What are the benefits did the British get by having a trade surplus with India?
Asked By Daniel White
During the 19th century, British manufactures flooded the Indian market. Food grain and raw material exports from India to Britain and the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. Thus, Britain had a trade surplus with India.
Britain used this surplus to balance its trade deficits with other countries that is, with countries from which Britain was importing more than it was selling to. By helping Britain balance its deficits, India played a crucial role in the late-19th century world economy.
Britain's trade surplus in India also helped pay the so-called 'home charges' that included private remittances home by British officials and traders, interest payments on India's external debt and pensions of British officials in India.