The Survival Of Handloom Industy

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A device which is used to weave cloth is called loom. A part from being important source of livelihood, handlooms has remained saviors of the various traditional inherited skills of weavers over generations. The level of artistic ability and sophistication achieved in handloom fabrics are unparallel and only one of its kind. The handloom can meet up all needs from exquisite fabrics to everyday use.

Spinning and weaving were the national industries of India down to the commencement of the nineteenth century. The spinning-wheel and the handloom were universally in use; and it is scarcely an exaggeration to state the nearly half the adult female population of India eked out the incomes of their husbands and their fathers by the profits of their own labour. It was an industry peculiarly suited to Indian village life. Each woman brought her cotton from village market, and sold her yarn to the village weaver who supplied merchants and traders with cotton. Vast quantities of piece goods, thus manufactured, were exported by the Arabs, the Dutch, and the Portuguese; and the European nations competed with each other for this lucrative trade with India.

This paper talks about the survival of handloom industry in India, during 19th and early 20th century, by examining the multilayered structural shifts in India’s handloom industry initiated by Raj. Historians of Indian industrialization measured that the rich artisan tradition in the region had suffered a catastrophic distress in the nineteenth century, after imported European manufacturer began to flood Indian market. Taken as a whole in the time period covered in the paper, handicraft producing small firms and industries showed much turmoil and increasing isolation. While many industries lost the market, some of them managed to settle in by reconditioning old silks to apply new goods.

The first section talks about slowdown in handloom industries due to policy followed by British government in Britain for promotion of her domestic industries and in India to meet the requirements of the manufacturers of Lancashire. The second section talks about transport revolution which lowered the prices of machine textile and helped in market penetration. The third section talks about survival of exquisite fabrics and high value added products. This paper also talks about the supply side harms due to the disbanding of Mughal supremacy in 18th century. The later section talks about the experience of famine and Swadeshi moment which forced the British authorities in India to resuscitating handloom industries.

Policy followed by British government

British, who initially entered in India as traders, established East India Company in 1600 AD and tried to acquire monopoly in trade of India. In 1765, East India Company got Diwani (right to collect tax revenue) of Bengal. Having right to collect revenue in Bengal, Company stopped importing of gold and silver. Gold and silver compensated for goods imported by Britain.

The roused demand for cotton textile was curtailed by harsh protectionist measures during period 1700-1846. 125 years long commercial and unfair policy followed by British government is one of the grounds for reversal of pattern of trade in cotton textile between Britain and India in the early 19th century. First attempt was initiated in 1700 to ban Indian printed and painted clothes. This continued till 1846 to do all achievable to retain bullion with them. High tariffs to quantitative restrictions were levied on Indian textile. Only under such a ruthless commercial policy it was possible for them to reverse the pattern of trade by coping manufacture of the textiles.

As textile market is segmented, they had to compel tariffs even after ban imposed in 1700 and 1721. Additional ad valorem duty was also imposed to avoid Indian export to Britain. The tariffs ranged between 27 and 71 per cent in 1813 and were further increased to 37-67% in 1824 and were completely abolished only in 1846. With this prejudice, Britain was not only able to take over the export market of India but also expanded to in domestic market of India.

Tariff rates for import of muslins, calicoes & other cotton clothes manufacturers in Britain [1] 

Year Tariffs (in %)

1813 27-71

1824 37-75

1830 30-10

1846 Abolished

These procedures supported and atmosphere where innovation of textile machinery could take place. The machine made fabrics out-competed handloom fabrics of India. Meanwhile the Indian legislature passed various acts between 1833 and 1853 to regulate Trade and Navigation and to fix the Tariffs. The duties levied on some principal articles imported into India in 1852 are:

Articles Imported Duty

Cotton and silk piece goods, British 5%

Cotton and silk piece goods, Foreign 10%

Cotton thread, twist and yarns, British 3%

Cotton thread, twist and yarns, Foreign 7%

(Source: The Economic History of India Vol. 2, R C Dutt)

In 1859 duties on all articles of luxury were raised to 20 per cent; duties on other articles, including cotton piece good, were raised to 10 per cent and those on cotton twist and yarns to 5 per cent, on account of the heavy financial pressure after the mutiny. The 20 per cent duty on luxuries was reduced to 10 per cent, and the 5 per cent duty on cotton twist and yarns was raised to 10 per cent by Mr. James Wilson’ the first Finance Minister of India, in 1860 so that the import tariff consisted a uniform rate of 10 per cent. [Dutt: 1956] This somehow protected the domestic market of handloom industries.

The tariff on cotton twist and yarn was reduced to 5 per cent in 1861 which was further reduced to 3.5 per cent in later part of 1861. In 1874, a mandate came from England that old genuine proceeds, derived from a moderate import duty, should be forgone to meet the requirements of the manufacturers of Lancashire. When every civilized government on earth is endeavoring to help home manufactures, the Indian government had cruelly repressed the handloom industry.

