Rajani Palme Dutt gave the theory that British Colonialism is divided into three phases. The phase of Merchantilism, Free Trade Mercantile Capitalism and Finance Imperialism. The first phase dated 1757-1813 was a phase of direct plundee by the East India Company. In the second phase dated 1813-1858, India was converted into a supplier of raw materials to British industries. The third phase, which started from later half of the 19 th Century where British finance was used to exploit Indian colony of British.