Why were Indian merchants unable to maintain their dominant position in international textile markets by the mid-eighteenth century?
Generated by claude-sonnet-4-6 · 2026-06-26 14:58 · grounding rag
Model Answer
By the mid-eighteenth century, Indian merchants lost their dominant position in international textile markets due to the following reasons:
- EIC Monopoly: After establishing political power in Bengal and Carnatic in the 1760s–70s, the East India Company asserted a monopoly over trade, eliminating competition from French, Dutch, Portuguese, and local traders.
- Tariff Barriers: Britain imposed import duties on Indian cotton textiles, reducing the inflow of fine Indian cloth into Europe. India's share of cotton textile exports fell from ~30% around 1800 to below 3% by the 1870s.
- Competition from British manufactures: British cotton industries expanded rapidly, and cheap machine-made Manchester goods flooded both international and Indian markets, making it impossible for Indian merchants to compete on price.
Source: Chapter 3, Section 2.6; Chapter 4, Sections 3.2 and 3.3
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Explanation
- The question asks specifically about merchants in international markets, so focus on tariff barriers, EIC monopoly, and British industrialisation — all three are needed for 3 marks.
- Examiners expect one point per mark; three distinct, labelled points work best.
- Avoid writing about weavers' internal problems (gomasthas, loans) — the question is about the merchants' international position.
- Key stat to remember: cotton textile exports dropped from 30% (1800) → 15% (1815) → below 3% (1870s).