• Modern industry in India emerged only after the arrival of Europeans, as earlier economic activities were based on traditional knowledge and technology, and its growth remained slow due to colonial policies that flooded Indian markets with British manufactured goods, thereby stifling indigenous enterprises.

• The deliberate suppression of domestic industries under colonial rule left India poorly industrialised at Independence, weakening its economic base and limiting the growth of modern manufacturing.

• India also suffered on the front of urbanisation, as many older urban centres, once important global economic hubs, declined during British rule, leading to reverse migration to rural areas when handicrafts and indigenous industries collapsed.

• Due to these historical setbacks, post-independence India inherited challenges of low industrialisation, weak urban infrastructure, and underdeveloped cities.

• In contemporary India, industrial development must also address new challenges such as urban slums, environmental pollution, and labour exploitation, while striving for an egalitarian and modern industrial economy.

• Industrialisation and urbanisation are closely interlinked, as urban areas provide ready markets, infrastructure, and skilled manpower, facilitating the shift from an agrarian to an industrial economy.

• Although urban settlements existed in pre-colonial India, their character differed from modern urban centres, which largely evolved under colonial influence to serve administrative, commercial and industrial needs of the British.

• During colonial rule, new urban centres were developed to suit imperial interests, while traditional cities were neglected, reshaping India’s urban landscape.

• Industrialisation, which originated in Britain, spread to India during British rule, creating new economic opportunities, but also generating social, economic and environmental challenges that continue to shape India’s development trajectory.

Evolution of Modern Industry in India

• Early sociological thinkers like Karl Marx, Max Weber and Emile Durkheim analysed industrialisation as a transformative force linked with urbanisation, loss of face-to-face relations, complex division of labour, and repetitive, exhausting work, highlighting both its disruptive and structural effects on society.

• Industrialisation also produced greater equality in some spheres, as caste distinctions weakened and class relations became more important, with factories enabling inter-caste interaction, shared workplaces, common use of public transport, and social mixing in cafes and urban spaces.

• While early sociologists viewed industrialisation as both positive and negative, by the mid-20th century, under the influence of Modernisation Theory, it came to be seen as inevitable and progressive, arguing that societies are at different stages of development but moving towards the same modern trajectory.

• According to Louis Wirth, industrialisation and urbanisation imply not only economic and technological changes but also a fundamental transformation in ways of life, social relations, settlement density and culture.

• Although industries existed earlier in India, post-19th century industrialisation was fundamentally different due to the use of inanimate power, machinery, and mass production, marking a decisive break from traditional production systems.

• First phase (1850–1890) began with cotton and jute industries, characterised by severe exploitation of Indian labour, abysmal wages, inhuman working conditions, absence of safety safeguards, weak labour organisation, and decline of handloom and cottage industries, while profits were exported or drained abroad, causing Indian misery, unlike Britain where industrialisation led to prosperity.

• Second phase (1890–1915) saw the growth of heavy industries like cement, iron and steel, wider geographical dispersion near raw materials, and the rise of Indian entrepreneurship during the Swadeshi Movement, with figures like P. C. Ray and the Tata Group, alongside early growth of the working class movement.

• Third phase (1915–1947) was shaped by World Wars, which brought both industrial stimulus and hardship, promoted indigenisation, expansion of consumer goods industries, consolidation of the capitalist class, growth of trade unions, establishment of the International Labour Organization, enactment of labour laws, partial acceptance of labour demands, and influence of the communist movement.

• Fourth phase (1947–1991) witnessed state-led industrialisation, focused on heavy industries, self-reliance, and import substitution, along with license raj, extensive state control, achievement of self-sufficiency by the 1970s, and technological advances like telecom in the 1980s.

• Post-1991 phase marked liberalisation, privatisation and globalisation (LPG), reducing public sector inefficiencies, expanding private and foreign participation, rapid growth of consumer goods industries, influx of multinational corporations, labour market flexibilisation, and weakening of trade union power, producing mixed outcomes.

