Modern India is a country where economic history is important: current issues and problems, and many of the institutions and systems that shape the contemporary economy, are closely linked to the legacy of the past. Evidence suggests that some growth, capital accumulation, technical change and innovation occurred in colonial South Asia, but despite these signs of dynamism, the Indian economy did not experience anything that can properly be called 'development' under British rule. It is argued that the British rule brought about a process of economic change in South Asia which had some dynamic features, but that these were functionally determined to serve the needs of the metropolitan economy and so established a dependent form of underdevelopment. British imperialism had a very important impact on the economic history of modern South Asia, but it was not the only reason for the phenomenon of limited growth without development.