The country must be grateful to him [the Finance Member] for his sympathetic attitude towards Indian industries.  “I think Swadeshi is good, and if the outcome of the changes I have laid before the Council result in some encouragement of Indian industries, I for one shall not regret it.”  For a Finance Minister to say even so much is not a small thing in the present state of India’s dependence upon the most pronounced and determined Free Trade country in the world....  At the same time we regret the absence of fiscal autonomy for India and the limitations under which this Government has to frame its industrial policy.  We regret that Government cannot give the country a protective tariff forthwith.  However excellent Free Trade may be for a country in an advanced stage of industrial development, it must be conceded that Protection is necessary for the success and development of infant industries.  Even pronounced protagonists of Free Trade do not view this idea with disfavour.  That Indian manufacturing industry is in its infancy does not admit of controversy.  Why should not India, then, claim special protection for her undeveloped industry?  Even countries remarkable for their industrial enterprise and excellence protect their industries.  The United States and Germany are decidedly Protectionist.  The British Colonies have protective tariffs... protective in purpose, scope, and effect.  They are not like the Indian import duties, levied for revenue purposes.  The Indian appeal for Protection cannot in the circumstances be unreasonable.  The development of the industries is a matter of great moment to the Empire, and the popular leanings towards Protectionism ought to engage the sympathy of Government.  The imposition of import duties for revenue purposes is sanctioned by precedent and principle alike. ...  And yet for a small import duty of 3-1/2 per cent, upon cotton goods a countervailing Excise duty upon home manufactures is imposed in disregard of Indian public opinion, and the latest pronouncement of the Secretary of State has dispelled all expectations of the righting of this wrong.

No measure has done greater injury to the cause of Free Trade in India or more permanent discredit to British rule than this Excise duty on Indian manufactured cotton, for none has done more to undermine Indian faith in the principles of justice upon which British rule claims, and, on the whole, most legitimately claims, to be based.  In obedience to British Free Trade principles, all import duties were finally abolished in India at the beginning of the eighties, except on liquors and on salt, which were subject to an internal Excise duty.  In 1894, however, the Government of India were compelled by financial stress to revive the greater part of the old 5 per cent tariff on imports, excluding cottons, until the end of the year when cottons were included and under pressure from England.  Lord Elgin’s Government had to agree to levy a countervailing Excise duty of 5 per cent on cotton fabrics manufactured in Indian power mills.  After a good deal of heated correspondence the Government of India were induced in February, 1896, to reduce the duty on cotton manufactured goods imported from abroad to 3-1/2 per cent., with the same reduction of the Indian Excise duty, whilst cotton yarns were altogether freed from duty.  This arrangement is still in force.