Assertion: India has been an important trading nation since ancient times. 

Reasoning: The restrictive policies of commodity production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

India has been an important trading nation since ancient times. But the restrictive policies of commodity production, trade and tariff pursued by the colonial government adversely affected 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.