Indian Journal of History of Science, 19 (3): 215-223 (1984)

INDUSTRIES IN INDIA DURING 18TH AND 19TH CENTURY

USHA RANI BANSAL * Department of History Banaras Hindu University Varanasi 221 005

and

B. B. BANSAL Department of Mech. Engineering Institute of Technology Banaras Hindu University Varanasi 221 005

(Received 24 January 1933; after revision 4 April 1934 j

The period of 18-19th century was characterised by the industrial revolution in Europe. This was marked with increase in wealth, population and production. The rapid development of industries demanded markets for the goods. The race of monopolising markets consequently established colonies and colonial empires in Jesser developed countries of the world which also resulted in the British domination over India. Imperia] policy, to a large extent, affected and conIroned tho development of entire Indian ind ustry during the period.

During the 18th century, main industries in India were textile, cotton and silk, ship-building, handicrafts, and other arts and crafts such as tannery, perfumery, paper making etc. These were mainly in the hands of Indians. The decay of Indian trade and industry set in towards the end of the eighteenth century. Prominent causes of decay were: the Imperia! policy 10 protect British industries, the competition with cheaper goods produced by machines, growth of new habits and tastes towards luxury goods from West. With this began an era of development of new industries in India. In the present paper, the status and development of some important industries in India during the period has been outlined.

INTRODUCTION

The published accounts of European travellers show that India in the seventeenth and early part of the eighteenth century was economically more advanced than most of the European nations. She had flourishing industrial centres, the products of which were well-known all over the world for their quality, low cost and craftsmanship, Traders from various parts of the world visited India and exchanged their gold, silver and precious stones with cotton textiles, saltpetre, tobacco, indigo, silk, brocades, etc, The balance of trade was always in India's favour. This unique feature of her economy attracted widespread notice and comments by almost all foreign observers. Thus, at a time wben the commercial and industrial revolution broke in Europe, India was regarded as the richest nation of the world.

·Pre>enl address: Central Mechanical Engineering Research Institute, Durgapur 713 209.

L'SHA RA:-';I B":\SAL A"D B. II. BAl'>SAL

India's trade prosperity was pinching the EUropeans bitterly. During this period, mercantilist European statesmen looked with great disfavour upon the export of bullion in exchange with Indian goods. Daniel Defoe in 1708 wrote in his weekly review about this wealth d rain from England to India and asked the government to take stern measures agains: it. For the prohibition oflndian goods, Acts 11 and 12 ofWilliam III Cap. I (J were i ntroduced, Other F uropean countries also made similar efforts to penalise the i rnport and use of Indian goods. Baines wrote that all the European governments thought it ncccvsary to prohibit or load the I ndian goods with heavy duty to protect their own manufacturers.

The lcgi-huion could not heir much in tl1i.., matter but the victory of Plassey and c xcrcixe () I' 1)01 it iea I power in India changed I he con d i ti ens d rust ica II yin less than 75 )cars ( 1757 10 I X29). I ndiu was reduced from the position of rnanufact uring COli ntry tot hat or a supplier of raw materials. By 1830, the English people began 10 look to J ndia lor rcndcri ng a considerable portion of raw material upon which Great Britain \ m ost val ua b Ie man u luct u res depended.

There were several factors responsible for the decline of Indian industry in the eighteenth and nineteenth centuries. In the first place the political disintegration that followed with the fall of M ughal Empire adversely affected the economic condition of India. The success of British power in the battle of Plassev in 1757 paved the way for Europeanisation of trade and industry of the country. At the time of British conquest of I ndia, the industrial revolution occurred in England. The capitalist class of England was ready h) take full advantage of the technological inventions while India. although had a com mcrcial class, had no industrial traditions. In the early days of the conquest, t he Fast I nd i a Com pan y was eager to make money q u ie kly and in t he process ru t h less Iy exploited Indian manufacturers. Heavy tariffs were imposed on various Indian goods. Moreover, fast rate of increase in the production of power-s-driven machines further deteriorated the conditions of I ndian industry, The market of the chief Indian exports began to fail and, therefore, Company took up the supply of raw materials to England at cheaper rates to augment their revenue. By the second half of eighteenth century India became a fa \II material supplier at thc rates fixed by the Britishers according to their interests and a market for the finished goods produced in European countries.