• Industrialisation in India generated both opportunities and contradictions, as unlike Britain where people moved from agriculture to industry, early Indian industrialisation caused reverse migration to agriculture, since factories were not labour-intensive, leading to overcrowding of agriculture and peasant impoverishment, as shown by Census of India data.

• Unlike developed countries with predominantly formal employment, over 93% of Indian labour works in the informal sector, even in large firms like Maruti Suzuki, where contract labour, job insecurity, and harsh working conditions dominate.

• The 2011 Manesar plant conflict of Maruti Suzuki highlighted changing employer–employee relations, labour unrest, and violence arising from contractualisation and weakened labour protections.

• Indian industrialisation also followed an abnormal trajectory, as manufacturing failed to absorb surplus agricultural labour, while service sector employment expanded, leaving agriculture overcrowded because the employment-intensive manufacturing phase was skipped.

• A defining feature of contemporary industrialisation is its deep linkage with the market economy, which earlier existed only in localised, limited forms with minimal impact, weak urban–rural linkages, and near absence of cash economy, restricting free exchange.

• The market economy in India, introduced during British rule, integrated rural areas into the global economy in a subservient and exploitative manner, expanded cash-crop cultivation, transferred control to zamindars and colonial state, impoverished the peasantry, and created food security crises.

• Post-independence, attempts were made to correct the skewed market system, leading to major changes such as production for market surplus rather than self-consumption, fundamentally altering the nature of production.

• Cropping patterns changed, with regions like Punjab and Haryana shifting towards commercially lucrative but ecologically harmful crops such as rice, reflecting market incentives overriding ecological suitability.

• Economic relations in rural society transformed, as the Jajmani system declined with the spread of the money economy, conditions of landless labourers worsened, organic bonds broke down, class polarisation increased, and employer–employee relations became contractual.

• Rural–urban migration intensified, driven by job search and uneven regional development, reshaping demographic and social structures.

• Marketisation modernised agriculture, promoting scientific temper, use of modern inputs, and rational decision-making.

• It also fostered consumerism, where consumption became a status symbol in both rural and urban areas.

• Division of labour increased, caste barriers weakened, and new avenues of social mobility opened due to market-driven occupational diversification.

• Family and kinship institutions weakened economically, as families no longer ensured economic placement, and kinship lost importance in economic decision-making.

• Expansion of communication and transportation under marketisation facilitated economic integration across regions.

• Market forces raised aspirations, contributing to higher instances of anomie, while market failures created severe social stress, exemplified by the 2008 global financial crisis.

• Changing work cultures with long hours and flexible timings in IT hubs like Bengaluru, Hyderabad, and Gurugram altered daily life, extended shop hours, increased reliance on crèches, and even led to a re-emergence of joint families, with grandparents supporting working parents.

• Globalisation is a key feature of current industrialisation, defined by the Human Development Report South Asia (2001) as the free movement of goods, services, people and information across borders, reshaping economic and social relations globally.

• One major impact was globalisation of markets, with global products entering India, creating intense competition; for example, Coca-Cola re-entered India in the 1990s and acquired Parle brands like Thums Up, contributing to the decline of traditional beverages and eclipsing small firms through financial muscle and monopolistic tactics.

• Cost-cutting and outsourcing became dominant, with firms reducing permanent employment, outsourcing to smaller firms or households, and multinationals shifting work to cheap-labour countries like India, resulting in low wages, poor working conditions, and difficulties for trade union organisation.

• Consumer culture expanded rapidly, as relocated industries focused mainly on consumer goods rather than strategic or heavy industries, revealing profit-seeking motives rather than equitable development, while technology transfer remained slow and conditional.

• IMF and World Bank funding, given with stringent conditions, exposed developing countries to market volatility and capitalist greed, limiting policy autonomy.

• Declining permanent industrial employment led governments to pursue land acquisition for industry, often causing displacement without local employment, environmental damage, and protests by farmers and Adivasis, who constitute about 40% of the displaced, against low compensation and forced casualisation in urban areas.

• Critics argue that globalisation, along with IMF and World Bank policies, has resulted in the globalisation of poverty, while liberalisation and privatisation worldwide are associated with rising income inequality rather than inclusive growth.