Recollections and reflections

Reminiscences, Rafi Ahmad Kidwai

I first came in contact with Subhas Bose in 1923 at Delhi when the Congress was divided into two groups over the question of what was known as 'Council Entry.'...Subhas Babu, as the favourite lieutenant of Deshabandhu, was playing a prominent part in the controversy. more>>

It has been observed that the decline in the percentage share of the United Kingdom in our foreign trade was more in the exports sent thereto than in the imports received therefrom.

An important change, however, took place since the close of the War. While the exports from India retained the pre-War level, the imports from the United Kingdom fell far short of it. During the period 1920-21 to 1925-26, the share of the Britain in our import trade declined from 58.8 per cent to 50.9 per cent, whereas the same in our import trade rose from 19.4 per cent to 21.0 per cent. This is also observable in the trade of the United Kingdom.

Percentage Share of India in U.K.'s Export and Import Trade
    Export    Import
1910    10.69    5.53
1913    13.38    5.48
1922    12.80    4.25
1923    11.24    5.76
1925    11.12    5.76

Previous to 1922, India was gaining in relative importance in Britain's export trade, and losing in her import trade. The subsequent developments were in the opposite direction. The causes of this change in the trend of Indo-British trade will reveal a few important truths regarding the strength of Britain's hold on the Indian market.

During the war period, the import of British goods into India was naturally restricted, and countries like Japan and U.S.A. took full advantage of the situation in pushing the sale of their goods. The result was that when the United Kingdom regained her normal conditions, she found that the market had to a great extent been captured by those two countries whom it was now very difficult to drive away. Japan had come to be a formidable competitor not only in Indian market but elsewhere, as well in the supply of cotton goods which are by far the most important article of our import trade with Britain. Moreover, the raising of the import duty and the abolition of the excise gave an advantage to Indian manufactures which they had never enjoyed before. Thus, in the post-War period, the imports of British cotton goods came to be seriously affected by competition form within the country as well as from Japan. On the other hand, the fact that Germany and Belgium could very soon recover the Indian market in spite of the complete collapse of their trade with India during the War period while the United Kingdom was unable to do so, points to the inability of Britain to compete with those countries in certain classes of commodities. The development of new industries in India also came in the way of the growth of British imports; e.g., the iron and steel industry. It will thus be seen that British imports in the post-War period became subjected to very keen competition from home and abroad.

With exports from India, such was not the case. The stimulus that they had received during the War led to their subsequent growth. Moreover, the policy of Imperial Preference and the preferential duties levied on certain Indian goods in the United Kingdom caused some slight developments in our exports to that country.

Hence it was that in the post-War period the exports sent from India to the United Kingdom showed greater developments than he imports received therefrom, while the reverse had been the case so long.