Economy: Trade and Commerce | History Optional for UPSC (Notes) PDF Download

Introduction

During the Sultanate period, India remained a major manufacturing hub for the Asian world and parts of East Africa, with active domestic trade.

• India's position was supported by productive agriculture, skilled craftsmen, strong manufacturing traditions, and experienced traders and financiers.
• The growth of towns and a money nexus in north India after Turkish centralization improved communications, established a sound currency system (silver tanka and copper dirham), and revitalized trade, especially overland trade with Central and West Asia.

Concept of 'induced trade':Trade driven by the land revenue system's demands.

• Factors promoting inland trade:
• Increasing cash-based land revenue collection.
• Growth of cash-based transactions.
• Peasants compelled to sell surplus produce.
• Merchants finding markets in new towns for agricultural products.
• Ruling class claiming most of the peasant surplus by reducing rural intermediaries' share.

Inland Trade (Domestic Trade)

Types of Inland Trade:

• Local Trade: This involves trade between nearby villages, as well as with local markets (mandis) and district towns.
• Long-Distance Trade: This type of trade occurs between major metropolitan towns and distant regions.

Village-town trade (Local trade)

Short-Distance Trade in Bulk Commodities:

• Origin: This trade emerged due to the rise of towns requiring food and raw materials, along with the need for villages to collect land revenue in cash.
• Turnover: High in volume but low in value.
• Commodities: Included food grains(wheat, rice, gram, sugarcane) and raw materials like cotton for urban manufacturing.
• Trade Flow: Characterized by a one-way flow of goods since villages were mostly self-sufficient.
• Role of Village Bania: The village bania was responsible for selling crops and providing peasants with necessities such as salt,spices, and raw iron for blacksmiths.
• Rich Cultivators: Sometimes, wealthy farmers would take their surplus produce to local mandis, a practice encouraged by Alauddin Khalji to prevent hoarding.
• Mandis and Fairs: These were crucial for trade, with local fairs also facilitating the sale of animals necessary for farming and transport.
• Economic Impact: Local trade was vital but did not generate enough wealth for traders to live comfortably, indicating that even the village bania likely had a standard of living similar to that of a rich peasant.

Inter-town trade (Long distance trade)

Long-Distance Trade in High-Value Goods:

• This trade primarily involved luxury items (hence high value) but also included bulk commodities.
• The products from one town were transported to another.
• The trading activities of wealthy traders and financiers, such as the sahs, modis, and sarrafs, were focused on both the movement of bulk commodities within the country and the demand for luxury goods needed by the nobility in large cities.

Bulk Commodities:

• Included food grains, oil, ghee, pulses, etc., with some regions having surpluses and others deficits.
• For instance, rice and sugar from Bengal and Bihar were shipped to Malabar and Gujarat, while wheat from modern eastern U.P. (Awadh, Karanataka/Allahabad) was transported to the Delhi region.
• Overland transport of bulk commodities was costly and was mainly handled by the banjaras, who traveled with their families and thousands of bullocks.
• The operations of the banjaras were likely financed by wealthy merchants, such as sahs and modis.

Expensive but Bulky Commodities:

• Such as fine-quality textiles, were transported on horseback or in bullock carts.
• The movement of these goods occurred in caravans or tandas, protected by hired soldiers due to the unsafe roads, which were threatened by wild animals and dacoits.

Infrastructure Development:

• The construction of the road from Delhi to Deogir by Muhammad bin Tughlaq exemplifies efforts to improve road communication.
• Trees were planted along the road, and halting stations (sara) were established every two miles (karoh) to provide food and drink.
• In Bengal, an embankment was constructed to make the road to Lakhnauti passable during the rains.

Commodities:

• Besides bulk commodities, textiles were a significant trade item.
• Delhi received various goods, including distilled wines from Kol (Aligarh) and Meerut, muslin (fine cloth) from Devagiri, and striped cloth from Lakhnauti (Bengal).
• Wine was both imported and produced locally in Meerut and Aligarh.
• Ordinary cloth came from Awadh, and betel-leaf from Malwa (a twenty-four-day journey from Delhi).
• Candy sugar was supplied to Multan from Delhi and Lahore, while ghee was sourced from Sirsa (in Haryana).
• Horses, both foreign and domestic, were also significant imports.
• Other important items included indigo, spices, ungents, drugs, leather goods, shawls, carpets from Kashmir, and dry fruits.

Long-Distance Inter-Town Trade:

• Involved the transport of goods from entry point towns to other urban centers as well as export goods to exit points.
• Multan served as a major entrepot for overland foreign trade and a center of re-export.
• Gujarat port towns like Broach and Cambay acted as exchange centers for overseas trade.

