How Winston Churchill stole from India for Britain’s war

The darkest days.
The darkest days.
Image: Kalyani Bhattacharyee and Sj. Manoj Sarbadhikar/Wikimedia Commons/Public domain
We may earn a commission from links on this page.

“I am glad to learn from the Minister of War Transport that a strict line is being taken in dealing with requests for cereals from the Indian Ocean area. A concession to one country at once encourages demands from all the others,” the prime minister commented in a memo on 10 March 1943. “They must learn to look after themselves as we have done. The grave situation of the UK import programme imperils the whole war effort and we cannot afford to send ships merely as a gesture of good will.”

For three months, Viceroy Linlithgow had been warning about a food crisis in India, and earlier that March a member of his council, Sir Ramaswami Mudaliar, had told the War Cabinet’s shipping committee of “some danger of famine conditions, particularly in Calcutta and Bombay’.” Wheat was available in Australia, but all Indian ships capable of the round trip were engaged in the war effort. Moreover, in January the prime minister had brought most of the merchant ships operating in the Indian Ocean over to the Atlantic, in order to bolster the United Kingdom’s stocks of food and raw materials. He was reluctant to release vessels to carry grain to the colony, because lowered stocks at home would compromise the British economy and limit the War Cabinet’s ability to pursue military operations of its choice—and because his hostility towards Indians was escalating.

The Chancellor of the Exchequer, Sir Kingsley Wood, had long been warning that India had erased its traditional debt to the United Kingdom and was instead becoming a major creditor. The sterling debt owed to the colony was mounting at a million pounds a day. It would fall due right after the war, just when a ravaged if liberated Europe would have to be fed. Food in the post-war era would be scarce worldwide and expensive to import—and His Majesty’s Government would already be bankrupt from paying for the war. In consequence, maintaining British food stocks had become crucially important to the War Cabinet and the debt to India a source of profound frustration.

On 16 September 1942, Amery had recorded in his diary: “Winston burbled away endlessly, the general theme being that it was monstrous to expect that we should not only defend India and then have to clear out but be left to pay hundreds of millions for the privilege.” The Secretary of State for India strove to explain that the debt had little to do with the defence of the colony, but arose from its contributions in manpower and materials to the war in the Middle East and North Africa. “It is an awful thing dealing with a man like Winston who is at the same moment dictatorial, eloquent and muddleheaded,” Amery wrote eight days later. “I am not sure that I ever got into his mind that India pays for the whole of her defence including the British forces in India, or that there is no possible way of reducing these accumulating balances except by stopping to buy Indian goods or employing Indian soldiers outside India.”

The prime minister announced at a War Cabinet meeting that the sterling debt should be neutralized by a counterclaim: a bill presented to India for its defence by the United Kingdom. At the very least, he insisted, the financial agreement forged in April 1940 should be revised to make the colony pay more of the costs of the war. Viceroy Linlithgow had already warned against this course of action: “If any suggestions were made that it was doubtful whether India would in due course receive value for her sterling balances, the reaction on India’s war effort could not fail to be disastrous.” Should the United Kingdom signal its desire to renege on its financial commitments, then industrialists, contractors and even peasants would anticipate a drop in the value of the rupee and baulk at supplying goods for cash.

The sterling debt arose from the fact that commodities were being continually drawn from India with no recompense beyond the promise of payment in the future. The indiscriminate printing of paper money was enabling the Government of India to acquire supplies for the war effort, both within the country and without. But the situation was volatile: inflation was poised to combine with a shortage of every necessity of life to bring disaster to the colony’s poor. Amery did not anticipate that the Government of India’s warning of August 1942—that inflationary financing might lead to “famines and riots”—would actually come to pass. He was, however, cognizant of the risk posed by such a method of war financing to the war effort itself. Should Indians come to believe that His Majesty’s Government would not keep its promises, the torrent of supplies from the colony would dry up.

“Winston cannot see beyond such phrases as ‘Are we to incur hundreds of millions of debt for defending India in order to be kicked out by the Indians afterwards?'” Amery confided to his diary. “But that we are getting out of India far more than was ever thought possible and that India herself is paying far more than was ever contemplated when the present settlement was made, and that we have no means of making her pay more than she wants or supplying goods unpaid for, is the kind of point that just doesn’t enter into his head.” The prime minister was aware that the sterling debt was inverting the economic relationship between colony and colonizer. After the war, money would flow from Britain to India, not as investment to be repaid with interest but as remittance. Whatever the romance of empire, a colony that drains the Exchequer is scarcely worth having—and that reality, notes historian Dietmar Rothermund, would make it easier for India to be finally released.


It was at this inopportune juncture that the viceroy had begun to press the Secretary of State for India to arrange for imports of wheat. He further cautioned: “I think it probable that until our own position becomes clearer we shall have to stop all exports of foodgrains.” After the fall of Rangoon in March 1942, the Government of India had undertaken to supply Ceylon and Arabia with the rice that they used to import from Burma. But in a series of telegrams starting that December, Linlithgow warned Amery that cyclone and subsequent pest infestations in Bengal, and a failure of monsoon rains in Madras, had caused a “serious deterioration in food situation in India.” The rice crop was hardest hit, and what with ongoing exports, it would fall short by “something over two million tons.” Wheat and other cereals would possibly be in excess, but the war effort in India and abroad would absorb much of that surplus, leaving a worrisome overall shortage of a million tons of cereals.


The Government of India would subsequently calculate a gap between rice production and consumption of two million tons in Bengal alone, with a 3.5 million ton shortage in India overall (including export and defence requirements) for the fiscal year that ended on 31 March 1943.


On 2 January 1943, Governor Herbert warned the viceroy that his province was desperately short of wheat. “Bengal’s normal demand is 18,000 tons a month and we are short of nearly twice this amount over last quarter alone. Amount of 110 tons mentioned by you therefore represents only few hours supply.” If factory workers who ate wheat did not get it, they would either riot or leave, so the shortage threatened the production of ammunition. Herbert urged Linlithgow to get hold of a ship “for large-scale import of wheat which might prove palliative for the whole situation” involving both wheat and rice.


On 10 January 1943, Amery received an even more desperate plea from India’s Department of Food. The army’s wheat reserves would run out in a month. The remainder of the wheat promised to the army was waiting in Australia and must be brought in by February; and if shipping could not right away be found for 6,00,000 tons, at least 2,00,000 tons must come by April. “The vital necessity for expedition cannot be exaggerated as we have to carry on with practically no supplies for civil population till some of these shipments arrive,” the officials warned.

It was too late. On 5 January 1943, the prime minister had slashed the number of ships operating in the ‘Indian Ocean area’. The term, used in connection with wartime shipping, referred to the entire span of water rimmed by Australia, Arabia and Africa (as well as the British Empire territories and dominions surrounding this composite body of water). The United Kingdom controlled the merchant ships there, whereas the United States ran the Pacific. Of the forty vessels that remained in the Indian Ocean area after the cut, the lion’s share would go towards supplying Operation Torch, an invasion of French colonies in North Africa, leaving only a handful of ships to ply to and from India—just enough to collect whatever goods the colony could still provide to the outside world.

Excerpted with the permission of Penguin Random House India from Churchill’s Secret War: The British Empire and The Ravaging of India during World War II by Madhusree Mukerjee. We welcome your comments at