Source: Textbook
Explain the three types of movements or flows within international economic exchange. Find one example of each type of flow which involved India and Indians, and write a short account of it.
Model Answer
International economic exchange involves three main flows:
- Flow of Trade: Movement of goods between nations. For India, a key 19th-century example was raw cotton exports to Britain. Indian weavers suffered due to British textile imports, but India became a vital raw material source for British mills.
- Flow of Labour: Migration of people for employment. The indentured labour system transported millions of Indians to British colonies like the Caribbean and Fiji from the 19th to early 20th century, working under harsh plantation conditions.
- Flow of Capital: Cross-border investment. British firms invested heavily in Indian infrastructure, like railways and telegraphs. British bankers also provided significant loans to the colonial government, thereby dominating capital flows.