Finance:

• The hundi system was likely in use, with modis and sarrafs playing a key role in operating and financing it.
• Although there was no formal banking system, the village bania at the local level, and modis and sarrafs at the national level, provided finance for agricultural operations and trade.
• Interest rates on loans were typically 10 percent per annum for large loans and 20 percent for smaller amounts.

Foreign Trade

Overland and overseas trade were in a flourishing state.

India had an old tradition of trade with West Asia and extending through it to the Mediterranean world, as also to Central Asia, South-East Asia and China both by over-seas and over-land routes.

Seaborne

• Khalji annexation of Gujarat likely strengthened trade links between the Delhi Sultanate and regions like the Persian Gulf and the Red Sea.
• Ports such as Hormuz and Basra were crucial for ships navigating the Persian Gulf, while Aden, Mocha, and Jedda along the Red Sea were significant for trade with Gujarat.
• Gujarat's merchandise also reached the East, with ports like Malacca, Bantam (on Java Island), and Achin (now Aceh) in the Indonesian archipelago playing key roles.
• The trade pattern of "spices for coloured cloths" involved exporting coloured cloths from Gujarat, particularly from Cambay and other towns, to Malacca, where they were in high demand. In return, Gujarati merchants brought back spices.
• This trade dynamic persisted even after the Portuguese entered Asian waters.
• Foreign merchants, especially Arabs, were very active in overseas trade in Gujarat and Malabar.
• Indian traders, including Hindus (Agrawal and Maheshwari), Jains, and Bohras, were also prominent in this trade, with communities of Indian traders established in West and South-East Asia.

Evidences

European and Italian Travellers on Cambay and Malacca:

• European traveller Tome Pires(16th century) described Cambay as having two arms, one reaching towards Aden and the other towards Malacca. He emphasized the interdependence of Cambay and Malacca for their mutual prosperity.
• Italian traveller Varthema(16th century) noted the bustling trade at Cambay, reporting the arrival and departure of around 300 ships from various countries. He also mentioned the presence of about 400 Turkish merchants in Diu.

Trade and Horse Exports:

• The IIKhanid court historian Wassaf recorded the annual export of 10,000 horses from Persia to Ma'bar and Cambay.
• The Bhroach coin hoards, containing coins from the Delhi Sultans and gold and silver coins from Egypt,Syria,Yemen,Persia,Genoa,Armenia, and Venice, indicate large-scale overseas trade.

Bengal's Trading Relations:

• The ports of Bengal had trading relations with China,Malacca, the Far East, and South-East Asia.
• Key exports from Bengal included textiles,sugar, and silk fabrics.
• Varthema noted that around fifty ships carried these commodities annually to various places, including Persia.
• Bengal imported salt from Hormuz and sea-shells from the Maldive Islands, with sea-shells being used as coins in Bengal, Orissa, and Bihar. Bengal also imported silks, spices, and other goods.

Shipbuilding and Trade in Sindh:

• Ma Huan, a visitor to Bengal in the early 15th century, observed the prevalence of wealthy individuals who built ships and engaged in foreign trade.
• Sindh, with its notable port Daibul, also participated in seaborne trade, developing close commercial relations with Persian Gulf ports, particularly in the export of special cloths, dairy products, and smoked fish.

Coastal Trade

It was natural for the coastal trade to flourish right from Sindh to Bengal, touching Gujarat, Malabar and Coromandal coasts in between.

This provided an opportunity for exchange of regional products along the coastal line distinct from inland inter-regional trade.

Overland

The Overland Trade Routes and Their Challenges:

• Trade routes connected India to China and Central Asia through the Bolan Pass to Herat and the Khyber Pass to Bokhara and Samarqand. Routes through Kashmir led to Yarkand and Khotan for trade with China.
• These routes faced disruptions from nomadic invasions, such as the Huns in the 6th-7th centuries and the Mongols in the 13th century.
• Trade connections linked India with Central Asia,Afghanistan, and Persia via the Multan-Quetta route, though this route became less favored due to repeated Mongol invasions.
• Trade routes were influenced by the rise and fall of empires, but traders adapted and overcame these challenges.
• Nomadic tribes recognized the value of trade and taxed it for their benefit. The Mongols, even during wartime, engaged in trade of goods like camels,horses,arms,falcons,furs, and musk.
• While Balban struggled to import horses from Central Asia due to Mongol interference, this issue was temporary, as Alauddin Khalji did not face similar difficulties.
• The establishment of the Mongol Empire and the resulting security of roads facilitated trade with China and West Asia. The gradual conversion of the Mongols to Islam further improved trade conditions in the 14th century.
• Multan emerged as a key trading center for overland trade, while Lahore, devastated by the Mongols in 1241, regained its prominence only during the reign of Muhammad Tughlaq.
• Overland trade focused on lightweight but high-value commodities due to the high cost of transportation.

