India was the world's largest economy before British colonization, accounting for about 27% of global GDP in 1700—more than all of Europe combined.
India Once Controlled 27% of the World's Economy
In 1700, India was an economic superpower. Under Mughal rule, the subcontinent produced roughly 27% of the world's GDP—a share larger than all of Europe combined. Its textile exports dominated global trade, Indian steel was the finest in the world, and its shipbuilding industry was unmatched.
For perspective, that would be like a single country today producing more than China and the United States combined. India wasn't just rich—it was the center of the global economy.
What Made Mughal India So Wealthy?
India's dominance wasn't accidental. The Mughal Empire controlled vast agricultural lands and produced about 25% of the world's industrial output. Its exports included:
- Textiles: Indian cotton and silk were luxury goods worldwide
- Steel: Indian wootz steel was the finest available, used for legendary Damascus blades
- Spices: Pepper, cardamom, and other spices drove global trade routes
- Ships: Indian shipyards built vessels for European navies
Economic historian Immanuel Wallerstein notes that per-capita consumption and agricultural output in 17th-century Mughal India likely exceeded that of Europe—and was certainly higher than what Indians would experience under British rule.
The Economic Collapse
When the British East India Company arrived in 1600, they came as traders seeking India's riches. Over the next 150 years, they gradually expanded their control, culminating in the Battle of Plassey in 1757 when they seized Bengal.
What followed was systematic deindustrialization. British policies dismantled India's manufacturing base to protect Britain's own textile industry. Raw cotton was shipped to Manchester, processed into cloth, then sold back to India at a profit.
The numbers are staggering: India's share of global GDP fell from 27% in 1700 to just 4% by 1950. By the time Britain departed in 1947, it had dropped to 2%. Meanwhile, living standards plummeted—in 1600, Indian per-capita GDP was over 60% of Britain's, but by 1871 it had collapsed to less than 15%.
The Great Reversal
For over 1,700 years—from the 1st century CE until the 18th century—India's GDP consistently ranged between 25-35% of world output. No other region maintained economic dominance for so long.
Today, India is rebuilding. Its economy is now the world's fifth-largest and growing rapidly. But the gap between its historical peak and its modern position remains one of history's most dramatic economic reversals—a 25-percentage-point collapse over two centuries of colonial rule.