4. The Age of Industrialisation

1. Before the Industrial Revolution

• Proto-industrialisation: The phase of large-scale industrial production for an international market that was not based on factories.

• The Countryside and Merchants:

  • Merchants from towns moved to the countryside because urban guilds (powerful associations of producers) restricted new entries in cities.

  • Peasants and artisans in villages agreed to work for merchants to supplement their shrinking income from small plots of land.

• The System: A merchant would manage hundreds of weavers, with each worker performing a specific task (spinning, weaving, or dying).

• [!] London in fact came to be known as a Finishing centre.

2. The Coming Up of the Factory

• Early Symbols: Cotton was the first symbol of the new era. In the 1730s, the first factories appeared in England.

  • Britain was importing 2.5 million pounds of raw cotton in 1760
  • This increased to 22 million pounds by 1787.

• Richard Arkwright: He created the Cotton Mill, which allowed all production processes to be centralized under one roof and management, like supervision of production process, a watch over quality and regulation of labour, which would be difficult in the country side.

  • The series of invention increased the efficacy and enhanced the output of each worker and increased the production.
  • From 1840s, the demand for iron and steel increased rapidly, with expansion of railways in England
  • 1873, Britain was exporting iron and steel worth £77 million.

• Pace of Change: Cotton and metals (iron/steel) were the dynamic industries.

  • New industries could not replace traditional industries.
  • Less than 20% of the total workforce was employed.
  • Technological changes were slow because the machines were expensive to buy and maintain.
    • At the beginning of 19th century, there were no more than 321 steam engines all over England, which was produced by Newcomen, and improved by James Watt and manufactured by Mathew Boulton.
  • Large portion of the output was produced outside factories, within domestic units.
  • Ordinary and small innovations were the basis of growth in non mechanised sectors like food processing, building, pottery, glass work, tanning, furniture making, production of implements.

3. Hand Labour and Steam Power

• Preference for Hand Labour: In Victorian Britain, there was no shortage of human labor, so wages were low. Industrialists saw no reason to invest in expensive machines.

• Seasonal Industries: Industries like gas works and breweries preferred manual labor because demand fluctuated by season.

• The Elite's Choice: The upper classes preferred handmade goods as symbols of refinement and class; machine-made goods were primarily for export to the colonies.

4. Industrialisation in the Colonies (India)

1. The Pre-Colonial Era: Global Dominance

Before the advent of machine-based industries, India was the undisputed leader in the international textile market.

• Superior Quality: Indian silk and fine cotton goods were in high demand across the globe due to their exceptional quality.

• Trade Networks: A sophisticated network of export trade existed, involving:

  • Inland Merchants: They moved goods from the weaving villages to the port towns.

  • Brokers: They negotiated prices with the weavers and supplied goods to the export merchants.

• Port Cities: Major pre-colonial ports like Surat (connecting India to the Gulf and Red Sea ports) and Masulipatam (connecting to Southeast Asian ports) were the hubs of this vibrant trade.

2. Impact of the East India Company

Once the British East India Company established political power, they sought to eliminate competition and ensure a regular supply of cotton and silk.

• Establishment of Monopoly: The Company bypassed existing traders and brokers to establish direct control over the weavers.

• The Appointment of Gomasthas:

  • Gomasthas were paid servants appointed by the Company to supervise weavers, inspect the quality of cloth, and collect supplies.

  • They acted as intermediaries who often had no social link to the villages and behaved arrogantly, sometimes even punishing weavers for delays.

• The System of Advances:

  • To prevent weavers from selling to other buyers, the Company provided loans (advances) for purchasing raw materials.

  • The Debt Trap: Once a weaver took an advance, they were obligated to deliver their produce exclusively to the Company. As demand grew, weavers spent all their time on production, losing their bargaining power and the ability to cultivate their small plots of land.

3. The Decline: "Manchester Comes to India"

By the mid-19th century, the Indian textile industry faced a dual crisis that led to its collapse.

The Two-Way Squeeze

1. Collapse of Export Markets: As cotton industries developed in England, industrial groups pressured the British government to impose import duties on Indian textiles so Manchester-made goods could sell in Britain without competition.

2. Glutting the Local Market: At the same time, the Company persuaded the British government to allow Manchester goods into the Indian market duty-free.

• The Machine-Made Advantage: By the 1850s, Indian markets were flooded with machine-made cotton pieces from Britain. These goods were produced on a large scale and were much cheaper than the intricate, labor-intensive Indian hand-woven products.

• Raw Cotton Crisis: When the American Civil War broke out, Britain turned to India for raw cotton. This drove up the price of raw cotton in India, making it impossible for local weavers to afford the materials they needed to work.

5. Factories Come Up in India

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The transition from manual production to a factory-based system in India was a significant shift driven by Indian entrepreneurs, despite the constraints of colonial rule.

1. The Early Milestones

The mid-19th century marked the birth of the factory system in different regions of India:

• Cotton Mills: The first cotton mill in India was established in Bombay in 1854. By 1862, four mills were in operation with 94,000 spindles and 2,150 looms.

• Jute Mills: Around the same time, jute mills appeared in Bengal; the first was set up in 1855.

• Other Regions: The Elgin Mill started in Kanpur in the 1860s, and a year later, the first cotton mill of Ahmedabad was established. By 1874, the first spinning and weaving mill of Madras began production.

2. The Early Entrepreneurs

Many Indian business groups that established these factories had a background in trade, particularly with China.

• Sources of Capital: Wealth was often accumulated through the export of opium to China and the import of tea to Britain.

• Key Figures: - Dwarkanath Tagore: In Bengal, he set up six joint-stock companies in the 1830s and 1840s.

