The industrial policy pursued by the Britishers under the colonial administration aimed at promoting the modern industries in Britain. This was achieved through
(i) Decay of Handicraft Industry The traditional and important handicraft industry of India, in the absence of any patronage and incentives started to decline. The decline of handicraft industry, not only created massive unemployment but also resulted in a spur of demand in the Indian consumer market which was now deprived of supply of locally made goods. This demand was met through goods produced in British Industries.
(ii) Limited Growth of Public Sector Enterprises Only those public sector enterprises which
subserved the interests of the Britishers were developed such as railways, postage and telegraph, etc.
(iii) Absence of Capital Goods Industries The consumer goods industries were not supported by the capital goods industry. There was also a dearth of basic and heavy industries.
(iv) Bleak Growth of Modern Industry Because no initiative was taken by the British Government to industrialise the Indian economy, therefore modem industries registered a negligible growth rate. A few enterprising entrepreneurs opened iron and steel industry, sugar,cement and paper mills.