Economic exploitation preceded and fuelled the revolt. British land revenue settlements — the Permanent Settlement, Ryotwari and Mahalwari — squeezed the peasantry, while the zamindars and talukdars faced summary ejections under new resumption laws. Heavy revenue assessments and forced sales pushed cultivators into debt and famine.

At the same time, cheap machine-made goods from Lancashire destroyed Indian handicrafts — the 'drain of wealth' and 'deindustrialisation' deprived artisans of livelihoods. The railway, telegraph and steamers served British economic interests, and remittance of profits to England drained India's resources. For peasants, artisans and the old service gentry alike, British rule meant economic ruin.