The debate over the mode of production in India has suffered from a tendency to focus individually on agriculture, industry, or imperialism - ignoring either the total context or local specificities. Mechanistic transplantation of concepts from elsewhere and black-and-white answers to such matters as the emergence of capitalism and post-colonial dependency have only served to confuse the picture.

Tracing the historical antecedents of the present mode of production, this paper finds that an extremely heterogeneous pre-capitalist mode and later a colonial mode of production served to both lay the material basis for, and retard the development of, Indian capitalism. What has emerged from this distorted development is an interpenetration and integration of pre-capitalist and capitalist relations, generating not so much two independent modes as effectively a single mode with dual character (not to be confused with 'dualism'). Having at once both accommodating and conflicting internal dynamics, the dual mode has features of both stability and transition which can be analysed in terms of mixed relations and the patterns of dominance.

In the current international context, India may be characterised as 'relatively politically independent, relatively economically dependent' and qualitatively differentiated, on the one hand, from the semi-colonial and neo-colonial models, and, on the other hand, from revolutionary states which have removed themselves from the world capitalist periphery.

The paper is being published in two instalments. The first, published last week, briefly surveyed the historical antecedents of the present mode of production and reviewed the debate over the mode of product on in Indian agriculture that has taken place till now.

In this, the second instalment, the author considers in detail the dynamics and relations of the process of transition in the dual mode of production and the implications of this dual mode hypothesis for India in its present context of post-colonial dependency.