The most important feature of India’s foreign trade throughout the colonial period was generation of large export surplus. But this caused scarcity in the domestic market. Further, this export surplus did not result in any ow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by,
- expenses on war
- office setup of British government and
- Import of invisible items.
All these led to drain of Indian wealth during the colonial period.
