ABSTRACT
In the aftermath of the great mutiny-rebellion of 1857 the Britishcrown decided to put an end to the company’s by now well-advertised mismanagement of Indian affairs and extended its direct sway over the conquered territories. It is in the period from 1858 to 1914 that Britain is generally seen to have been able to extract solid strategic and economic advantages from its prize colonial possession. India was being fashioned into a colony not only to play a critical role in the international system of payments of the capitalist world economy for the sustenance of its hegemonic core, but was also indispensable in the strategic defence of that hegemony. The strategic imperative of using Indian troops for the defence of Britain’s worldwide empire was achieved by amending the structure and composition of the army that had erupted in such serious revolt in 1857. India’s economy was twisted to fit a classical colonial pattern of importing manufactured goods from the metropolis and exporting a variety of agricultural raw materials. Britain enjoyed a trade surplus with India. But it had a growing deficit in its overall international trade which was offset in this period by India’s substantial export surplus with the rest of the world.
