The correct answer is Both 1 and 2. Explanation & Key Takeaways: Economic History of India: Romesh Chunder Dutt • The nationalist economic agitation started with the assertion that Indians were poor and were growing poorer every day. • Dadabhai Naoroji made poverty his special subject and spent his entire life awakening the Indian and British public to the ‘continuous impoverishment and exhaustion of the country’ and ‘the wretched, heart-rending, blood-boiling condition of India.’ • Other nationalist leaders, journalists and propagandists followed in the footsteps of Dadabhai Naoroji. • R.C. Dutt made the drain the major theme of his Economic History of India following the Economic Drain theory by Dadabhai Naoroji. Hence, statement 1 is correct. • It took India 130 years to manufacture textiles and eliminate British textile imports. • India could probably have copied Lancashire's technology more quickly if she had been allowed to impose a protective tariff in the way that was done in the USA and France in the first few decades of the nineteenth century, but the British imposed a policy of free trade. • British imports entered India duty-free, and when a small tariff was required for revenue purposes Lancashire pressure led to the imposition of a corresponding excise duty on Indian products to prevent them from gaining a competitive advantage. • In the 1880s, Indian customs revenues were only 2.2 per cent of the trade turnover, i.e. the lowest ratio in any country. • In Brazil, by contrast, import duties at that period were 21 per cent of trade turnover. • Until the end of the Napoleonic wars, cotton manufacturing had been India’s main export. • They reached their peak in 1798, and in 1813 they still amounted to £2 million, but thereafter they fell rapidly. Thirty years later, half of the Indian imports were cotton textiles from Manchester. Hence, statement 2 is correct.