Commerce with Europe through Dutch, English and French Companies | History Optional for UPSC (Notes) PDF Download

Introduction

• For centuries, India has had trading relations with various countries, though the pattern of trade and the commodities involved have changed over time.
• During the Mughal period, India experienced flourishing trade with a large number of foreign countries.
• A significant aspect of foreign trade during this time was the arrival of European traders, which greatly increased India's foreign trade.
• Most of this trade involved the export of Indian goods, with imports being relatively small.

Inland Trade 

Local and Regional Trade

• Land revenue was collected in cash, indicating that surplus agricultural produce needed to be sold.
• The majority of agricultural produce was sold within the village itself.
• French traveler Tavernier, who visited India in the late 17th century, noted that villages offered a variety of goods such as rice, flour, butter, milk, vegetables, sugar, and sweets.
• In some villages, livestock like sheep, goats, and fowl were also available for sale.
• Large villages often had a sarraf(money-changer) to facilitate transactions.
• Food grains supplied to towns were a crucial aspect of inter-local trade.
• Villages also provided raw materials like cotton and indigo for urban manufacturing.
• This trade was primarily managed by village baniyas and banjaras, who transported food grains to local markets known as mandis or qasbas.

Local Markets and Trade Centers:

• Every locality had markets in nearby towns where people from surrounding areas came to buy and sell goods.
• Hats and penth were periodic markets held on specific days of the week for villagers to exchange or purchase daily necessities.
• Certain large villages or katras between multiple villages had their own mandis.
• At these mandis, villagers sold their products and bought items like salt, spices, metalwork, and other commodities not available locally, such as agricultural tools and coarse cotton textiles.
• More prosperous villagers, as suggested by Hindi writers like Surdas, also purchased luxury items like high-quality cloth and jewelry.
• Local markets were present in all small townships and larger villages.
• Banarsi Das, writing about Jaunpur in the 17th century, noted the presence of numerous markets and wholesale markets in the region.
• These markets were connected to larger commercial centers (cities) in the area.
• Major towns had several bazars, with one serving as the chief market. For example, in Surat, there were vibrant bazaars catering to various goods, including cloth.
• Urban markets not only served local consumers but also acted as storage centers or entrepots for supplies to dealers from other areas.

Specialized Commodity Trading Towns:

• Some towns specialized in trading specific commodities, such as:
• Burhampur(cotton mandi)
• Ahmedabad(cotton textiles)
• Cambay(gems market)
• Surat-Sarkhej(indigo)
• Agra(Bayana indigo)

Mints and Coinage:

• Commercial centers had mints that struck silver, copper, and occasionally gold coins.

Inter-Regional Trade

• Inter-regional trade in India was well-established, with food grains and textiles being the main commodities traded.
• Intraregional trade flourished due to regional specialization in products, including luxury goods.
• Trade involved luxury items, metals, and weapons, but was not limited to these.

Trade in Different Regions
East India:

• Bengal had extensive trade relations with all parts of India.
• Hugli was a major trade center.
• Bengal supplied food grains, sugar, rice, muslin, and silk to other regions.
• Lakhawar produced textiles that were sought after by merchants from across India and abroad.
• Gujarat and Bihar depended on Bengal for raw silk for silk manufacture.

West India:

• Gujarat served as the entry point for foreign goods.
• Gujarat received food grains and silk from Bengal.
• Ahmedabad and Surat were major commercial centers, processing textiles from various regions.
• Gujarat imported pepper and spices from the Malabar coast and lac from Bengal.
• Gujarat exported textiles and silks to northern India and beyond.

North India:

• North India imported luxury items and exported indigo and food grains.
• Agra received large quantities of silk from Bengal.
• Kashmir supplied saffron, wood products, fruits, woollen shawls, and ice to various regions.
• Lahore was a center for handicraft production and the distribution of luxury products from Kashmir.

