1) It led to a huge rise in the defence expenditure of the govt. of India.
2) The govt. in turn increased taxes  on individual incomes and business profits.
3) Increased military expenditure and the demands for the war supplies led to a sharp rise in prices which created great difficulties for the common people.
4) Business groups reaped fabulous profits from the war.
5) The war created a demand for industrial goods and caused a decline of imports from other countries in to India.
6) So, Indian industries expanded during the war, and Indian business groups began to demand greater oppertunities for development.

The economic impact of the First World War on India was significant. Here are some of the key points:

1. Increase in demand for goods: The war created a huge demand for goods such as jute, cotton, and wheat, which India was able to supply. This led to an increase in exports and boosted the Indian economy.

2. Rise in prices: The demand for goods during the war led to a rise in prices. This was good for farmers and producers, but it also meant that the cost of living increased for ordinary people.

3. Increase in industrial production: The war created a need for industrial goods such as textiles, steel, and chemicals. This led to an increase in industrial production in India.

4. Recruitment of soldiers: India provided a large number of soldiers for the war effort. This had an impact on the economy because it meant that many men were taken away from their jobs and farms, which affected production.

5. Increase in taxes: The war led to an increase in taxes to fund the war effort. This had an impact on the economy because it reduced the amount of money people had to spend.

6. Inflation: The war led to inflation in India. This was partly due to the increase in prices, but it was also due to the fact that the government printed more money to fund the war effort.

7. Decrease in imports: The war disrupted trade, which meant that India had to rely more on its own resources. This led to a decrease in imports, which had an impact on the economy.

In conclusion, the First World War had a significant impact on the Indian economy. It led to an increase in demand for goods, a rise in prices, an increase in industrial production, the recruitment of soldiers, an increase in taxes, inflation, and a decrease in imports.