WHAT IS FEEDER ECONOMY

The term 'Feeder Economy' is basically used to refer to India as a colony to the Great Britain. Prior to India's independence, the Britain used India as a market to sell its finished products. The cheap raw materials were exported from India to Britain, which were used by the Britain industries to manufacture finsihed goods. These finished goods were then exported to India for final sale. In this way, Britain exploited India's endowment of raw material on one hand, and on the other hand, it discouraged the survival of the domestic industries (as Britain supplied machine-made goods to India at cheaper rates than the hand-made goods by the Indian domestic industries). Hence, in this way, Indian economy was merely reduced to a feeder economy, which used to feed on  the finished goods produced by some other economy.

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