South India:

• Trade in South India was mainly along the coast.
• Coromandel became a center for textile production, trading with Gujarat.
• Masulipatan traded in Bengal indigo, while tobacco from Masulipatam was sent to Bengal.
• Malabar coast supplied pepper and spices to various regions.

Banjaras:

• The banjaras specialized in carrying bulk goods over long distances, often using thousands of oxen.
• They moved goods such as food grains, pulses, ghee, and salt, sometimes under state protection.
• More expensive goods were transported by camel, mule, or cart, while bulk goods were often moved by river boats.

Coastal Trade

• Waterways and coastal trade were preferred for moving heavier goods because land transport was more expensive.

Western Coast:

• Coastal trade was most prominent on the western coast.
• Due to rampant piracy, most traffic was conducted through convoys.

Eastern Coast:

• On the eastern coast, small boats operated year-round.
• Boats carried goods like copper, zinc, tin, tobacco, spices, and chintz from the Coromandel coast to Bengal.

Trade Routes:

• Goods moved between Sind-Cambay, Gujarat-Malabar, Bengal-Coromandel, and Malabar-Coromandel.

Trade Network:

• A complex network linked wholesalers with merchants at regional and local levels through agents (gumashtas) and commission agents (dalals).

17th Century Trade:

• Dutch and English traders in Gujarat found Indian traders to be active and alert.
• There was intense competition for inside information, ensuring quick responses to demand across the country.

Financial System:

• The growth of a financial system facilitated easy money transmission through hundis.

Foreign Trade 

• India's overseas trade expanded significantly in terms of tonnage and new areas.
• European companies, especially the Dutch and English, played a key role in this expansion.
• Most trade consisted of exports of Indian goods, with imports being minimal.
• The rise of powerful Asian states like the Ottoman, Safavid, and Mughal empires facilitated trade by providing law and order and promoting urbanization.
• European companies recognized India's importance in the Asian trade network, driven by the demand for Asian goods, particularly spices.
• The Dutch and English East India Companies were joint-stock enterprises, differing from the Portuguese royal monopolies.

Exports:

• Textiles were a major export item, with chintz and printed cotton textiles being particularly popular.
• Saltpetre, used in gunpowder production, became a significant export, especially from Bihar.
• Indigo, used for dyeing wool, was in high demand in Europe, with major production in Punjab, Sind, and Gujarat.
• Opium, sugar, and various spices were also significant export commodities.

Imports:

• Imports were limited compared to exports, with silver, copper, lead, and mercury being the main items.
• Luxury items such as silk, porcelain, and carpets were imported from China and Persia.
• Horses from Central Asia were imported in large numbers for military purposes.
• Trade relations also extended to neighboring regions, with items like musk and borax being imported from Nepal, Bhutan, and Tibet.

Trade Routes And Means Of Transport 

Trade Routes

Inland Trade Routes:

• By the early 17th century, a detailed network of trade routes connected all the commercial centers of the Empire.
• Products from Punjab and Sindh traveled down the Indus River.
• Lahore had strong trade links with Kabul and Qandhar to the west, and with Delhi and Agra to the east.
• Agra and Burhanpur were key points for trade in semi-luxury and luxury goods in northern India.
• In the 18th century, as Agra declined, Banaras became a major trade hub.
• Goods from Lahore traveled down the Indus River, while Delhi and Agra were linked by the Jamuna River.
• Silk and fine cotton textiles moved from Bengal to northern India, while fine cotton and specialized cloth came from Gujarat.
• Inland trade was supported by a network of roads improved by rulers since the time of Sher Shah.
• Rains often damaged roads, with travelers noting the poor, muddy conditions of routes like Surat-Burhanpur during the rainy season.
• The state marked road alignments and distances with towers called kosminars, which were placed only on frequently used routes.
• All major routes had sarais(rest houses) at short intervals.
• Tavernier, a traveler, noted that these facilities were as comfortable as those in France or Italy.
• Important trade routes included:
• Agra-Delhi-Kabul
• Agra-Burhanpur-Surat
• Surat-Ahmedabad-Agra
• Agra-Patna-Bengal

