The collapse of Indian textile and crafts were a result of British economic policies. This collapse was caused largely by influx of British goods at cheaper rates to Indian market.
The Act of 1813 imposed one-way trade policy on India. Indian market was soon invaded by British manufactures particularly in cotton textiles. Indian goods made with primitive techniques could not compete with goods produced on a mass scale by machines. Abolition of tariff rates on such imports and hike of excise duties on Indian textiles fueled further degeneration of industries.
The ruin of crafts particularly was furthered with developments railways. British capitalists used railway to reach every corner of India for their goods. It brought death to rural craft. The cotton weaving and the spinning industries were worst heat. Similar faith overtook the iron, pottery, glass, paper, metal oil pressing, tanning and dyeing industries.
The high import duties and other restrictions imposed on the import of Indian goods in to Britain led to virtual closing of European market to export of Indian raw materials greatly injured Indian handicrafts and cottage industrial due to price rise.
Thus, the British ruined Indian crafts by their economic policies. Their free trade policies made India a net importer. It upstaged the self-sufficiency of Indian villages.