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Colonialism and the Emergence of New Markets

The advent of colonialism in India produced major upheavals in the economy casuing disruptions in production,trade and agriculture.The demise of the handloom industry is one clear example due to the flooding of the market with cheap manufactured textiles from England.In the colonial era India began to be more fully linked to the world capitalist economy.Before being colonised by British India was a major supplier of manufactured goods to the world market.After colonization she became a source of raw materials and agricultural products and consumer of manufactured goods both largely for the benefit of industrialising England.

At the same time new groups entered the trade and buisness sometimes in alliance with existing merchant communities and in some cases by forcing them out.The expansion of the market economy in India provided new opportunities to some merchant communities where were able to improve their position by re-orienting themselves to changing economic circumstances.

In some cases new communities emerged to take advantage of the economic opportunities provided by colonialism and continued to hold economic power even after independence.

Marwaris became a successful buisness community only during the colonial period when they took advantage of new opportunities in colonial cities such as Calcutta and settled throughout the country to carry out trade and moneylending.In the late colonial period and after independence some Marwari families transformed themselves into modern industrialists and even today Marwaris control more of India's industry than any other community.The emergence of this new buisness community under colonialism and its transformation from small migrant traders to merchant bankers to industrialists,illustrates the importance of the social context to economic processes.