Rapid development of the cotton textile industry in Britain bust indigenous industry in India. No state assistance was rendered in response of the devastation of indigenous handloom in India. It is important to note that indigenous traditional handloom industry constituted enormous part of industrial sector in India. Jawaharlal Nehru [2] blamed squarely in colonial economic policy, which almost entirely eschew tariff protection and did zero to help nurture Indian industry. 19th century nationalist Dadabhai Naoroji, D D Kosambi and R C Dutt have made similar arguments in their work.

The newly independent Latin American, the United States, Australia, Canada and New Zealand raised their tariffs to enormous height on imported manufacturers which made the matter worse [Williamson : 2005].

Transport Revolution

From about 1810 to 1860, productivity advance resulting from the adoption of the factory system drove down the relative price of textiles world-wide, a trend that was magnified as a world transport revolution lowered the price of European textile imports even further everywhere in the periphery.

By the 1830s India transformed into exporter of raw cotton, opium, indigo, etc like raw materials. There was a gigantic fall in her share in world manufacture production. The share in 1750 was 24.5% which declined to 6.9% in 1830. American civil war (1861-1865) led cotton prices to rouse high. It also led Indian farmers to turn towards cultivation of raw cotton.

New high tariffs in old “open” export bazaar, European factory based productive intensification and unable to shield own markets with tariffs, the Indian handloom industry became less profitable. As if this were not enough, another powerful global event-transport revolution- induced negative price shock [Shah Mohammad and Williamson: 2004]

Railway rates created incentives not only for the geographical reorganization of India’s economic activity but also for the types of production on which it could specialize. That industry was put at a comparative disadvantage was soon recognized. Nationalists complained bitterly about the impact of the structure of rates on infant industries, particularly those not located at the ports. It was not only the structure of rates but their high level that hindered the development of Indian industry. High transport charges increased costs and made competition with foreign industry more difficult.

Survival of handloom producing high value added products

The power driven looms was on an average four to six times faster than the hand-driven loom. Why, in the presence of such a wide productivity gap, did the handloom survive at all?

Technological improvements and organizational changes led cost to decline. Unless traditional industry tailored its manufacturing process to the new know-how at least partially to internalize these cost returns, it could not prolong as a viable system. Such adjustment itself wasn’t an adequate form to guarantee the survival of cottage industry against competition from mass manufactured goods. The former could carry on only when the circumstances existed in the home market which put a premium on feature other than lower prices, as was strikingly visible in the case high quality, luxurious cotton fabrics and silk. For high value added products, labour incentive techniques sustained to be competitive, while they could not position up against mass consumption produce with economies of large scale production.

In the case of textiles which were closely recognized with the socio-cultural ethos of particular regions of populace, pattern of continued existence was visible. But it is important to note that none of these products catered to a high income market.

Roy says, “Craft traditions in India were extremely diverse. They contained intermediate good (for example, cotton yarn and dyes), tools for the peasants (ploughshare or hand implements), consumer goods for the poor (coarse cloth, pottery for daily use, grain milling) and commodities for well-off consumer or the export market (decorated cloth, silk, brassware, carpets, leather goods). The industrial revolution more or less decimated the first three classes. These goods were standardized in quality and could be produced in masses with machines.” [3] Interestingly, the surviving artisans gained from globalization by obtaining access to imported raw materials, distant markets, and useful knowledge. These adaptations, however, didn’t happen everywhere, but remained concentrated in certain towns and cities.

Supply Side Forces

We have already looked in to enhanced British productivity, first in cottage goods and then in factory production, led to declining world textile prices, making handloom production in India increasing unviable. Declining sea freight rates and expansion of railway in India also toughened these forces and served to foster trade and specialization for both Britain and India. As a result, Britain first won India’s export market and in due course took over of its home market as well [Roy: 2002]. Terms of trade improved significantly in India’s commodity export sector compared to textile, which led the former draw workers away from textile. But we have not yet considered the local supply side forces like rising incidence of drought and political fragmentation.

The disbanding of Mughal supremacy in 18th century led to aggregate supply-side harms for Indian handloom manufactures, even though producers in some area benefited from the fresh order. Profound secular corrosion in climate conditions in the century or so following the early 1700s led greatly to slump in agricultural productivity.

Jeffrey G. Williamson believes handloom manufacturing could have been affected through several channels following the dissolution of Mughal hegemony. The first is a decline in overall agricultural yield through an increased rent burden, shifting of settlements due to insecurity, and warfare. Increased of the prices of grain (key non-tradable) and therefore in relative prices of non-tradable to tradable (textiles) was reflection of reduced agricultural yield. Grain being dominant consumption good for workers and grain wages being close to subsistence must have put an upward pressure on the nominal wages in handloom which was being exported [Chaudhary : 1978, pp 299-300]. Downward pressure on profit from both above and below was put by declining textile prices and rising nominal wages.

