Before the advent of colonialism in India, the country was the center of industrial activities in the world. India’s rural economy thrived and agriculture and handicrafts supplemented each other.
The British gradually annexed the princely states one after another. The courts in India employed a large variety of people including painters, craftsmen, poets, folk artists, priests, etc. when the Indian kings lost their authority and power these professionals were deprived of their patrons and hence rendered jobless. On their part, the British government made no serious effort.
The British government saw India primarily as the supplier of cheap raw materials and market for the finished goods coming from London. Therefore they systematically destroyed the rural economy by adopting policies that discouraged the local artisans and favored big industrialists who entered into contracts with the East India Company. England pursued a biased policy to de-industrialize India. While Indian goods were subjected to high tariffs in the European market, British goods gained duty-free access to the Indian markets.
The traditional weekly haat-based barter system declined and traditional artisans found it difficult to get buyers for their produce. Deprived of their traditional occupations the artisans fell back to the land for livelihood which tremendously increased both dependency and pressure on the land. Also, farmers were forced to grow what suited the British demands. Eg. In Bihar and Bengal farmers were forced to grow indigo on a large scale.
The people were left in the vicious cycle of extreme poverty. Major cottage industries like textile, leather, oil, pottery, etc. were ruined and no alternative source of production was set up in India. The outcome of destroying the traditional artisanal industry was that the once self-sufficient village economy got transformed into an agricultural colony which was supposed to fuel the growth of the British economy for the next few centuries.