Routes for Foreign Trade:

• Overland Route: The most used overland route during the medieval period was linked to the great silk route.
• Great Silk Route: This route started from Beijing, passing through Central Asia via Kashighar, Samarqand, and Balkh, then through Kabul. Indian hinterlands connected at Lahore.
• From Lahore, the route went through Multan, Qandahar, Baghdad, crossed the Euphrates River, and reached Aleppo. Commodities were then shipped to Europe.
• Overseas Route:
• Western Route: Before the sea route around the Cape of Good Hope was discovered, the common sea routes in the north were:
• From Cambay, Surat, and Thatta to the Persian Gulf and the Red Sea.
• From other places like Dabhor, Cochin, and Calicut to Aden and Mocha(a port city on the Red Sea coast of Yemen). At Mocha, some commodities were transported via the Red Sea and then overland to Alexandria via Cairo.
• With the rounding of the Cape of Good Hope, European countries gained new trade routes and no longer relied on Alexandria or Aleppo.
• Eastern Routes: From Hugli, Masulipatnam, and Pulicat, commodities were sent directly to Achin, Batavia, and Malacca.

Means of Transport

Land Transport:

• Pack-oxen and ox-drawn carts: were chief means of transport.
• Oxen were used as pack animals, carrying loads on their backs. Grain merchants traveled with 10,000-20,000 pack animals in a caravan called tanda.
• Oxen-drawn carts were used for transporting goods.
• Camels were commonly used in the western part of the country for carrying goods, while horses were used as mounts.
• In high mountain regions, mules and hill ponies were used to carry heavy loads, with human labor also employed.
• A palanquin, carried by four to six servants, could easily cover 20 to 30 miles a day, although a normal day’s journey was considered to be 8 to 12 miles.

River Transport:

• Boats were commonly used in Bengal and Sindh, with regular traffic between Agra and Bengal via boats.
• Patella, a type of flat boat, was also used for transport.
• River transport was faster and cheaper compared to land transport.
• For example, transporting goods by river from Multan to Thatta cost Rs. 3-4 per maund, while land transport for a shorter distance cost approximately Rs. 2 per maund.

The Mughals and the European trading companies 

• The Mughals and Indian rulers were interested in expanding India’s overseas trade because it would increase their revenue.
• Despite challenges, the Mughal Emperors and local Indian rulers generally welcomed foreign merchants.
• However, the Mughals and Indian rulers were weak at sea.
• To protect Indian ships, they needed to align with powerful European naval powers.
• While the Mughals were strong, European merchants sought concessions through petitions and gifts.
• The European Companies combined trade and diplomacy with war and territorial control over their factories.
• As Mughal power declined, European Companies began imposing their will on Indian rulers for monopolies and concessions, exploiting internal conflicts.

The Dutch 

The Dutch and Mughal India: Trade Relations and Conflicts

• The Dutch received favorable responses from the rulers of Golkunda, who granted them concessions and exemptions in trade.
• Despite these concessions, local officials often evaded orders and imposed duties on the Company’s trade, leading to frequent clashes.
• Jahangir: The Dutch obtained a farman from Mughal Emperor Jahangir, exempting them from tolls from Burhanpur to Cambay and Ahmedabad for west coast trade.
• Shah Jahan: Shah Jahan issued two farmans allowing Dutch trade in Bengal (1635) and at Surat. In 1638, a farman permitted trade in saltpetre. In 1642, he exempted the Dutch from transit duties along the Pipli-Agra route.
• Aurangzeb: In 1662, Aurangzeb confirmed Shah Jahan’s privileges for the Dutch in Bengal. In 1689, he granted concessions in Golkonda, which had been occupied by the Mughals.
• Shah Alam (1709): Reduced customs duty at Swat and Hugli and exempted the Company from transit dues throughout the Mughal Empire. However, local officials hindered the Dutch from availing these exemptions.
• The Company sometimes misused privileges by helping Indian merchants evade customs at Hugli instead of carrying their own goods.
• Jahandar Shah: In 1712, confirmed privileges granted by Aurangzeb in Coromandal. However, local authorities resisted surrendering these privileges.
• A major conflict arose in Palakottu and Drakshavaram between 1725-30, culminating in the attack and plunder of the Dutch factory in 1728.