As a result of increased rent burden productivity must have suffered and there is no reason to believe revenue lumber to turn down when British became rules of the successor’s state. Engagement in territorial disputes by rules of the successor states may also have increased the rent burden reflected by military expenses.

Disturbance in India’s major trade routes and increased insurance and transportation cost was because of political fragmentation and warfare. The scarcity of bullock, medium of long distance transpiration, power resulting from warfare must have increased transpiration costs. Fragmentary evidence that insurance rates must have gone up during 18th century has also been argued by Irfan Habib (2003).

So, we can say that long before Britain flooded the overseas textile bazaar with factory made products, the rise in nominal wages would have slowly eroded the long standing sources of Indian competitiveness in those markets. After 1800, Indian “textile exports could not withstand the competition of English factory-produced cotton in the world market” [Moosvi: 2002]

The problems faced by handloom industry in survival can be explained in two main eons. The first eon which was direct result of poor climate conditions and indirect result of the fall of Mughal hegemony ran till mid 19th century. The weakening of climate conditions raised nominal wages and thus lowered India’s competitiveness with England and other textile producers of world. Further expansion of revenue farming led to increase in the rent burden, warfare increased the prices and regional trade with the sub-continent declined. India’s competitiveness in export market was hut all more by the increase in nominal wages. Also the inter-sector terms of trade moved against Indian handloom production, encouraging a shift to agricultural commodity production like raw cotton, opium, indigo etc.

In the second eon, productivity advancement resulting from industrial revolution drove down the relative price of textiles world-wide. Also the transport revolution in world and expansion of railway in India lowered the prices of European textile imports everywhere.

Comparative advantage factor

According to K N Chaudhary comparative advantage, which has been strengthened by productivity advance on the land or by increasing openness in world economy or both, in agricultural export sector was another possibility of deindustrialization of Indian handloom industry. Increased openness and unambiguous terms of trade improvement are the causes of comparative advantages. In the latter stage this causes lack of competence, little incentive to maximize prospective output and limitation of market of handloom industry. Thus, India lost its manufacturing’s output share to Britain.

Special Case of Central Province of India

The rise of British Power, competition from British imported cloth which was because of spread of British imperialism and railway combined with supply constraints led to decline of handloom products. But this decline didn’t occur simultaneously or affected all weaving castes equally.

British export laced the detailed understanding of Indian tastes in matter of fashion, style and color which would enable to enter the bazaar effectively. The examination of Indian handloom goods was ordered by Secretary of State for India to see which of them could be supplied by British manufacturers and remedy absence. This official, J. Forbes Watson, had samples of all key handloom products that were in the Indian Museum in London collected into 18 large volumes. Apart from knowing fabrics worn in India, it was also crucial to know how the garments was worn, for what purpose, by which sex, why certain provision of ornamentation were adopted.

Watson pointed out that Europe would in all probability by no means be able to make such items as handloom brocades and embroideries cheaper than India. He commented, “This leads us to remark that there are certain fabrics which will probably always be best and most cheaply manufactured by hand.”

British manufacturers met the requisite of Indian bazaar from survey and collection of specimens. At the very time Watson’s exertion became accessible, the price of cotton was brought down by end of American civil war and railway from Bombay Nagpur was completed (February 1867). These events were followed by flood of British imports.

End of nineteenth century

Two decades years later, it is understandable that the handloom industry was facing rigorous competition. The volume of imports was piercingly up and volume of export of country cloth even more stridently down. What is more important to note that average prices of textile were down in both classes, but they were more so for the native products. As if this were not enough, the indigenous products also started to face some competition from Indian machine made clothes by the end of nineteenth century [four power looms were operating in Central Provinces, two of them in Nagpur, one in Hinganghat and one in Jubbulpore]. Then with the arrival of twentieth century, imitation silk cloth in large quantities from Japan entered the Indian bazaar. The imitation silk cloth was cheaper than both Manchester and Indian cloth.

Since better off classes still bought fine clothes with silk borders, the section of industry that specialized in producing these clothes survived, but with diminishing production. Because of cheapness and appearance of English cloth, it supplanted the products of country handloom. The handlooms were again hit hard in famine of 1899.

Edgar Thurston [4] stated that there was a favorable public response to these cheap imitations of Indian material. He also comments that good taste was the least significant amongst the factors in determining demand.

