Book I, Chapter 10: Tariffs, Imports, and Exports

CHAPTER X

VARIOUS Acts were passed from time to time between 1833 and 1853 by the Indian Legislature to regulate Trade and Navigation and to fix the Tariff.¹ The duties which were levied in 1852 on some of the principal articles imported into India are shown in the following table:

Appendix 3 of the Commons’ Report of 1852, from which the above figures are compiled, also gives us the value of the imports and exports of Bengal, Madras, and Bombay, for sixteen years from 1834–35 to 1849–50. In the following two tables we have taken a pound sterling as equivalent to 10 rupees.

IMPORTS.

An examination of the figures set forth herein suggests some observations. It will be perceived at once that while the imports and exports of Bengal and Bombay advanced by rapid strides, those of Madras showed a very poor increase. The imports of Bombay and of Bengal increased from two and a half millions to six millions; the imports of Madras increased from £600,000 to a million. Exports from Bombay increased from three to six and a half millions, and from Bengal from four to ten and a half millions, while exports from Madras increased only from a million to a million and a half. These striking differences were not due to any extension of territory in Bengal and Bombay; for there were few important additions to those Provinces between 1834 and 1849. The difference was mainly due to the impoverished condition of Madras under its wretched land system, which we have described in another chapter.

EXPORTS.

Another striking fact which we note in the above figures is the great disproportion between the imports and the exports of British India. The difference was two millions in 1834-35, and increased to over four and a half millions in 1849-50. The figures represent the trade of British India not with Great Britain only but with all countries of the world. But other countries gave a fair return for what they received; Great Britain exacted a tribute from India for which she made no commercial return. And the difference of two to four millions a year between India’s imports and exports represented the annual drain of wealth from India.

In the preceding tables we have exhibited figures showing the trade of India down to 1850. We are able to place before the reader the figures for the last eight years of the Company’s rule, 1851 to 1858, from a more recent source.² The excess of exports continued during the first five years, but imports exceeded during the last three years, two of which were years of the Indian Mutiny.

It is needless to say that the excess of imports over exports was only temporary. By 1864, as we shall see in a future chapter, India’s exports once more exceeded her imports, and the difference increased to an alarming figure with the lapse of years.

Somewhat over one-half the entire trade of India was with Great Britain. Thus between 1841 and 1855, when the total imports of India ranged between ten and seventeen millions, the imports from the United Kingdom alone were between five and ten millions. And in the last three years, 1856 and 1858, when the imports rose to between twenty-five and thirty-one millions, the imports from the United Kingdom ranged between fourteen and eighteen millions. In the export trade of India the share of Great Britain was somewhat less. The total for India between 1841 and 1855 ranged between thirteen and twenty-one millions, and the exports to Great Britain were between five and eight millions; while in the three subsequent years, India’s exports to the United Kingdom rose to ten millions when her total exports were between twenty-three and twenty-eight millions.

Our space forbids us from attempting to show how the import and export of all the different articles of merchandise rose or fell during these years; but a history of some of the principal articles of trade is important, as throwing some light on the industries of the people of India. Cotton twist and yarn, cotton goods, silk goods and woollen goods, machinery and metal manufactures, were among the most important imports of India; and the fluctuations in the consumption of those articles during ten years are shown in the following figures:—

It will be seen from these figures that the import of cotton goods was more than doubled within six years, from 1849 to 1855; and though a further increase was arrested during the years of the Indian Mutiny, the figures went up with a bound to eight millions in 1859.

The increase in the import of machinery and metal manufactures is also remarkable.

The following figures show the fluctuations in the principal exports from India during the same ten years.

The fluctuations of these articles of export are significant. The export of raw cotton rose in ten years from under two millions to over four millions. There was a continuous desire in England to extend and improve the cotton cultivation of India, so that England might rely on her own possession rather than on America for the requirements of her looms and factories. We shall see in a subsequent chapter that the Civil War in America in the early ‘sixties came as a providential help to these endeavours. America sent little cotton during that war; and the export from India rose to near thirty-six millions in 1864, and to a still higher figure in the following year. But the hope vanished when peace was once more established in the United States. American cotton once more replaced Indian cotton in the British factories; and the export from India fell as suddenly as it had risen.

