The focus of the industrial policies pursued by the colonial government in India was to make our country a mere supplier of Britain’s own flourishing industrial base. The policies were concerned mainly with the fortification and advancement for their own country. The industrial policy pursued by the British colonial administration has the following shortfalls:

1. Neglect of Indian Handicraft Industries: The British followed a discriminatory tariff policy under which they imposed heavy tariffs (export duties) on India’s export of handicraft products while allowed free export of India’s raw material to Britain and free import of British products to India. This made Indian exports costlier and its international demand fell drastically leading to the collapse of handicrafts industries. Also, Indian handicrafts faced a stiff competition from machine made textiles of Britain. The emergence of a new section of people who liked the British goods more in comparison to the domestic goods encouraged British industries at the cost of Indian industries. This led to the declining demand for Indian products and encouraged foreign products.
2. Lack of Investment in Indian Industries: The modern industries in India demanded investments in capital goods that were beyond the means of Indian investors. On the other hand, British government was least interested in investing in Indian industries. Thus, due to the lack of sufficient investment, the growth of Indian industries was acutely constrained.