Lastly, the introduction of European Agency Houses led to the ouster of Indian bankers who then turned themselves to zarnindari. As a result of the decline of Indian trade and industry, it process of ruralisation started in the country. Thus at the time when Europe started industrialising herself, an opposite trend began in India.

[STABLISHME"T Of Nrw INDUSTRIES

DUring the period the Indian industry was on its fast decline, the policy of free trade was being advocated in Europe. British Government then threw the Indian market

J NDUSTRlES I N INDIA D liRING 18TH AND 19TH CENTlJR Y

217

open to the European world. Foreign capital began to flow in the urban industrial sector. It was initially invested in foreign trade and plantation industries. After 1848, large amount of foreign capital was invested in India for the construction of railways and communications which revolutionised the entire process of industrialisation of the country. Various industries such as cotton plantation, coal mining, paper, iron and steel, etc. which came up during the later half of the nineteenth century are discussed in the following sections.

Cotton Industry

India is a birth-place of cotton manufacture. It probably flourished here before the dawn of authentic history. Indian Cotton trade was extensive from the earliest times to the end of the eighteenth century. In the beginning of nineteenth century, British Industry started flourishing while Indian Industry declined. Generally attributed causes for the decline of the Indian cotton industry are-the invention of powerloorn and other mechanical appliances, monopoly of trade created by East India Company in their own favour, the imposition of a heavy tariff on Indian cotton and cotton goods in England, exemption of duty on British staples imported in India, and raising of duties on Indian goods from time to time.

Following tables snow the imports and exports of cotton goods in India. 1L is quite clear from the tables that by 1835, Indian manufactures were almost displaced from the market.

Year

1814

1821

1828

1835

British cotton, imported, '000 yards

8[·g

1913·8

4282·2

Year

Exports, '000 £

Imports, '000 £

1815 1832

1,300 100

By 1840, the East India Company ceased to be directly interested in Indian trade.

In its new role as an administrator, it presented a petition to British Parliament for removal of invidious duties which discouraged and repressed Indian industries. Company's capitalists and Indian capitalists were encouraged to establish industries in India.

21g

lISHA RANI BANSAL AND B. B. BANSAL

The nature and extent of this new industrial awakening in India is well illustrated by the history of cotton mills. By 1850, the European factory system became sufficiently developed and coordinated to be transplanted to the east. First cotton mill was started in Bombay in 1854 and by the end of nineteenth century, their number was increased to 193 of which 82 were in Bombay area alone. After 1877 several cotton mills were started in number of other places namely, Nagpur, Ahmedabad, Sholapur, Kanpur, Calcutta and Madras. Jamsetji Tata and Morarji Gokuldas were the first Indian manufacturers who started mills in Nagpur and Sholapur respectively.

The mills were bui It mainly on Manchester and Lancashire designs. These designs, however, were not according to the requirements of the Indian climate. Most or t he machi nes installed in t hesc mills were of Briti sh make. I ndia slav i shly followed the practice of Lancashire and used mule spindles and plain looms while for coarse, cheap and plain goods woven in India there was no justification in using such \001115 and spindles. It was Jarnsetji Tata who, for the first ti me in India, installed ring spindles In his mill at Nagpur.

An investigation made on the conditions in the Textile Industry or India by British United Textile Factory Worker's Association has reported in 1926: "Taken us whole, the mills in J ndia compare favourably as regards building construction, modern machinery, and up to date labour-saving devices, with the mills in Lancashire".

A large amount of capital was invested in cotton than in any other Indian industry.

Most stri king fact about it is that the foreign capital which had dominated other industries, had only a small place in cotton industry. The profits from these mills \\ ere fairly satisfactory. In the eighties, some mills returned all the capital ill the llrst four years. Before the First World War, these mills paid I I to 12 per Lent dividends on the investments.

