Evening star., 1947-08-14
Britain Confronted
With New Trade Bars
In Indian Freedom
BY the Assoeiotsd Press

by an economic crisis at home, faced
today the prospect of new trade
difficulties stemming from the es-
tablishment of an independent
India.
The Indian Independence Act,
sealed by King George vi last
month, does more than end 90
years of direct British rule over this
country's richest possession, which
the merchant adventures of Lon
don began exploiting $50 years ago
under a royal charter granted by
Queen Elizabeth.
1t creates the two new 1ndepend- =
ent Temporary" dominions of
Hindu India and Moslem Pakistan
and for the first time since the 18th
century gives the sprawling sub
continents 40o,00O,0O people con-
troll over their political destinies
and economic resources.
The dominion satus which India
and Pakistan are assuming is by nc
means permanent. Each has set ur
its own Constituent Assembly and
each will choose it's own constitution
with the ultimate option of becom-
ing sovereign nations totally inde-
pendent of the British common
wealth.
Pakiston May Stay a Dominion.
Britons still hope that both new
countries will choose to enjoy their
independence inside, rather than
outside, the commonwealth.
However, the general expectation
in London is that India will de-
clare herself a sovereign republic
and quit the commonwealth, while
Pakiston will remain a dominion,
If both countries decide to leave
the empire, the consequences for
Britain will be incalculable.
Economically, it will mean she
will have to compete for the vast
subcontinental trade market on
equal terms with the rest of the
worlds producer countries.
Even If she were able to main.
tain her present special trade links
with both states, Britain would Ger.
tainly find it more difficult TO rear
the advantages of the monopolistie
two-way traffic in goods and raw
materials which have accrued te
her over the past 300 years.
Will Build Own Industries.
Both India and Pakistan were
deemed likely to continue The
tendency of building up their owr
national industries which, clearly
would have first claim on all the
raw material resources of the
country.
II this process were accompanied
by a policy of protectionism through
increased tariffs, Britain woulc
suffer more than most other coun.
tries because she has always hac
unrestricted access to Indias raw
material supplies.
India in the past has beer
Britain's principal supplier for jute
jute manufactures, cotton, tea
seeds, various metals, ores anc
chemicals, spices and certain fooc
items. In addition, more recently
Britain has been buying uranium
from Travancore state.
On the other hand, this country
has been India's principal source OF
supply for finished textiles, oils
machinery, vehicles, drugs, hard.
ware and instruments of all types
New Trade Pacts Seen.
Whatever the constitutional fu.
lures of the two states, authorita.
tive Whitehall informants predict.
ed today, Britain would conclude
full-scale trade pacts with each a.
soon as possible in bid to main.
tain existing commercial link.
wherever possible.
A big proportion of Britain's in.
vestments In India already hav,
been taken over as a result of tn,
subcontinent's accumulation of {
vast f1,200 100000 (s4,800, ,000, 900
wartime sterling balance.
This process will be continued BY
both India and Pakistan, to judg,
by announcements made at variou
times by their political leaders
British buildings, installations, por
and naval structures, vessels. sur
plus army stores and equipmen
and capital equipment are expected
to be taken over wherever possible
and will be paid for out of the tw'
new countries huge sterling asset
held in London.