[jjmarr]

It was profitable in a mercantilist world in which one must establish an empire ruled by force in order to obtain free trade. The British Empire had the largest free trade zone and made the most money as a result.

After the Great Depression was aggravated by tariffs like Smoot-Hawley, the United States decided this wasn't sustainable.

After World War 2, the United States was in a position to dictate the global economic system. At Bretton Woods they instituted a system of voluntary free trade.

Now that Britain had voluntary free trade agreements with the rest of Europe, there was no reason to keep British India. Even if France or the United States conquered it, they would still export raw materials to the UK and import manufactured goods.

This was true for the rest of the empire as well.

Meanwhile the costs of maintaining the empire skyrocketed. The military was depleted from WW2. It was easier to grant independence than to rebuild the military.