New middle class, Indian National Congress, 1860s–1890s

By 1880 a new middle class had arisen in India and spread thinly across the country.^[79] Moreover, there was a growing solidarity among its members, created by the "joint stimuli of encouragement and irritation."^[79] The encouragement felt by this class came from its success in education and its ability to avail itself of the benefits of that education such as employment in the Indian Civil Service.^[80]It came too from Queen Victoria's proclamation of 1858 in which she had declared, "We hold ourselves bound to the natives of our Indian territories by the same obligation of duty which bind us to all our other subjects."^[81] Indians were especially encouraged when Canada was granted dominion status in 1867 and established an autonomous democratic constitution.^[81] Lastly, the encouragement came from the work of contemporaneous Oriental scholars like Monier Monier-Williams and Max Müller, who in their works had been presenting ancient India as a great civilisation.^[79] Irritation, on the other hand, came not just from incidents of racial discrimination at the hands of the British in India, but also from governmental actions like the use of Indian troops in imperial campaigns (e.g. in the Second Anglo-Afghan War) and the attempts to control the vernacular press (e.g. in theVernacular Press Act of 1878).^[79]

It was, however, Viceroy Lord Ripon's partial reversal of the Ilbert Bill (1883), a legislative measure that had proposed putting Indian judges in the Bengal Presidency on equal footing with British ones, that transformed the discontent into political action.^[80] On 28 December 1885, professionals and intellectuals from this middle-class—many educated at the new British-founded universities in Bombay, Calcutta, and Madras, and familiar with the ideas of British political philosophers, especially the utilitarians assembled in Bombay. The seventy men founded the Indian National Congress; Womesh Chandra Bonerjee was elected the first president. The membership comprised a westernised elite, and no effort was made at this time to broaden the base.

During its first twenty years, the Congress primarily debated British policy toward India; however, its debates created a new Indian outlook that held Great Britain responsible for draining India of its wealth. Britain did this, the nationalists claimed, by unfair trade, by the restraint on indigenous Indian industry, and by the use of Indian taxes to pay the high salaries of the British civil servants in India.