This chapter deals with events that took place in British India during the first half of the twentieth century, and resulted in the transfer of power in August 1947 to independent governments in India and Pakistan. Both these new regimes claimed legitimacy as nation-states, with clear ideologies based on a spiritualised secularism in India and a distinctive Islamic identity in Pakistan. These events have spawned a large literature of exposition, explanation and recrimination. The sheer size and complexity of this literature may be daunting to non-specialists, but it provides an excellent foundation for an investigation of the relationship between economic change and the formation of nation-states in the modern world.

The historical process that led to the creation of India and Pakistan had a number of distinctive features caused by the nature and purposes of British colonial control. In the first place, the new states replaced an existing imperial administration which had recruited heavily from the local population. Thus, while new nations were formed in 1947, they inherited much of their state structures from the past. Most members of the bureaucracy, judiciary, police and army in the new states had held similar positions under the colonial regime. In an important sense, what happened in 1947 was that an existing colonial state structure was given a post-colonial legitimacy by the transfer of power to the elected representatives of new nations.