The impact of British rule on the Indian economy was multifaceted. In the early stages, the British East India Company expanded agricultural production, creating large plantations. Early crops were opium to export to China (see “The Opium War”) and tea to substitute for imports from China. India gradually replaced China as the leading exporter of tea to Europe. Clearing land for tea and coffee plantations, along with massive commercial logging operations, led to extensive deforestation.

To aid the transport of goods, people, and information, the colonial administration invested heavily in India’s infrastructure. By 1855 India’s major cities had all been linked by telegraph and railroads, and postal service was being extended to local villages. Irrigation also received attention, and by 1900 India had the world’s most extensive irrigation system.

At the same time, Indian production of textiles suffered a huge blow. Britain imported India’s raw cotton but exported machine-spun yarn and machine-woven cloth, displacing millions of Indian hand-spinners and hand-weavers. By 1900 India was buying 40 percent of Britain’s cotton exports. Not until 1900 were small steps taken toward industrializing India.

Although the economy expanded, the poor did not see much improvement in their standard of living. Tenant farming and landlessness increased with the growth in plantation agriculture. Increases in production were eaten up by increases in population. There was also a negative side to improved transportation. As Indians traveled more widely on the convenient trains, disease spread, especially cholera, which is transmitted by exposure to contaminated water.