The English 

Jahangir:

• During Jahangir's reign, the first English envoy reached the Mughal court in 1607 and received a royal farman.
• In 1608, the English established their first factory at Surat, and Captain Hawkins was sent to Jahangir's court to secure trading concessions.
• Jahangir initially welcomed the English envoy and granted him a mansab of 400 zat.
• Although Hawkins received permission to trade at Surat in 1611, he was later expelled from Agra due to Portuguese influence.
• The English realized they needed to counter Portuguese influence to gain concessions from the Mughal court.
• This led to armed conflict between the English and Portuguese at Swally near Surat in 1612 and 1614.
• The Mughals sought to counter Portuguese naval power by aligning with the English and promoting competition among foreign merchants.
• Captain Best secured a royal farman in January 1613, allowing the English to open factories along the west coast.
• In 1615, Sir Thomas Roe was sent to Jahangir's court to expand English trade rights.
• Under pressure, the Mughal authorities issued a farman granting English merchants the right to open factories throughout the empire.
• The English-Portuguese conflict from 1620 to 1630 favored the English, leading to the decline of Portuguese power in India.
• By 1662, the Portuguese had ceded Bombay to King Charles II of England as part of a dowry.
• In the later years of Jahangir's reign, the English Company faced challenges in strengthening their factory at Surat.
• When rival English merchants attacked Mughal ships, the President of the Company at Surat was imprisoned, and the Company had to pay a significant sum for his release.

Sultan Shuja:

• In 1651, Sultan Shuja, the son of Shah Jahan and governor of Bengal, granted the English East India Company a nishan, providing them with trading privileges for an annual payment of Rs. 3000.
• Another nishan in 1656 exempted the Company from custom dues.
• However, after Shuja's departure from Bengal, his successors ignored these orders due to treasury concerns.
• Eventually, custom-free trade for the English was secured through the interventions of Shaista Khan (1672) and a farman from Emperor Aurangzeb.

Aurangzeb:

• During Aurangzeb's reign, the relationship between the Mughal Empire and the English East India Company underwent significant changes.
• With fortified settlements in Madras and Bombay, the English Company felt stronger and sought to abandon its previous role as a humble petitioner.
• They aimed to establish a trade monopoly by driving out other European powers.
• In 1686, the English declared war against the Mughal Emperor and attacked Hugli, but underestimated Mughal strength.
• The Mughals proved more than a match for the small trading Company, leading to British humiliation.
• The English lost all their possessions in Bengal, and their factories in Surat, Masulipatam, and Vishakhapatam were seized, while their fort in Bombay was besieged.
• Realizing the Mughal might, the English reverted to their old policy of petition and diplomacy.
• They agreed to trade under the protection of Indian rulers and were eventually pardoned by the Mughals, who saw the advantage of increasing foreign trade.
• Aurangzeb permitted the English to trade for a compensation payment of Rs. 1,50,000.
• In 1691, the English Company obtained exemption from custom duties in Bengal for an annual payment of Rs. 3000.
• In 1698, a special envoy from the English king secured formal trading concessions and jurisdiction rights over English settlements from Aurangzeb.

Farukh Siyar:

• Between 1714 and 1717, a mission led by Surman successfully obtained three farmans from Farukh Siyar, exempting the English Company from custom dues in Gujarat and Deccan.
• In Bengal, under the leadership of Murshid Quli Khan and Ali Vardi Khan, the privileges granted to the Company were strictly enforced.
• However, after their departure in the 1750s, the Company took advantage of the situation, leading to their victory over the Nawab of Bengal in the Battle of Plassey in 1757.