The following two tables talks about average consumption of available yarn by sector from 1906-07 to 1908-9 and from 1916-17 to 1918-19 and sources of cloth supply from 1906-7 to 1908-9 and from 1916-17 to 1918-19. This gives us concrete evidence on fall of handloom industry.

Annual average consumption of available yarn by sector 1906-7 to 1908-9 and 1916-17 to 1918-19 (Million lbs.) [5] 

1906/7-1908/9 1916/17-1918/19

Total available yarn 689 (100%) 685 (100%)

Consumed by Cotton Mills 162 (23.5%) 338 (49.4%)

Handlooms 282 (40.9%) 194 (28.3%)

Export 245 (35.6%) 153 (22.3%)

Sources of cloth supply 1906-7 to 1908-9 and 1916-17 to 1918-19

(Annual averages in million yards) [6] 

1906/7-1908/9 1916/17-1918/19

(%) (%)

Total available cloth 3839 (100) 3418 (100)

Produced by: Indian mill 667 (17.1) 1301 (38.0)

Imports 2154 (55.3) 1397 (40.9)

Handlooms 1072 (27.6) 720 (21.1)

Per capita availability 12.6 yards 9.8 yards

Home handloom output suffered significantly, between the two periods it felled by one-third. This is clear from second table. Handloom sector never fully recovered from this blow. Dharma Kumar in ‘The Cambridge Economic History of India’ says,

“We don’t know how the curtailment of Indian yarns sales affected foreign handlooms, but second table makes it clear that domestic handloom output suffered substantially, falling by one-third between the two periods. This was a blow from which the handicraft sector never fully recovered.”

Finally, when the English imports fell off. That finer market was partly taken over by Japanese mills using American cotton.

Some good news at the end

The incident of famine forced the government to discard its dogmatic loyalty to laissez-faire doctrines of non-intervention policy in the economy and caused the British establishment in India to breathe new life into cottage industries. At the beginning of the twentieth century two factors caused the British authorities in India to consider resuscitating cottage industries such as handloom weaving. One was the experience of the famines which forced the government to abandon its dogmatic adherence to laissez-faire doctrines of non-intervention in the economy. Encouragement was also provided by the ‘Swadeshi’ (home-produced) movement launched by Indian nationalist in 1905.

Low [7] wrote, following the blows wreaked by the cycle famines, handloom industry had undergone something of revival. In the first decade of twentieth century, harvest was generally good. Prices for agricultural produce were in general high and because of famine and plague mortality, there was demand for labour, which was in short supply. Increased spending on public works and railways, sudden extension of the mining industry were undertaken to make good. For all these grounds wages rose, trade flourished, and there was a boost in demand for better sort of handloom goods. 3.5 per cent duty on imported and Indian mill manufactured cloth was imposed in February 1896. Because of this duty, some price advantage was received by handloom industry.

Bread and Butter

The machine made fabrics were cheaper then hand looms fabrics but still complete washout was not possible. The rationale for this was that a number of the fragment could by no means be produced. Other people have also argued that sustained attachment to the coarse cloth by poor and unskilled labor’s wage was much below that of the weavers and fulltime weaver did the weaving job as part time jobs. Land in England was owned by great landlord; the agriculturists were mere farmers and laborers. Where as in India land belonged principally to small cultivators who have their own hereditary rights in their holding. The landlord, were he existed, cannot get rid of those cultivators so long as they paid their rents. Similarly, the various industries in Indian villages were carried on by humble artisans in their own villages and huts. The idea large factories, owned by capitalist and worked by paid hand, were foreign to the Indian mind.

An individual man- in dignity and aptitude, in prudence and sovereignty- is at his best when he labour in his own field or his own loom, rather than when he is paid laborer under big landlord or wage earner in huge factory. And every Indian believes that landlordism cannot replace the small cultivation and that home industries will survive the assault of capitalism (which is true even today in twenty first century).


R C Dutt articulated nearly 100 years ago that Britain had transformed India from an exporter of manufactured goods to an importer of cloth, using political power to keep down a competitor with whom the British manufactured could not have completed on normal terms.

For the craft production in India, the late 19th century can be designated as a period of structural crisis when industrial organization were in direct confrontation, and the survival of handicrafts depended on their ability to compete in terms of cost and price advantages, superiority of the quality or the artistic merits of handicraft products. The crisis point reached only in the last quarter of the 19th century when the discovery of chemical dyes resulted in significant economies of scale, and mass-produced cloth began to compete with indigenous materials in Indian markets. Later on, when power-looms had entirely supplanted hand-looms in Europe, Indian capitalist began to start cotton mills in their own country.

If the pre-industrial (pre-colonial) production system failed to evolve into a modern industrial structure due to colonial policies, it then had the inherent potential to so evolve, and to compete with the technologies and large scale economies of production during transitional stage, before transforming into a modern, capitalist system.

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