Till the middle of eighteenth century Indian handicraft products were greatly demanded in the markets all over the world. Specifically European markets needed constant supply of Indian handicraft-products. The European traders and trading organizations made huge profits by selling Indian products. Indian textile products had no equals and those products were the symbol of craftsmanship and artistry. Indian cotton textiles became a house hold name in England.
But the Industrial Revolution in England and the economic policy of the East India Company jointly closed the markets for Indian handicrafts. In England machines went for large scale productions and those machine products were cheap and colorful. Not only markets but also the British Government as well as manufacturers encouraged the supply of their machine products to European markets.
As a result, the British machine-products entered into unfair competition with Indian products. Handicrafts of India could not sustain the pressure of the competition with cheaper machine goods. Thus, those were driven out of European markets. Further, the British trade policy proved extremely fatal for Indian handicrafts. In 1813, trade monopoly was abolished and one way free trade policy was imposed on India. By this policy the British machine products were imported to India freely and the export of Indian goods to England was discouraged by imposition of heavy duties on those products.
The Industrial Revolution closed foreign markets for Indian goods and British trade policy closed domestic market for Indian products. Once the markets were closed demand for Indian products declined suddenly and production stopped. It resulted in making the artisans and craftsman jobless and handicraft industries were closed down.
Introduction of railways opened a new era for the transport system in India. But the railways served the political and economic interest of the British to a larger extent. Through railways the machine products of Britain found it much easier to enter into the rural India.
In other words, the machine products of England replaced the Indian handcrafts in the village market. As a result the artisans and the craftsman who adopted caste-based occupation were compelled to give upon the same. This ruined the rural artisan industries and the artisans lost their occupations.
Added to this, modernization of India increased fascination for the machine-products which were cheaper, colorful and attractive.
There developed a craze for the goods, ‘Made in England’ and use of those goods was considered status symbol and sign of modernity. As the demand for Indian handicraft products declined within India, production failed suddenly leading to forcible closure of the rural artisan industries.
From the very day, the British won the Battle of Plessey, the Company and its servant’s exploited the craftsmen of Bengal. The British pursued the policy of coercion of terrorist them. The artisans were forced to sell their products below the market price.
The price was determined by the Company and it was not profitable for the craftsmen. The services and the labour of the craftsmen were hired at very low wages. It was impossible for the craftsmen to adopt their traditional profession.
So they were force to abandon those crafts. The worst affected were the weavers of Bengal and textile industry of Bengal was virtually closed. It was said that the thumbs of the weavers were cut off. Actually it meant that thousands of weavers were made jobless due to closure of weaving industry.
As the British Empire expanded rapidly the political set-upon in India changed accordingly.
The Indian rulers lost their states; their courts and courtiers disappeared. The rulers and their courts were the major customers of the handicraft products. Moreover, urban handicrafts could not find the patrons like those rulers to encourage craftsmanship. Very often the artisans pursued the crafts according to the requirements and taste of the rulers. Under the changed situation, they were left in wilderness.
On the other hand, the British Government and its officials used the products made in England and formed the trade policy favorable for easy import of those goods to India. For example the British exported raw materials, like cotton, indigo for the textile industries in Lancashire. As a result, the prices of the raw materials soared high and cost of the handicrafts increased. Therefore, handicrafts products of high cost lost the ground in the Indian market to the cheaper products from Britain.
Under the patronage of Indian rulers, handicrafts flourished at different centers. Around those center developed towns and cities; each of the got associated with excellence of craft. Dacca, Murshidabad, Surat, Agra etc. were few among those flourishing craft centers.
This towns and cities also gained political importance. Repeated wars of conquest of the British had devastating effects on those towns and cities. The conquerors plundered those centers time and again. The artisans deserted those centers for safety and once flourishing crafts were abandoned.
Added to this, there was no attempt for growth of modern industry to take the place of the cottage Industries. As a result, the handicraftsman and artisans had no scope to find suitable employment according to their skill. Rather, they were compelled to switch over to agriculture for employment. Even the peasants who earlier adopted different crafts as secondary occupation to supplement their income, found it impossible to continue with those crafts.
For example, the peasants were part-time weavers earning extra income. As they found the cost of cotton very high, they preferred to be consumers of Lancashire cloth and abandoned weaving cloths for their families. In both the cases over-crowding of agriculture made the peasants and artisans either agricultural laborers or jobless.
Ultimately the people were left amidst extreme poverty. Major cottage industries like textile, leather, oil, pottery, etc. were ruined and no alternative source of production was setup in India. Thus, India had to depend on the British manufacturers. Exporter India was converted into importer India. Self-sufficient village economic gave way to colonial economy and India was transformed into an agricultural colony to produce and supply raw materials.