Did Indians Import Gold Only for Hoarding? A Re-Examination of Gold Flows in British India Between 1861 and 1919

An inadequate understanding of the nature of the colonial economy of India characterised by tax-financed transfers to Britain coupled with the incomplete nature of trade data in the Statistical Abstracts of British India, has led economic historians to wrongly conclude that India imported gold only for hoarding. Using Council Bills data to define India’s commodity export surplus more accurately, this paper offers a retrospective re-classification of British India’s gold flows from 1861 to 1919 into Commodity and Financial gold and shows that a substantial proportion of gold imported towards the end of the nineteenth century was for financial purposes.