i6o PREFERENTIAL TARIFF 



But changes not. dissimilar in character from 

 those which may be observed in other parts of the 

 British Empire have taken place in the last twenty- 

 five years in the character and direction of Indian 

 trade. Modern methods of production have ex- 

 tended throughout the world; not only Western 

 countries like the United States and Germany, but 

 the Far East and Japan have enormously increased 

 their productive power, and external markets 

 for their goods have become a vital necessity to 

 the stability and progress of their trade. India 

 has been not unaffected by this development. 

 The preponderance of the United Kingdom in 

 India, as in other parts of the Empire, is still 



treat, but it is diminishing. In the last twenty- 

 ve years the share of the British Empire in the 

 import trade of India has fallen from 91 to 70 J per 

 cent., while the share of foreign countries, chiefly 

 Germany, Belgium and Austria-Hungary, has 

 increased from 9 to 29! per cent. Moreover, 

 the United Kingdom has ceased to be the chief 

 external market for Indian products. The United 

 Kingdom proportion has fallen in the same period 

 while the proportion of foreign countries, chiefly 

 Germany and the United States and France, has 

 increased. Time has not admitted of my working 

 out the percentages. Even if allowance is made 

 for the growth of direct trade, by diversion from 

 the United Kingdom to foreign countries in this 

 period, this general statement is still true. On 

 the figures, relating as they do to a considerable 

 period of time, it may be assumed that the com- 

 petition of foreign and Western countries for the 

 Indian market will increase and that the propor- 

 tions of trade will, under present conditions, show 

 a steady movement in the direction indicated. 



But there is one important factor to be con- 

 sidered in regard to India which is of nothing like 



