"In the beginning of 19th century …

(i) Development of cotton industries in England : As cotton industries developed in England, industrial group; began worrying about imports from other countries. They pressurised the government to impose import duties on cotton textiles so that Manchester goods could sell in Britain without facing any competition from outside.
(ii) Growth of mills and falling demand :
With growing mill; and falling home demand British industrialists persuaded the East India Company to sell British manufactures in Indian markets as well.
(iii) Two edge policy : To sell its manufactures in India East India Company followed a two edged policy i.e. no taxes on import; but high taxes on exports.
(iv) Manchester goods in India : Cotton weavers and small producer; in India thus faced two problems at the same time, their export market collapsed and the local market shrank, being glutted with Manchester imports. Produced by machines at lower costs, the imported cotton goods were so cheap that weavers could no: easily compete with them.
(v) Shortage of raw material : By the 1860;, weavers faced a new problem. They could not get sufficient supply of raw cotton of good quality When the American Civil War broke out and cotton supplies from the US were cut off. Britain turned to India. .As raw cotton exports from India increased, the price of raw cotton shot up. Weavers in India were starved of supplies and forced to buy raw cotton at exorbitant prices. In this, situation weaving could not pay.