Imports and Exports

Imports:

• Horses: Horses were the most crucial commodity imported into India, primarily for military needs, especially the cavalry, which was a key component of warfare. Superior horses were not bred in India, and the climate was not suitable for Arabian and Central Asian horses. Therefore, they were imported from regions like Zofar (Yemen), Kis, Hormuz, Aden, and Persia. These horses were also valued for display and status.
• Precious Metals: Gold and silver, particularly silver, were in high demand for currency and luxury items, despite not being mined in India.
• Brocade and Silk: These materials were imported from Alexandria, Iraq, and China. Silk was also imported from Persia, where the mulberry tree and silk cocoons were introduced during the 13th and 14th centuries by the Mongols.
• Tea and Silk: Tea and silk were imported from China, with silk also coming from Persia.
• Gujarat: This region was a major center for the entry of luxury articles from Europe.
• Other Imported Commodities: Camels, furs, slaves, velvet, dry fruits, and wines were also among the imported items.

Exports

Trade during the Sultanate Period:

• India mainly exported grain and textiles.
• Regions in the Persian Gulf relied on India for food supplies, including rice,sugar, and spices.
• Other exports included slaves to Central Asia,indigo to Persia, and precious stones like agates from Cambay.

Impact of the Portuguese:

• Before the Portuguese, most overseas trade was controlled by Arab merchants, with a small involvement from Indian traders like Gujarati Banias and Chettis.
• The Portuguese introduced military force to trade, using better-armed ships to dominate.
• They captured key locations such as Goa(1510),Malacca(1511),Hormuz(1515),Bassein(1534), and Diu(1537).
• Goa became a major center for import and export.
• The Portuguese reduced the Arab share of trade, especially in the Indian Ocean, although Arabs remained active in the eastern regions like Malacca.

Effects on Western Indian Ports:

• The Portuguese dominance from Goa negatively impacted other western Indian ports.
• Under Portuguese control, many ports declined due to their aggressive policies, which included:
• Controlling sea routes
• Regulating cargo carried by merchants
• Introducing the cartaz system, a permit required for ships to operate in Asian waters, for which a fee was charged.
• These policies harmed the seaborne trade of both Indians and Arabs.

Commercial Classes

Types of Merchants in Historical Context

Karwanis (nayaks):

• Specialized in transporting grain.
• Organized in large groups, similar to the Banjaras of later centuries.
• Headed by a leader called a "nayak."
• Contemporary mystic Nasiruddin (Chiragh Delhi) described them as those who brought food grains to Delhi.

Multanis:

• Involved in long-distance trade, usury, and commerce.
• Wealthy enough to lend money to nobles in need of cash.
• Predominantly Hindu, with some Muslim merchants, such as Hamiduddin Multani.

Dallals (brokers):

• Acted as intermediaries between buyers and sellers, earning commissions from both parties.
• Raised market prices and were considered the "masters of the market."
• Consulted by Alauddin Khalji to determine production costs for price fixing.
• Experienced a decline during Khalji's reign but regained power under Feroz Tughluq.

Sarrafs:

• Money changers who tested the metallic purity of coins and established exchange ratios.
• Issued bills of exchange or letters of credit, acting as early "bankers."
• Charged commissions for their services, playing a crucial role in the commercial world.

Transport

Modes of Transport in the Empire:

• Goods were transported using pack animals and bullock-carts, with a greater reliance on pack animals.
• Ibn Battuta noted the transport of 30,000 mans of grains on the backs of 3,000 bullocks from Amroha to Delhi.
• Highways through the empire were marked by minarets at regular intervals.
• Afif mentioned the use of bullock-carts for passenger transport for a fee.
• Pack-oxen were a cost-effective transport option, traveling slowly and grazing along the way, especially useful on desert routes.
• Shahabuddin al Umari, in his work Masalik ul Absar, suggested that measures were taken to create a favorable environment for trade.
• Inns were established at each stage (manzil) to facilitate travel and trade.
• In Bengal,Iwaz Khalji constructed long embankments to protect against floods.
• Boats were used for river transport of bulk goods, while large ships were employed for maritime trade.