Industrial Policy of India: Prior to independence, India was never an industrialized country. It was an agrarian society in which handicrafts achieved an unequaled level of dominance. India, blessed with a plethora of natural resources, had developed a reputation for excellence in handicrafts.
There are very few economic activities that have become conventional in nature and may be classified as items created under the factory system of the nineteenth and twentieth centuries. Industrial activities include the manufacture of silk, utensils, woodwork, and certain pharmaceutical items. The fact that manufactured handicrafts and textile products were traded outside the country demonstrates that India engaged in the production of certain products such as textiles.
British Government set up Industrial Policy in India
Throughout the colonial period, the British government set industrial and economic policies in favor of British interests. British authorities in India adopted a tariff policy based on the premise of one-way free commerce while ignoring the Indian desire for industrialization.
England was the world’s largest exporter of produced goods and raw materials. In exchange, England imported foodstuffs and raw materials primarily for the benefit of its colonies. Interestingly, imports were duty-free, but exports were not. This one-sided free trade in raw materials, semi-finished goods, and produced goods was the established norm, which was industry-oriented to a degree, but industrialization could not occur in India. It occurred in England.
It has long been accepted that the British rulers in India pursued industrial policies that were detrimental to the Indian industrial base but beneficial to England. Though the British Government formed the Department of Commerce and Industry in 1905, the department’s actions prioritized industrial activity in the United Kingdom. This department was to carry out the industrial strategy and also operate as an observer of province governments’ industrial performance. As a result, the provincial governments around the country utilized this department to conduct industrial activities.
Following that, in 1940, the then-governing government established the Board of Scientific and Industrial Research, although little came of it. India desired independence and pursued industrialization as a policy. This is clear from the fact that leading Indian businesspeople drafted the Bombay Plan in 1944, emphasizing the critical nature of the country’s industrialization. With the Bombay plan, India’s prominent industrialists allied with Jawaharlal Nehru and his preference for planning, with an emphasis on large-scale industries in order to maintain comprehensive control over the private sector.
In 1945, the government announced an industrial program, but it was never implemented. The industrial policy drafted in 1945 was also known as the Industrial Policy of 1946, however, because of its haste, it was unable to satisfy the newly independent country’s authorities. This was most likely the compelling argument for developing a well-thought-out industrial policy that could at the very least provide direction for the country’s industrial sector during the early years of independent India. As a result, the Government of India drafted the Industrial Policy of 1948 on 6th April. All of the British Government’s modest attempts to boost business in the country took a back seat as planners sought a new industrial revolution.