The French 

French and Maratha Relations (1677-1689)

• In 1677, the French faced resistance from the Marathas, led by Shivaji.
• French commander Martin acknowledged Shivaji's authority and agreed to pay for a trade license in his territories.
• In 1689, the French received permission to fortify Pondicherry from Bambhaji.

French Relations with Aurangzeb and Mughal Empire

• In 1667, the French obtained a farman from Aurangzeb to establish a factory in Surat.
• In 1688, Aurangzeb granted the French the village of Chandranagore.
• The French maintained close ties with Dost-Ali, the Nawab of Carnatic.
• With Dost-Ali's recommendation, Mughal Emperor Muhammad Shah issued a farman allowing the French to mint gold and silver currency.

French Involvement in South India

• Political changes in South India allowed the French to intervene in local affairs.
• Chanda Sahib, son-in-law of Dost-Ali, sought French assistance against the Marathas.
• Due to the French resistance against the Marathas, Emperor Muhammad Shah granted M. Dumas the title of Nawab and a mansab of 4500/12000.
• The French involvement in South Indian politics eventually led to the Carnatic Wars and their defeat.

Administration And Trade 

Mughal Emperors and Trade

• The Mughal Emperors were very interested in trade and often supported trading activities.
• They would sometimes offer concessions to merchants to encourage trade.

Customs and Road Tax

• The policy regarding customs and road taxes changed over time.
• Jahangir eliminated customs duties on trade with Kabul and Qandahar.
• During the Gujarat famine, taxes on various commodities were waived.
• Aurangzeb, upon his accession in 1659, abolished tolls and taxes on foodstuffs.
• At one point, Aurangzeb removed all road tolls.
• There were numerous royal orders and decrees that abolished taxes and customs on specific items.
• Despite the decrees suggesting a liberal state policy towards trade, the reality was different.

Attitude of the Administration

• The provincial governors, market officers, and customs officials were often reluctant to implement liberal policies.
• They sought ways to exploit merchants, with dues often appropriated by officials themselves.
• The situation worsened when officials engaged in trade themselves.
• Nobles and high officials tried to establish monopolies over certain trade items.
• Prince Shuja, son of Shah Jahan, had extensive trade interests.
• Mir Jumla, a noble, attempted to monopolize trade in Bengal.
• Shaista Khan forced the English to sell all their goods and silver to him in exchange for a steady supply of saltpetre.
• Legally, officials and nobles could engage in business activities.
• However, competition was often replaced by coercion and exploitation by those in power.
• Foreign companies, merchants, and individuals frequently complained about official misconduct.
• Although there were royal orders granting relief, delays in communication and long distances often meant that relief was not implemented in a timely manner.
• Despite these challenges, trade continued to grow, attracting merchants from various countries.

“Indian merchants were no more than peddlers.” Critically comment. 

Dutch writer Jacob Vanleur: Pioneer of History Writing on Asian Trade

• Peddler Theory: Vanleur portrayed Asian merchants as mere peddlers, suggesting that their trade was predominantly luxury-oriented.
• Niels Steensgaard: A Danish historian who further developed the Peddler Theory and introduced the concept of the Asiatic trade revolution in the 16th-17th centuries.
• Trade Revolution: Steensgaard attributed the trade revolution to increased European involvement in Indian Ocean trade, emphasizing the role of Europeans over Asians.
• Om Prakash: An Indian historian who conducted a comprehensive study on Asian trade patterns and offered a different perspective on the Asiatic trade revolution.
• Political Stability and Enhanced Production: Prakash highlighted these factors as crucial for the growth of trading activities.
• Diversification of Cargo: Prakash noted the diversification in the composition and origin of Asian cargo entering trade, including items like cotton textiles, spices, jute, indigo, rice, and wheat.
• Challenge to Peddler Theory: Later writings questioned the Peddler Theory, presenting evidence of large merchants, trading houses, ship owners, and modern business practices such as banking, financing, and insurance.
• Expansion of European-Asian Trade: While acknowledging the expansion in volume and value of European-Asian trade, Prakash argued against the notion of trade being solely luxury-driven.