50 Years of Indo-British Trade

One of the most remarkable facts in connection with the growth of the foreign trade of India is that the percentage share of the United Kingdom has almost continuously been on the decline for the last fifty years or more, though the actual amount of Indo-British trade has shown very great development. This means that the progress of Indo-British trade has not kept pace with that of our total trade; in other words, trade with non-British countries has grown at a faster rate than that with Great Britain. Till the middle of the 19th century, the growth of our foreign commerce was practically synonymous with the development in our trade with the United Kingdom.

It lies beyond the scope of the present article to trace the beginnings of our commerce with Great Britain which led to her occupying the almost monopolistic position in India's foreign trade.  The subsequent developments have been in the direction of a gradual divergence of both our imports and exports from the United Kingdom to other countries, especially the Continental countries of Europe, and to U.S.A. and Japan with the result as noted above. The following figures are illustrative of the fact:

Percentage Share of U.K. in the Total Trade of India
1875-76        62.2
1880-81        58.7
1890-91        50.9
1900-91        45.1
1905-06        42.9
1910-11        39.1
1915-16        47.4
1920-21        41.8
1925-26        32.1

This decline in the percentage share of the United Kingdom has been more marked in our export trade. It is true that the share of Great Britain has always been larger in our imports than in our exports; but smaller as the volume of exports has been, its decline has still been relatively more marked than that of imports, as the following figures will reveal:

Percentage Share of U.K. in India's Import and Export Trade
    Import    Export
1875-76    83.0    48.3
1880-81    82.8    41.6
1890-91    76.4    32.7
1900-01    65.6    30.7
1905-06    68.5    25.1
1910-11    62.1    24.8
1915-16    60.4    38.1
1920-21    58.8    19.4
1925-26    50.9    21.0

In our imports, Great Britain continued to retain more than half the total trade and occupied by far the most important position, the share of the country coming next after her, namely, Japan, being only 8 per cent in 1925-26. But as a consumer of Indian goods, she had long ceased to hold a similar position. Japan and the U.S.A. followed her at close quarters, the percentage shares of U.K., Japan and the U.S.A. in India's export trade being respectively 21.0, 15.0 and 10.4 in the year 1925-26.