  • J.N. Tata: In Bombay, Parsis like Dinshaw Petit and Jamsetji Nusserwanji Tata built massive industrial empires.

  • Seth Hukumchand: A Marwari businessman who set up the first Indian jute mill in Calcutta in 1917.

3. The Industrial Workforce

As factories expanded, the demand for labor grew. This led to significant internal migration.

• Source of Labor: Most workers came from the surrounding districts. For example, the cotton mills of Bombay drew many workers from the nearby district of Ratnagiri.

• Migration Patterns: Peasants and artisans who could no longer find work in their villages moved to industrial centers in search of jobs.

• The Role of the Jobber: - Getting a job was difficult, as numbers of seekers always exceeded available work.

  • Industrialists employed a Jobber—usually a trusted, old employee—to recruit new workers.

  • The Jobber brought people from his village, ensured them jobs, and helped them settle in the city.

  • Over time, Jobbers became powerful figures, often demanding money or gifts for their favors.

4. Constraints Under Colonial Rule

While Indian entrepreneurs were successful, they faced severe limitations imposed by the British:

• Market Restrictions: They were barred from trading with Europe in manufactured goods and had to export mostly raw materials and food grains like cotton, opium, wheat, and indigo.

• Shipping Control: The British tightly controlled the shipping and banking networks, making it difficult for Indian merchants to compete on an even playing field.

6. The Peculiarities of Industrial Growth

Highlights how the industrial pattern in India differed from the standard Western model due to its colonial status and the impact of the First World War.

1. Early Patterns of Industrial Investment

The initial phase of industrialization in India was shaped by British interests and the specific choices of Indian entrepreneurs.

• British Agency Influence: European Managing Agencies, which dominated industrial production, were interested in specific products for export rather than for sale in the local Indian market.

• Key Export Industries: Early investments focused on tea and coffee plantations, mining, and jute.

• Avoidance of Competition: When Indian businessmen set up industries in the late 19th century, they avoided competing with Manchester goods in the Indian market.

  • Since British imports dominated the fine cloth market, early Indian cotton mills produced coarse cotton yarn (thread) rather than finished fabric.

  • This yarn was either used by handloom weavers in India or exported to China.

2. The Shift in the 20th Century

Two major factors changed the direction of Indian industrial growth before and during the war years.

• The Swadeshi Movement: During the nationalist mobilization, people were encouraged to boycott foreign cloth.

  • This led Indian industrialists to shift from yarn production to cloth production as the demand for home-produced textiles increased.

• Decline of Chinese Exports: The export of Indian yarn to China declined as Chinese and Japanese mills began flooding the Chinese market.

3. The Impact of World War I (A Turning Point)

The First World War created a completely new situation for Indian industries.

• Crisis in Britain: British mills were busy with war production to meet the needs of the army.

• The Boom in India: * Manchester imports into India suddenly declined, leaving a massive "home market" for Indian factories to fill.

  • As the war prolonged, Indian factories were called upon to supply war needs: jute bags, cloth for army uniforms, tents, leather boots, and horse saddles.

• Expansion: New factories were set up, and existing ones ran multiple shifts. Many new workers were employed, leading to a period of rapid industrial growth.

4. Post-War Consequences

After the war, the industrial landscape changed permanently.

• British Decline: Britain could never recapture its old position in the Indian market. Unable to modernize and compete with the US, Germany, and Japan, the British economy crumbled.

• Consolidation in India: Within the colonies, local industrialists consolidated their position, substituting foreign manufactures and capturing the home market.

5. The Persistence of Small-Scale Industry

Despite the growth of large factories, they did not dominate the Indian economy.

• Small-Scale Dominance: Large-scale industries formed only a small segment of the economy.

• Workforce Distribution: Most of the industrial workforce (about 67% in 1911) remained in small workshops and household units.

• Survival of Handlooms: Handloom cloth production actually expanded in the 20th century. This was partly due to technological changes, like the introduction of the Fly Shuttle, which allowed weavers to increase productivity and compete with mill produce.

7. Market for Goods

1. Creating a Consumer Culture

To ensure a steady demand for their products, both British and Indian manufacturers used sophisticated methods to persuade people to buy.

• The Role of Advertisements: Advertisements made products appear necessary and desirable to the public.

• Shaping Minds: They played a vital role in expanding markets and shaping a new consumer culture by influencing how people perceived products.

2. Strategies of Persuasion

Manufacturers used several visual tools to build trust and familiarity with their brands.

Labels and Branding

• The "Made in Manchester" Label: When Manchester industrialists began selling cloth in India, they placed prominent labels on the bundles.

• Sign of Quality: The label served as a mark of quality and a guarantee of origin, making the buyer feel confident in the product.

• Visual Appeal: These labels were often beautifully illustrated with images of gods and goddesses to make the foreign products appear familiar to Indian buyers.

Calendars and Popular Imagery

• Reaching the Masses: Unlike newspapers or magazines, calendars could be used even by people who could not read.

• Constant Reminder: These calendars were hung in tea shops, offices, and the homes of the poor, acting as a year-round advertisement for the brand.

• Divine Associations: Images of gods like Krishna or Saraswati were used to give the product a "divine" approval, suggesting that the manufacture was blessed.

Nationalist Appeal

• Nationalist Message: As the freedom movement grew, Indian manufacturers used advertisements to send a political message.

• Patriotic Duty: Buying Indian-made goods was portrayed as a way to show national pride.

• Message to Citizens: Advertisements often stated that if you cared for your nation, you must buy products that Indians produced.

3. Summary of Marketing Tools