Debate on De-industrialization Revisited: The Process of Decline of Traditional Flexible Manufacturing

In the present article, an attempt has been made to revisit the debate on de-industrialization. The premise, which has been used by the author, is based on an historical fact regarding the organizational structure of production and distribution of handicrafts. The organization of production, which had provided competitive advantage to the Indian manufacturing to become one of the largest suppliers of manufactured goods, had emerged as a consequence of nexus between merchants and craftsmen. The organizational structure that emerged due to their nexus has been defined here as ‘Traditional Flexible Manufacturing’. It has been argued in this article that as long as the nexus between merchants and craftsmen continued to exist, Indian manufacturing had capability to produce abundant quantity of quality handicrafts to satisfy the demands of mass markets. The moment their nexus was broken Indian manufacturing experienced de-industrialization. The nexus, which enjoyed its peak during the Mughal Empire, was broken by the political ascendency of the East Indian Company.