The production of these cotton mills had undergone a great change since their establishment. In the beginning they were mainly spinning coarse yarn but with the dawn of t wentieth century, these mills started consuming the yarn for weaving clothes. There was a tendency to install looms to capture home market for cloth rather than foreign market for yarn. The Swadeshi movement and boycott of foreign goods gave further Impetus to the cotton industry in India.

Plantation Industries

Various plantation i nd ust rics namely, indigo, tea, coffee and rubber were developed during 18th-l9th century. Their status during the period is outlined in the following sections.

Ixnroo : India from time immemorial had been famous for its dyes. Indigo was chiefly used for textile dying. In the earlier part of eighteenth century, Indian indigo

INDUSTRIES 11' IKDIA DURING 18TH ANO 19TH ('ENTCRY

219

trade was on its decline because the production from West Indies and Southern American colonies was more efficient. With the growth of cotton manufacturing by power in England and American and French revolutions towards the end of eighteenth century, the production of indigo began to be developed in India mainly under the influence of Europeans.

Indigo remained an important article of export for quite some time and European planters reaped large profits. I n I R3 I, there were 300 to 400 indigo factories in Bengal and in 1~87, 415 factories were reported to be in Azamgarh district alone. In J829, about 1·3 million acres were under indigo plantat ion and about 9 million pounds of indigo were exported. Chief centres for indigo plantations in India were Bengal, Bihar, Eastern U. P., Orissa and Madras. England was the principal market from where it was re-shipped to other parts of the world.

In the earlier days, processing of indigo was carried on manually. By the mid of nineteenth century steam was being used as a source of heat for the tanks and power for stirring and pumping.

Towards the end of nineteenth century, the sharp competition offered hy ~Yllt hctic dyes produced in Germany made the cultivation of natural indigo Unprofitable. The acreage and production of indigo fell rapidly from 1897. In 1901-02, the exports became less than half of those in 1896. In 1904-05, the area under cultivation was about one third of that in 1894-95. End of ni neteenth century, thus led to the virtual extinction of indigo industry.

TEA; In addition to indigo plantation, Europeans were attracted towards the cultivation and manufacture of tea in India. During the eighteenth century, the company had proposed for the introduction of tea, but it was turned down by the directors in England. In 1834, the plans for the introduction of tea in India were accorded sanction. Seeds, plants and labourers were brought from China and experimental gardens were started at a number of places along the south slopes of the Himalayas and in Assam. Indian tea was marketed to London for the first time in 1838 and the Assam Company was formed in 1839. During the first decade of its operations, the Assam Company made no profits and lost a considerable capital. In the early fifties, it began to yield large profits and with t his began the extension of tea plantation. The following table shows the increase in area under tea cultivation and production in Assam for the period 1850-1871.

Year Area under Cul- Output of tea
tivation, acres '000 pounds
1R50 I,R76 216
1853 2,425 366·7
1859 7,599 1205·7
1869 25,174 4714·7
1871 31,303 625 [·1 220

USHA RANI BANSAL AND B. B. BANSAL

Tea plantation gave opportunity of employment to a large number of persons since most of the processes were carried out manually. It was estimated that in 1887 about 500,000 workers were employed in tea plantations.

COFFEE: Coffee is another plantation industry which was developed under the influence of Europeans. East India Company took interest in coffee growing as early as 1823. Great inducements such as grant of land on long lease were given for coffee plant i ng. In 1830, some 4000 acres were under coffee cultivation but the yield was poor. Some experiments in the highlands of Southern India proved to be successful and within few years Mysore and the surrounding hilly region became an important coffee producing area and remains the sale source of coffee supply even today.

The growth of the industry remained steady between 1850 and 1860 and later there was a regular boom when many Europeans set out plantations. However, during the period 1877-1887, as many as 263 plantations were abandoned because of competition offered by cheap coffee from Brazil. During the next decade coffee suffered still more. With the rise of prices during the First World War and post-War period, the industry became more profitable and area under cultivation rose gradually.

