2 - Railways

Summary

From its beginnings in 1853, India's railway system expanded rapidly to become, by 1910, the fourth-largest in the world. This network, which covered most of the sub-continent, radically altered India's transportation system. Vastly increasing the speed and availability of transport, it also lowered costs substantially, thereby permitting new opportunities for profit. Regional specialization began to occur and trade expanded. From a country of many segmented markets, separated from each other by the high costs of transport, India became a nation with its local centres linked by rail to each other and to the world. Railways, by establishing these links, had an impact throughout the Indian economy. Prior to the introduction of railways, transportation, except in the Indus and Ganges valleys and in the coastal regions, was costly, undependable, and difficult. Few roads existed, and many of these had fallen into disrepair. Nor were there many navigation canals. In many regions commodities in bulk could be moved only by pack-bullocks. Costs per ton mile were prohibitive for all goods except those which had a high value relative to their weight. Most internal transport was slow, and rates of spoilage were high. These conditions severely limited the size of markets to small regions which tended to be self-sufficient for most basic items. They also restricted the size of manufacturing enterprises to small-scale, often cottage, industries. There were a few exceptions. Cheap river shipping permitted Bengal to export rice. The high value of handloom textiles had made India a major exporter of cloth until the early nineteenth century when protective tariffs in Britain and the competition of foreign textile mills brought this trade to an end.