Answer:
(i) By 19th
century, British manufacturers flooded the Indian market. Food grain and raw
material exports from India to Britain and the rest of the world increased.
(ii) But the value
of British exports to India was much higher than the value of British imports
from India. Thus Britain had a 'trade surplus' with India.
(iii)
Britain used this surplus to balance its trade deficits with other countries?the
countries from which Britain was importing more than it was selling to.
(iv) This is how a
multilateral settlement system works ? it allows one country's deficit with
another country to be settled by its surplus with a third country.
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