India's foreign trade which was not beneficial to the masses as well as to the aspirant capitalist class made India to be a mere exporter of raw materials and market for based on Laipsez-faire (e.g. tariff policy) as well as state intervention (e.g. labour legislation) had an adverse impact on the rise of a stable and strong industrial base. Though, during the first world war, government due to military, strategic and competitive economic reasons proclaimed that industrialisation was its official aim in the economic field, it did not do much to its progress. The industrial sector was starved of funds and a new principle was introduced - the principle of increased imperial preference of favoured rates for the entry of British manufactured goods. The tariff policy which was originally proclaimed to assist Indian industry was soon exploited for encouraging British Industry, costing heavily to the native industry. The imperial policy constantly and vigorously maintained and protected the obsolete economic structure of India in order to strain the emerging productive forces.
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