On 7 September 1695, state sponsored English pirates attacked a large Indian trading ship, the Ganj-i-Sawai, carrying 900 passengers and crew from Yemen to Surat. After murdering a large number of the men and raping the womenfolk over several days, the pirates took off with gold, silver and precious stones with an estimated value of £200,000 to £600,000 ($400 million in modern times). For perspective, the average annual salary in England in 1688 was around £32.

That was the wealth from just one ship in a single day. During the approximately thirteen thousand days of British rule in India, vessels sailed daily for Britain from ports all along India’s coasts. They were laden with incalculable quantities of wealth and other valuables such as icons, statues, scrolls and books looted from the treasuries of Indian kings, businessmen, temples, landlords, schools, colleges, charitable institutions and the common people.

The Teutonic thoroughness of the loot can be assessed from the British sacking of Jhansi in 1858. D.V. Tahmankar writes in his book The Ranee of Jhansi that on the first day the British led by Dalhousie carted away the more valuable property, jewellery, gold, silver and money. By the end of the fourth day, they had taken all the rich clothes, beds, mattresses, sheets, blankets, carpets, hinges and bolts on doors and windows, pots and pans, cereals and lentils, farm animals, chairs, charpoys (string beds), bedsteads and even water wheels and ropes with which the people drew water from the wells. “Not a single useful thing was left with the people.”

Dalhousie was following the lofty precedent set a hundred years earlier by Governor Generals Robert Clive and Warren Hastings. Clive had taken £250,000 as well as a jagir worth £27,000 when he returned home to England. That bounty apparently wasn’t enough and he proceeded to steal a million pounds more by shaking down the prostrate Indian kingdoms, businessmen and the peasantry. At his trial Clive said that considering the quantum of wealth he had seen in India, he was astounded at his own moderation at not taking more.

But the loot of gold and silver is hardly enough to destroy an economy. For, in the previous seven centuries, Islamic invaders from Arabia, Turkey, Central Asia, Afghanistan and Persia had raided India countless times and yet India remained wealthy. For instance, what Persian Nadir Shah looted in his 1739 invasion of India was greater than the cash appropriated by Clive and his successors in the two decades after 1757.



Even during the reign of the most avaricious and cruel Muslim tyrants, such as the Tughlaqs, Khaljis, Lodhis and Aurangzeb, the people of India’s villages continued in their age old ways of economic production. This is because the Islamic invaders did not tamper with the village economy. It took Britain’s colonial wrecking machine to bring down India.

The British caused irreparable losses to India in a number of sectors. Like a huge sponge Britain soaked up the country’s wealth and simultaneously ruined its industry, agriculture and education. And as a parting shot, they divided the country, thereby ensuring that India would never again be the dominant economic power it once was.

Economic Loss

In 1993 Belgian economist Paul Bairoch presented a detailed study of the world economy. In Economics and World History: Myths and Paradoxes he said that in the year 1750 China’s share of global GDP was 33 percent, India’s 24.5 percent, and the combined share of Britain and the US was two percent. In order to investigate Bairoch’s claims, the OECD constituted the Development Institute Studies under professor Angus Maddison of the University of Groningen. The data Maddison compiled showed India had the largest economy on the planet for 1700 of the past 2000 years.

From 1 CE to 1000 CE, India had a 32 percent share of global GDP. During the second millennium, Islamic invasions disrupted economic activity, and India yielded the top spot to China. Still, India’s share remained at 28-24 percent between 1000 CE and 1700 CE. By 1947, when India became free, the country’s GDP comprised around three percent of the global economy. Here’s how it happened.

First, let’s look at the steel sector, the backbone of any economy, in which India had been a world leader for millennia. India in the eighteenth century had literally thousands of steel mills. The world’s best steel i.e. wootz originated over 2500 years ago in Tamil Nadu where it was known as ukku. The Arabs introduced ukku steel to Damascus, where an entire industry developed for making the legendary Damascus sword. The twelfth century Arab traveller Edrisi mentions the Hinduwani or Indian steel as the best in the world. However, the British banned the production of ukku in 1866 and the process was lost.

Historian Romesh Chandra Dutt explains: