The shortfall of the industrial policies pursued by the British colonial administration are listed below –
1. Neglect of Indian handicraft industries – The British had discriminatory tariff policy for the handicraft exports of India. The export to and import from Britain was duty free whereas they imposed heavy export duties on India’s export of handicraft product, which made it costlier and the international demand for our leading industry collapsed.
2. Lack of investment – The modern industries in India required investment in capital goods which was not within the means of Indian investors and the British government was least interested in investing in Indian industries. So the lack of investment in capital goods hampered the growth of Indian Industries.
3. Limited operation of the public sector – The growth in the public sector was limited up to the development required for smooth functioning of the British government like Railways, Ports, Post and Telegraph, etc.
4. Lack of modernization – The British neither encouraged nor permitted the modernization of Indian Industries.