Throughout the century just expired, there was no thought of fostering the weaving industry in India, or of instructing the people to manufacture for themselves by means of the power loom, or of improving their old hand loom. A truly national Government, one working for the good of the nation, would have sought to preserve the old national industry of India by introducing new and improved methods; and the patient, industrious, and skilful artisans of India would undoubtedly have learnt the lesson, and preserved their old industry under new methods.

Referring once more to the table given above, we find that while the export of raw silk remained stationary and that of raw wool showed an increase, Indian silk manufactures, which had provoked so much jealousy among the silk weavers of England, showed a marked decline from 1857 and 1858 from which they never recovered afterwards. On the other hand, the export of food grains showed a steady and alarming increase, and the figure rose in ten years from less than a million to nearly four millions. It was a natural result, when handicrafts and manufactures declined, and India had to pay her annual tribute to England as well as for her imports, that she sent out a continuously increasing share of the food supply of the people. By the end of the century, the export of rice and wheat and other food grains had reached the high figure of twelve millions sterling a year.

The export of Indian sugar already began to show a decline in the last years of the Company’s rule, and dwindled into a very small figure, under £170,000 sterling, by the close of the century. On the other hand the export of jute steadily increased, specially from the time of the Crimean War. The large supply of flax which England had obtained from Russia before was interrupted during the war, and Indian jute thus obtained a start which it has more than maintained since. By the end of the century the export of raw and manufactured jute from India rose almost to ten millions sterling.

The export of indigo was also large; but it is painful to state that acts of lawlessness and coercion stained the records of the industry. Such acts on the part of the European indigo planters of Bengal caused much irritation among the people, and at last brought their own remedy in most parts of Bengal. Cultivators struck; many indigo firms failed; and the manufacture of the indigo declined, as will be explained in a subsequent chapter. And the discovery of a chemical equivalent in Germany towards the close of the century gave the final death-blow to this old industry.

MUTARFA TAX.

Speaking about Indian industries it is satisfactory to note that the oppressive and harassing Mutarfa Tax on trades and professions had been abolished by 1853 all over India, except in the benighted Province of Madras. The Madras Native Association in their Petition to the House of Commons³ described the Mutarfa as a “tax upon trades and occupations, embracing weavers, carpenters, all workers in metals, all salesmen, whether possessing shops which are also taxed separately, or vending by the road side, &c., some paying impost on their tools, others for permission to sell—extending to the most trifling articles of trade and the cheapest tools the mechanic can employ, the cost of which is frequently exceeded six times by the Mutarfa, under which the use of them is permitted.” And the Association went on to state that “it falls more heavily upon the indigent than upon the wealthy, while the discretionary power under which it is collected affords a wide field for the perpetual practice of inquisitorial visits, extortion and oppression, as suits the pleasure or the cupidity of the irresponsible collectors, with whom it is no unusual thing to resort to imprisonment and fetters in order to compel their exactions.” And “the whole sum raised by this impost is but little above £100,000 sterling.”

There was no exaggeration in the above statement. A witness, J. W. B. Dykes, who was a magistrate and revenue officer, and had himself collected the tax in Madras, spoke in stronger terms of its oppressiveness.

Q. The tax is only levied upon those who are engaged in commercial dealings?

A. It is levied upon every one almost who does not cultivate land. . . . If an old woman takes vegetables to market, and sells them at the corner of the street, she is assessed for selling vegetables. If a man is a cloth merchant, he is assessed. But no tax is levied upon European traders. Perhaps, next door to this man who is making a few rupees a year, there is a European trader making hundreds, but he pays nothing.⁴

Such an invidious tax could not be continued in any part of India after the Parliamentary inquiries of 1853; and it was accordingly abolished. And the Income Tax, which was imposed shortly after the administration of India had been assumed by the Crown, was more just and equitable, because it was imposed on all classes of men, and because, eventually, people with poor incomes were excluded from its operation.

Footnotes