Investment, Trade and the Imperial Connection
BRITISH rule inextricably connected India with the international financial and commercial economy, unleashing during the nineteenth century a range of new influences and forces upon the sub-continent’s development. Of these, one of the most striking was a large inflow of foreign capital. Whilst statistics, especially on the period before 1870, cannot be definitive, it seems that the total volume of British investment in India stood at about £160 million in 1870 rising to £380 million by 1913 [125: 341]. The 1870 figure perhaps then represented some 20 per cent of all British overseas investment but thereafter the tendency was for investment in India to rise less rapidly than elsewhere so that the proportion by 1913 was probably around 10 per cent. Even so, these amounts must still have been substantial within the context of an economy chronically short of capital and by 1914 possibly up to three-quarters of total investment in modern business and industry in India had come from abroad [123: 55]. One obvious consequence was extensive foreign ownership within the modern sector. Again, precise statistical assessment is difficult, but by Independence, certainly, the foreign share of capital invested was around or above three-quarters in key areas such as jute, mining, tea planting and shipping [111: 4].
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