A)Civil War in U.S.A. led to a massive short-fall in the world supply of cotton in 1860-64. This led to the increase in cotton prices, export of cotton from India, and the growth on cotton cultivating acreage in India. This Cotton Boom brought the Indian peasants in Cotton growing areas within the ambit of the world capitalist system. The important export houses of Bombay, the wholesale traders in the big cities, the brokers and other middlemen in cotton export trade, down to the level of the village bania who advanced credit to the peasant for cotton cultivation, all profited enormously from the Cotton Boom. This profit, as well as the profit from the commercial crops developed even earlier, viz. opium and indigo. contributed to the accumulation of capital in the hands of some Indian businessmen. 

B)More important was the fact that the Cotton Boom marked the recruitment of India as a supplier of agricultural commodities and raw material needed by the industrialised West. Thus it complemented the process of de-industrialisation. The role of the colony specialising in agriculture and of the industrialised metropolitan country in the West were demarcated clearly in the contemporary theory of international division of labour. This was characteristic not only of India and England, but also of other colonies and metropolises in the stage of industrial capitalist imperialism