2: 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 (Iran) and Persia (Sri Lanka).

Only Statement 1 is correct.

Statement 1: The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus. This is correct.

Statement 2: 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 (Iran) and Persia (Sri Lanka). This is partially incorrect. Ceylon means Sri Lanka and Persia means Iran.

Since ancient times, India has held significant importance as a trading nation. However, the colonial government's policies regarding commodity production, trade, and tariffs had a detrimental impact on the structure, composition, and volume of India's foreign trade. As a consequence, India became primarily an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, and jute, while relying on imports for finished consumer goods like cotton, silk, woollen clothes, and capital goods like light machinery produced in British factories. Essentially, Britain maintained a monopoly over India's exports and imports, with over half of India's foreign trade being restricted to Britain, and only a limited trade allowed with other countries such as China, Ceylon (Sri Lanka), and Persia (Iran). The opening of the Suez Canal further strengthened British control over India's foreign trade.