World capitalism underwent a basic change towards the end of the 19th century and the beginning of the 20th. century. Monopoly capitalism or imperialism came into being during the time in Europe. Henceforth, the world was having 3 contradictions;
1. Contradiction between farmers and feudal lords;
2. Cpntradiction between Capitalist and Working Class;
3. Contradiction between Capitalists and feudal lords. At this stage another contradiction had developed,
4, Inner contradiction between Capitalists; which led to 1st World War.
It was during this period the parties of the Working Class developed in strength in Germany, France, Italy, Russia and other parts of the world.
In Britain Working Class started movement for reduction of workng hours and enhancement of wages.Working class in Germany, france, Italy grew in strength and formed their own party.
The waves of these developments swept over the independence struggle in India, too.A branch of the Indian National Congress began to function in England.
It is on record that Dadabhoy Naoroji and Madame Cama participated in two different conferences of the Second International.Later, Madame cama and her colleagues established contacts with various revolutionary groups all over Europe, when they started organising revolutionary groups all over Europe.They sought the help and cooperation of the revolutionaries in France, Germany and Russia for securing arms and training in their use. Lala Rajpat Rai, one of the renowned extremist leaders of India stated; It is beyond doubt that the struggle for independence in India received liberal support from the International forces.
Workers and other toiling people of Russia conducted a revolution against the Czar's regime. As a part of the revolution of nationalist movement of China , a move was taken to boycott American goods.Within the Congress a movement was started to dominate the activities of the organisation by the Extremist group and the petition-minded group.
The British monopolist and the Indian Capitalists invested their capitalin Industries in India and their respective interests came to conflict with each other.The capital invested in india by companies registered in England during Russo-Japanese war was 96.7 million pound sterling which was thrice the total investment of capital by all the companies registered in India. This shows that the companies registered in England enjoyed a dominant position in India. Moreover, a considerable number of Industries registered in India were either owned or controlled by the British.
However, the number of industries registered in India and the volume of Capital invested were rapidly increasing. Between 1897 and 1906, the capitaql invested by companies registered in India increased by 36.8 pc. In certain sectors of industry, including the textile industry in Bombay, Indian Capitalists had predominance.The British Government had planned not to allow the development of Indian Capitalism.The resultant conflicts led to the slogan of Swadeshi and triggered a socio-political movement based on it. The Indian Capitalists realized that just as the British capitalists exert influence on their Government for the protection of their own interests, so there was a need for them to influence the rulers both in Britain and in india to protect their own interests. But these were of no avail because when there was a conflict between the British and the Indian capitalists , the British Government always took the side of the British Capitalists. So, the latter came to realize that there was a need for freedom struggle. The situation got aggravated in 1905 when the British Government announced a partition of Bengal.