RUBBER: Rubber is the most recently developed plantation industry. It was introduced from Brazil in the 1870's at the instance of the Government. Maharaja of Travancore introduced rubber into his state in about 1900. From there the planting spread to the neighbouring territories of Cochin, Coorg and Malabar. Leadership in planting was taken mainly by Europeans. Progress in the beginning was very slow but became more rapid after 1906.

Coal Mines and Mining

Coal is one of the most essential commodities of modern economic life. Although it has been known since ancient times, its production on large-scale has a short history. The British Magistrate of Chhota Nagpur, Mr. S. G. Heatly, was perhaps the first adventurer who undertook large-scale coal mining. In 1774, Mr. Heatly together with Mr. John Summer obtained the privilege of mining coal in Pachete and Birbhum from Warren Hastings, the t hen Governor General of Bengal. Later, M r. Redferne also j oi ned this venture and they were given exclusive right to mine and sell coal in Bengal and its dependencies. The joint enterprise operated six mines and produced 90 tons of coal in 1777. This venture suffered a great set-back due to the transfer of Mr. Heatly,

In 1814, Mr. Jones, a retired mining engineer was sent to India at the suggestion of Warren Hastings to explore the possibilities of coal mining in India. Mr. Jones found the prospects of coal mining in India very bright. He then, opened a mine at Raniganj with a financial advance of Rs, 4O,()(M)f- from the Government. He soon died and a Calcutta firm which had acted as guarantor, took over the mining operations. By 1831, this Company was mining 15,000 tons of coal annually. Subsequent to the success of this mine, several other mines were opened at Raniganj. In 1843, a few consolidations resulted in the formation of the Bengal Coal Company.

INDUSTRIES IN INDIA DURING 18TH AND 19TH CENTURY

221

The progress of coal mining in the begi nning remained slow due to lack of demand for coal. The transportation of coal through Damodar River could not take place round the year as the water remained shallow for most part of t he year. Still, in 183 I, the East India Company has sent coal to Singapore, Madras, Ceylon, and Penang for its steamships. The output of coal was 36,000 tons in 1839 and 91,000 tons in 1846.

The turn of the half century opened up new horizons for coal mining also. Establishment of industries and its auxiliaries resulted in increased demand for coal. Moreover, the introduction of rail transport between Calcutta and Raniganj in 1854 also helped in regular transportation of coal. By 1860, 50 colliaries were functioning in the Raniganj. The number of coal mines in T ndia rose to 555 in 1905. The table below shows the total production of coal in India.

COAL PRODlJClION IN INDIA

Year

1831

1839

1846

1868

1880

1900

1912

Coal Production (Thousand Tons)

J 5

36

91

500

1,000

6.000

12,000

The table dearly shows that the production of coal in India steadily increased.

The increase in production had been much faster towards the later half of the nineteenth century. Increased demand of coal during this period exemplifies that the process of industrialisation had set-in by that time.

Paper Industry

The manufacture of paper by hand had existed in India for centuries but the production of paper through machines had started sometimes in 1870 with the establishment of Bally Mills in Hooghly. It started producing paper with a single machine only. The popularity and demand of machine-made paper encouraged Bally Mills to install 4 more machines. Bally Mills produced nearly 5,000 tons of paper per year. Due to certain reasons this company was liquidated in 1905. The second paper min was established at Titagarh in 1884 and the third at Hooghly in 1894. The paper mill at Hooghly was subsequently taken over by Titagarh Paper Mill.

The oldest of the up-country mills the Upper I ndia Couper Paper Mills Company Limited was established at Lucknow in 1879. Another Min with a single machine was erected by Maharaja Scindia at Gwalior in 1881. This had eventually to be closed down as it could not be run at profit and later on its management was taken over by Bengal Paper Mill Co. Ltd. It was finally shut down in 1922. The Deccan Paper Mill Co. Ltd. commenced production in 1887 at Poona but ceased to operate in 1924 owing to the depressed conditions of the trade.

222

USI1A RANI BANSAL AND R. R. BANSAL

Bengal Paper Mil! Co. Ltd. had been the most important paper mill which was situated at Raniganj, This company was formed in 1891 at first with one machine but three more machines were subsequently added in 1892,1900 and 1922. Of three other paper mills of minor importance, two were in Bombay and one was at Punalur in the Travancore State. Only common and cheaper kind of paper was produced at these mills.

