To understand the true tragedy of colonial rule, one must first appreciate the magnificent prosperity that preceded it. For centuries, India was not just another country; it was a global economic powerhouse, a beacon of industry, and a symbol of unimaginable wealth. The world coveted its treasures, and its name was synonymous with luxury and abundance. Before the British East India Company set foot on its shores, India was, in the words of historians, the “sone ki chidiya” — the Golden Bird.
This was not merely a poetic metaphor. India’s wealth was a tangible, quantifiable reality that shaped global trade and finance for millennia. Its economic dominance rested on three formidable pillars: its peerless manufacturing, its astronomical share of global GDP, and its magnetic pull of precious metals.
The Workshop of the World: Mastery in Manufacturing
Long before the Industrial Revolution, India was the undisputed industrial workshop of the world. Its artisans possessed skills and techniques that were unmatched, producing goods that were coveted from the palaces of Europe to the courts of Asia.
- Textiles: The Fabric of Global Trade: Indian cotton was the world’s most sought-after manufactured good for centuries. The subcontinent produced a stunning array of fabrics whose names entered the global lexicon: Muslin from Bengal, so fine and delicate it was dubbed “woven air” and could be pulled through a ring; Calico from Calicut; and Cashmere shawls from the Himalayas. Indian textiles were prized for their breathtaking quality, vibrant dyes (like the legendary indigo), and intricate designs. This wasn’t just a luxury trade; it clothed continents and formed the backbone of a massive global export economy.
- Steel and Metallurgy: The wootz steel produced in southern India, particularly for legendary swords like the Damascus Steel (which actually originated from Indian ingots), was a technological marvel. Ancient and medieval India had pioneered advanced smelting techniques to create high-carbon steel that was both incredibly strong and flexible, with a distinctive watery pattern. This technological edge was another key export.
- Shipbuilding and Other Industries: The shipyards of Bengal and Malabar were renowned for building large, seaworthy vessels that dominated Indian Ocean trade. Other industries like silk production, diamond mining (from Golconda, the source of the Koh-i-Noor and Hope diamonds), pepper, and spices made India a one-stop shop for the world’s most desirable goods.
The Numbers Don’t Lie: A Colossal Share of Global GDP
Modern economic historians have used historical data to reconstruct the size of the global economy, and the figures are staggering. According to the seminal work of economist Angus Maddison, in the year 1700, just as the British East India Company was beginning its ascent, India contributed between 24% to 27% of the entire world’s Gross Domestic Product (GDP).
To put this almost incomprehensible figure into perspective:
- This was a share larger than all of Europe combined at the time.
- It was more than double the entire GDP of Great Britain.
- The Indian economy was the second-largest in the world, only behind China, and the two giants together accounted for nearly half of all global economic activity.
This economic heft was not just a product of its large population; it was a result of incredibly high productivity. India’s agricultural output was robust, feeding its large population while still producing massive surpluses of cash crops like cotton and indigo for export. Its manufacturing sector was the most advanced and diverse on the planet. The combination of a huge domestic market and massive export earnings created a virtuous cycle of wealth generation.
The River of Silver and Gold: The Balance of Trade
The most definitive proof of India’s economic dominance was its insatiable pull on the world’s precious metals. For centuries, the global trade with India was defined by one simple, astonishing fact: the world had very little that India needed to import.
Europe and the West craved Indian textiles, spices, and luxury goods. In return, India had limited interest in Western goods, which were often seen as inferior. This created a massive and perpetual trade surplus for India. How did the world pay for these Indian exports? In silver and gold.
- The Roman Empire was so drained of gold by its trade for Indian pepper and silk that the historian Pliny the Elder lamented the drain of precious metals to India.
- Later, the Spanish Empire, flush with silver from its mines in South America, saw vast quantities of that silver flow directly to India and China to pay for goods.
- The British East India Company itself was funded by vast shipments of bullion to India.
This influx of precious metals did not cause inflation, as classical economics might predict. Instead, it was absorbed into the economy, monetizing it, funding further production, and being converted into the breathtaking hoards of jewellery and treasure that adorned its temples, palaces, and even its common citizens. India wasn’t just producing goods; it was effectively accumulating the world’s hard currency.
A Flourishing Ecosystem of Prosperity
This wealth was not solely confined to a few emperors. While there were stark inequalities, as in all pre-modern societies, the economic prosperity was widespread enough to support a vast network of bankers, merchants, weavers, farmers, and artisans.
- Financial Sophistication: India had a highly advanced banking and credit system, with sophisticated instruments like Hundis (bills of exchange) that allowed for the secure movement of capital across vast distances. Merchant guilds and financiers funded trade expeditions and production.
- Agricultural Bounty: The foundation of this wealth was a productive agricultural system, supported by complex irrigation works and a diverse range of crops, ensuring food security for its large population.
The Inevitable Target and the Great Divergence
This immense concentration of wealth made India an inevitable target. The British East India Company did not arrive in a poor, backward land. It arrived in the richest prize on earth. The subsequent 190 years of Company rule and the British Raj were characterized by the systematic deindustrialization of India.
- Forced Deindustrialization: Indian textiles were crushed by heavy tariffs in Britain and forced export duties in India, while British machine-made cloth was foisted upon the Indian market duty-free, destroying the livelihoods of millions of weavers.
- The Drain of Wealth: The most devastating mechanism was the “drain of wealth,” a systematic transfer of Indian resources to Britain. This was done through exorbitant taxes, which were then used to buy Indian goods for export, not for investment in India. The profits from the sale of these goods and the salaries of British officials were all remitted back to London, bleeding the country dry.
By the time the British left in 1947, the Golden Bird had been plucked bare. India’s share of global GDP had plummeted from over 24% to a paltry 3%. A country that had been for centuries the engine of global manufacturing was reduced to a supplier of raw materials and an importer of finished goods.
The story of pre-British India’s wealth is not an exercise in nostalgia. It is a crucial historical corrective. It reveals that India’s poverty at independence was not an inherent condition but a direct consequence of colonial policy. It underscores the fact that this was not a conquest of a backward people, but the deliberate and systematic dismantling of the world’s most advanced economy, a tragedy whose echoes are still felt today. The legacy of the “sone ki chidiya” is a powerful reminder of what was lost and a testament to the resilient spirit that is now forging a new destiny.