Abstract: This paper examines the connection between agriculture and industrialization in India from 1931 to 1951, focusing on input-output linkages. We differentiate between backward and forward linkages and analyze how their roles evolved during the process of industrialization. We do so by assembling a new district-level dataset combining district-level industrial occupation for 246 districts of India in 1931 and 1951 with district-level agricultural output from the statistics of British India of 1919/1920. A typical example of backward linkages are agricultural tools produced by (potentially small-scaled) manufacturers, such as the plough for land preparation or the sickle to cut paddy. Cotton is a typical example of forward linkages as it serves as input into industrial production. Our findings reveal that in 1931, both backward and forward linkages positively correlated with industrial employment. By 1951, however, the relationship altered, as stronger backward linkages became negatively associated with industrial employment, while forward linkages maintained a positive correlation. This ``reversal of linkages'' proves robust upon including district-level controls and employing a 2SLS approach using crop suitability as instruments. We collect detailed plant-level data on cotton processing and textile production to shed light on the mechanisms. The growth of downstream plants during India's industrialization drives forward linkages' rising importance.



for further information contact patrizia.pellizzari@unibocconi.it