Iron lind .)"/('1'1

Steel was u-ed in I nJia for weapons, for decorative purposes and for various tool- and i mplerneuts. Remarkably high grade articles were produced. The famous i ron col umn at Delhi is one of the examples. Remains of old smelting furnaces have been found throughout the country. Tron was produced by widely scattered communities in t heir age old traditional way.

The history of production of iron and steel in the cou ntry by modern techniques date back to 1777 when M .'S Farguhar and Motte sought permission to bore cannon and to cast shot and shell in Jharia in the neighbourhood of the coal mine of Mr. Heatly. The enterprise had to he abandoned after nearly two years. In the year 1808, Mr. Duncan establ ished a small factory under the protection of the East India Company but this too was closed down. Mr Josiah Marshall Heath was granted exclusive right to smelt iron and produce steel in t he Company's domains in 1825 on the request of the Government of Madras. Mr. Heath was advanced loan also hy the Company. He could not perform well. By 1835, his debt rose to Rs. 5,71.000 and by 1849 the debt further rose to Rs. 8,22,240. No appreciable quantity of iron could be produced. The East India Iron Co. took over its property in 1853. Although it manufactured 2150 tons of pig iron in 1855, it suffered a loss of £ 392. The holdings were finally' taken over by the Government in 1874.

I nvestigations were made to know the causes of failure of these ventures. Iron samples were sent to England for testing. These were found to be better than those imported from Sweden. One of the investigation reports stated that the failure was due to inexperience, defective machinery and lack of capital. It was also felt that I nd ia n iron i nd ust ry could succeed on I y by means of th oroug hly modern met hods and in regions in which coal and iron were in proximity.

In 1839, Mjs Jessop and Co. established an experimental iron works near Barakar in the Raniganj coal field area but it was soon closed. I n I X55, another firm Mis Mackay and Co. started the Birbhum Iron Works. 11 produced :2 tons per day of pig iron in 1858 but was closed in 1860 owing to lack of availability of charcoal. M's Burn and Company undertook the operation of the same works in 1875 but soon gave it up. Another attempt was made by the Government to operate an iron works on the Nerbudda River, nearly 200 miles above its mouth on the Gulf of Cambay. In 1864, Captain Keatings who was in-charge of the project was transferred. The Government, although had spent nearly Rs. 7.5 lakhs on the project, decided to close the works.

lNDliSIRIES IN !~DIA DURING 18TH AI\D 19TH CENTURY

223

This marked an end of a long series of attempts, by the Government and by European firms, to introduce blast furnace smelting of iron with charcoal.

Subsequently attempts were made in J R75, to smelt iron by means of coal.

Mr. Nees experimented with coal and ores of the Chanda District in Central Provinces. He was deputed by the Government. However, the great ash cement in the coal proved to be a biggest drawback. In the same year Bengal Iron Company started operations near Asansol but were forced to close down due to insufficient capital and lack of support from the Government. This plant was then taken over by the Government in 1 Rt; 1 and was managed by Mr. Von Schwartz for eight years. it was reported to have produced 30,000 tons of pig iron during 1884-1889. The plant was finally sold out to Bengal Iron & Steel Co. Ltd. This company got sufficient support and aid by the Government. Still, till the end of the century, the Company could not do well. Later on in the beginning of 20lh century, other iron and steel manufacturing concerns came up with up to date equipment and could stabilize.

It may thus, be observed that the efforts were being made 10 establish iron and qed industry in the country despite or a number of failures,

CONCLCSIOI\S

A brief review of t he state and development of industries in India during I tlth-l 9th century reveals that during the second half of the nineteenth century, railways reached out from Calcutta, Bombay and Madras; Coal mines began to be seriously worked in Bengal and Bihar; the first Cotton mill in Bombay and the first Jute mil! ill Bengal were started: serious attempts were made to rnanufact ure of paper through machines. With this was laid 1 he foundation of i ndusttialisation of I ndia,

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