SAUMITRA CHAUDHURY^ Indian Bourgeoisie and Foreign Capital: A Study of Congress Policy towards Foreign Capital, 1931»1961 The EVOLUTION of the nationalist approach towards laying the policy basis for the development of industry in India, which culminated in the protectionist policies and state sponsored industrialization in the aftermath of independence, reveals an interesting interaction between principled positions and pragmatism, in which, more often than not, the latter carried the day. Expediency leads from one set of what are apparently temporary compromises to other more serious ones, while at the same time gradually making the increasingly diluted policy, implicit in these measures of expediency, a replacement for the declared policy, thereby putting into jeopardy the direction initially conceived of and sought. This vacillation and compromise, which characterized the Indian bourgeoisie in the process of its evolution from the operations of the colonial economic apparatus on the one hand and the bedrock of pre-capitalist agrarian relations on the other, not surprisingly reflected itself in the attitude of the party of the Indian bourgeoisie, the Indian National Congress. The Indigenous Bourgeoisie Under Colonial Rule The British, while usurping political power in India, rather than changing the feudal relations in Indian society, merely appropriated them for the perpetuation of colonial rule, with minor modifications. These pre-capitalist relations formed the basis for the direct appropriation of the surplus through land revenue, that is, rent.1 With the end of the Napoleonic Wars, exports of British manufactures, especially of cotton piecegoods, increased at a stupendous pace.2 Side by side there was the growth of commercial agriculture, especially in indigo, opium and later in jute, under the aegis of the East India Company.3 In this process of the appropriation of surplus from India, through revenues (including land revenues) and through the conversion of India into a raw material adjunct of Great Britain, lay the preconditions of accumulation of Indian merchant and usurer capital. *An economist working in Delhi.