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Indicate the volume and direction of trade at the time of independence.

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During the colonial rule, the British followed a discriminatory tariff policy under which they imposed heavy tariffs (export duties) on India's export of handicraft products, while allowing free export of India's raw material to Britain and free import of British products to India. This made Indian exports costlier and its international demand fell drastically. India's export basket during the colonial rule comprised mainly of primary products like sugar, jute, silk, etc. and the imports comprised of finished consumer goods like cotton, woolen clothes, etc. from Britain. As the monopoly power of India's export and import rested with Britain, so, more than half of India's trade was restricted to Britain and the remaining imports were directed towards China, Persia, and Sri Lanka. The opening up of Suez Canal further intensified the monopoly power of the British over India's foreign trade. It led to the fast movement of goods from India to Britain and vice-versa. The surplus generated from India's foreign trade was not invested in Indian economy; rather it was used for administrative and war purposes. This led to the drain of Indian wealth to Britain.

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