Correct Option
The correct option is 2 and 3 only.
Explanation
The economic relationship between Britain and India during the Raj was colonial in nature, characterized by the Drain of Wealth theory. The primary objective was to subordinate the Indian economy to the needs of the British economy, ensuring India served as a supplier of raw materials, a market for finished goods, and a source of revenue and manpower for imperial maintenance.
Statement-wise Analysis
- Statement 1 is Incorrect. Britain’s goal was not to develop India as a competitor in the global textile market. On the contrary, British policies led to the de-industrialization of India’s traditional textile industry. Tariffs and policies were manipulated to favor British manufactured cloth (from Lancashire) while reducing India to a mere exporter of raw cotton and an importer of finished textiles.
- Statement 2 is Correct. A significant portion of India’s revenue was used to service debt payments to Britain. This included interest on loans for railways (guaranteed profit system), war debts incurred by Britain but charged to India, and pensions for British officials. These payments constituted a major part of the "Home Charges," leading to a unilateral transfer of wealth from India to Britain.
- Statement 3 is Correct. The British Indian Army was used as a strategic reserve of manpower to secure and expand British imperial interests across Asia and Africa. India provided the soldiers (manpower) and often bore the financial burden for these imperial expeditions, which were not directly related to India's internal defense.
Key Takeaway
British economic policy in India was extractive, focusing on de-industrialization to prevent competition, the extraction of surplus through Home Charges (debt servicing), and the utilization of Indian manpower for imperial defense.