Solution

India was a country with ample resources during the colonial period. Various products were produced in India like sugar, silk, jute etc. The British government’s restrictive policies on foreign trade, the export of products resulted in affecting the structure, composition and the foreign trade volume of India. The state of foreign trade during independence was as follows:

1. India became a market for exporting primary products such as sugar, raw silk, indigo, jute etc. India also started importing finished goods like cotton, silk and woollen clothes along with machinery produced in Britain. Britain served as the major market for imports for India with food grains being the most imported item.

2. Britain established a monopoly on foreign trade when the Suez Canal was opened in 1869. It helped in establishing a direct connection between India and Britain. This reduced the time necessary for transportation and so the result was more exploitation of the Indian market. All of India’s trade was maintained by the British with more than half being traded to Britain and the remaining to China, Persia and Ceylon.