Industrial Revolution in England had a significant impact on Indian economy. Exports of textiles from India came down as Europeans took over trade by getting concession and trade monopoly from Indian rulers. Colonial power expanded and led to the growth of cities like Bombay and Calcutta. Initially the existing traders and brokers were eliminated from the supply chain to control prices after the drying up of credit for traders. Direct contact was established with weavers and they were now prevented from working for other buyers. Credit was extended to the weavers along with higher demand for cloth. Clashes began to take place with agents due to delays in supply. The situation was further compounded by the development of textile mills in Manchester which completely destroyed the livelihood of Indian weavers. From being an exporter, India went to being an importer of textiles as weavers could not even get a supply of raw cotton. Production was oriented from yarn to cloth-piece production.
Later, wealthy Indians invested in industries in India by setting up factories and mills in various sectors. They were handicapped by British policies of subsidy to goods imported from England. They were also restricted from trading in manufactured goods and limited mostly to trading in raw materials.
Another impact was the employment of workers in factories and mills and concentration of population in Calcutta and Bombay. The rest of the country was dominated by small scale industries and handicraft production. While some weavers who wove fine cloth prospered, most others survived in harsh living conditions.
