India At The Turn Of The 19th Century Case Study

At the turn of the century, the dynamism in the global trade patterns meant the replacement and transformation of the earlier regional trade patterns. The avant-garde players, especially the newly industrialised United States and the almost phoenix rising of the European nations, in particular Germany, threatened to undermine the premier position that Britain held during the entire nineteenth century as a creditor nation.
Looking at the spiralling current account deficit with the United States, Britain found a sharp riposte in the Indian empire, which alone would finance two-fifths of Britain’s total trade deficit . Keeping remittances aside, invisibles were used in a large part to finance this deficit. India thus served as a safe house for Britain. While serving as a readymade market for British manufactured products, it shipped raw materials and other exportables to diverse countries, predominantly to the US, thereby bringing about a favourable balance of trade for Britain. The snowballing significance of Indian jute products ecumenically proves India’s worth in the eyes of the British state.
This had a direct impact on the demand for jute bags and gunny sacks which were used to export plantation products such as sugar and coffee. The export of Indian wheat to the neighbouring regions of the Indian subcontinent, Burmese rice to continental Europe and the burgeoning demand for both raw and manufactured cotton textiles meant more number of bags and sacks for the propagation of such export trade. This rapid rise of international trade metamorphosed the perception of jute as the “world’s carrier”. Jute came to be known as “gold on silt” and the noteworthiness of jute as a packaging material for trade and industry remained unprecedented until the mid-twentieth century