Answer:
Impact of cotton boom in India during the American civil war: (1) When the American Civil War broke out in 1861, a wave of panic spread in Britain. (2) As cotton prices soared export merchants in Bombay were keen to meet the British demand. (3) They gave advances to urban sahukars who in turn extended credit to rural moneylenders who promised to secure the produce. (4) The ryots in the Decoan villages suddenly found limitless credit. (5) While the American crisis continued, cotton production in the Bombay Deccan expanded. By 1862 over 90 percent of cotton imports into Britain were coming from India. (6) As the Civil war ended, cotton production in America revived and Indian cotton exports declined.
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