Railways, Cotton and the Drain: The Economy of the Raj

The economic effects of British rule in India remain fiercely debated. Britain built one of the world's largest railway networks, starting with a line from Bombay to Thane in 1853 and reaching roughly 40,000 kilometers by 1900, along with telegraphs, irrigation canals and ports. Supporters of empire pointed to these as gifts of modernization. Critics answered that railways were designed mainly to move troops and carry raw cotton and grain to ports for export, and that Indian taxpayers bore the cost and guaranteed profits to British investors.

India's handloom textile industry, once a world leader, declined sharply in the face of cheap factory cloth from Lancashire, a process historians call deindustrialization, though its extent is debated. The Indian economist Dadabhai Naoroji argued in his drain theory, set out in Poverty and Un-British Rule in India in 1901, that Britain was draining India's wealth through salaries, pensions and payments sent to London.