If the war has wrought great changes in the political life of India, in its status within the Empire and in its constitutional relations with the United Kingdom, it has produced equally important changes in its economic situation and outlook. The Montagu-Chelmsford Report had not failed to note how largely economic factors entered into the political situation which the Secretary of State and the Viceroy were primarily concerned to study. India is, and probably must always remain, essentially an agricultural country, and its economics must always suffer from the exceptionally unstable conditions to which, except within the relatively small areas available for irrigation, dependence upon a precarious rainfall condemns even the most industrious agricultural population. Many circumstances had combined to retard the development of its vast natural resources and the growth of modern manufacturing industries. Few British administrators during the last half-century had realised their importance as Lord Dalhousie had done before the Mutiny, until Lord Curzon created a special department of commerce and industry in the Government of India. The politically minded classes, whose education had not trained them to deal with such questions, were apt to lose themselves in such blind alleys as the "doctrine of drain." But as they perceived how largely dependent India was on foreign countries for manufactured goods, whilst her own domestic industries had been to a great extent crushed in hopeless competition with the products of the much more highly organised and equipped industries of European countries, they rushed to the conclusion that an industrial revival might be promoted by a crude boycott of foreign imported goods which would at the same time serve as a manifestation of their political discontent. The _Swadeshi_ movement failed, as it was bound to fail. But failure intensified the suspicion that, as India's foreign trade was chiefly with the United Kingdom, her industrial backwardness was deliberately encouraged in the interests of British manufactures, and it was not altogether unjustified by the maintenance of the excise duty on locally manufactured cotton goods, which protected the interests of Lancashire in the one industrial field in which Indian enterprise had achieved greatest success. The introduction of an annual Industrial Conference in connection with the Indian National Congress was the first organised attempt of the politically minded classes to link up with politics a movement towards industrial independence. It assumed increased bitterness with the disastrous failures of Indian banks started on "national" lines in Bombay and the Punjab. The cry for fiscal freedom and protection grew widespread and insistent before the war broke out. Then, under the pressure of war necessities, the Government of India explored, as it had never done before, the whole field of India's natural resources and of the development of Indian industries.