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Trade History Trade Policy Export Import

Trade History

Although the courtly culture of the Mughal rulers of the Indian subcontinent is the most well known, a cosmopolitan outlook was not new to India; several sources point to a thriving system of international trade that linked the ports of Southern India with those of Ancient Rome. The chronicles of the Greek Periplus reveal that Indian exports included a variety of spices, aromatics, quality textiles (muslins and cottons), ivory, high quality iron and gems. Considered items of luxury in those days, these were in high demand. While a good portion of Indo-Roman trade was reciprocal, (Rome supplying exotic items such as cut-gems, coral, wine, perfumes, papyrus, copper, tin and lead ingots), the trade balance was considerably weighted in India's favor. The balance of payments had to be met in precious metals, either gold or silver coinage, or other valuables like red coral (i.e. the hard currency of the ancient world). India was particularly renowned for its ivory work and its fine muslins (known in Roman literature as 'woven air'). However, these items must have been quite expensive since the Roman writer Pliny (AD 23-79) complained of the cost of these and other luxury commodities that were imported from India. "Not a year passed in which India did not take fifty million sesterces away from Rome", wrote Pliny. This trade surplus gave rise to prosperous urban centres that were linked to an extensive network of internal trade. Literary records from that period paint a picture of abundance and splendour . The Silappathikaarum (The Ankle Bracelet), a Tamil romance (roughly dated to the late second century AD), provides a glimpse of the maritime wealth of the cosmopolitan cities of South India. Set in the prosperous port city of Puhar (Kaveripattanam), the story refers to ship owners described as having riches 'the envy of foreign kings'. Puhar is portrayed as a city populated by enterpreneurial merchants and traders, where trade was well regulated: "The city of Puhar possessed a spacious forum for storing bales of merchandise, with markings showing the quantity, weight, and name of the owner." The Silappathikaarum suggests that the markets offered a great variety of precious commodities prized in the ancient world. Special streets were earmarked for merchants that traded in items such as coral, sandalwood, jewellery, faultless pearls, pure gold, and precious gems. Skilled craftspeople brought their finished goods such as fine silks, woven fabrics, and luxurious ivory carvings. Archealogical finds of spectacular burial jewellery in southern India appear to corroborate such accounts. Northern India also had its flourishing urban centres. This can be inferred from descriptions of an archealogical site in ancient Taxila. Vladimir Zwalf (in Jewelry, 7000 years - Hugh Tait, Editor) notes: "The site has yielded magnificent and well-preserved gold jewellery, notably necklaces, ear-pendants and finger-rings, characterised by a mastery of granulation and inlay." While most ornaments from that period have not survived, sculpture from several sites shows heavy adornment. Patliputra (now Patna) during the Mauryan period was described by travellers as one of the grandest cities of that period.

TEXTILES

The antiquity of Indian textile exports can be established from the records of the Greek geographer Strabo (63 BC - AD 20) and from the first century Greek source Periplus, which mentions the Gujarati port of Barygaza, (Broach) as exporting a variety of textiles. Archaeological evidence from Mohenjo-Daro, establishes that the complex technology of mordant dyeing had been known in the subcontinent from at least the second millennium B C. The use of printing blocks in India may go as far back as 3000 B.C, and some historians are of the view that India may have been the original home of textile printing. "The export of printed fabrics to China can be dated to the fourth century B C, where they were much used and and admired, and later, imitated." - ( Stuart Robinson: 'A History of Printed Textiles'). The thirteenth-century Chinese traveller Chau Ju-kua refers to Gujarat as a source of cotton fabrics of every color and mentions that every year these were shipped to the Arab countries for sale. " The discovery at Broach of a hoard of gold and silver coins, mostly fourteenth-century and belonging to the Mamluk kingdom of Egypt and Syria, suggests the maintenance of the advantageous trading system recorded since Roman times whereby Indian textiles and other renewable resources were traded for precious metals". - (John Guy, 'Arts of India, 1550 - 1900') Also in the thirteenth century, Marco Polo recorded the exports of Indian textiles to China and South East Asia from the Masulipattinam (Andhra) and Coromandel (Tamil) coasts in the "largest ships" then known. It is conjectured that the initial development of this trade accompanied the spread of Indian cultural influence in South-East Asia. John Guy in the "Arts of India, 1550 - 1900", points out that "textile patterns on sculptures of Indian deities in central Java and elsewhere in the region very probably reflect the prestige cloths in circulation in the late first millennium". Chou Ta-kuan, the Chinese observer of life at the Khmer capital of Angkor at the end of the thirteenth century, wrote that "preference was given to the Indian weaving for its skill and delicacy." Robyn Maxwell (in Textiles of Southeast Asia) observes that elaborately decorated Indian textiles were the most highly valued and notes: " Many spectacular Indian trade cloths, most now two or three centuries old, have been treasured as heirlooms throughout Southest Asia into the twentieth century, making only rare appearances at important ceremonies or at times of crisis". Prestige trade textiles such as Patola (double ikat silk in natural dyes) from Patan and Ahmedabad, and decorative cottons in brilliant color-fast dyes from Gujarat and the Coromandel coast were sought after by the Malaysian royalty and wealthy traders of the Phillipines. The port city of Surat (in Gujarat) emerged as the major distribution point for patola destined for South-East Asia, and was frequented by the ships of the Dutch East India Company. "The right to wear patola was widely claimed as a prerogative of the Indonesian nobility , a practice encouraged by the Dutch East India Company who distributed patola to local rulers as part of the incentives offered to win local trading concessions and co-operation." (- John Guy, 'Arts of India') Textiles also comprised a significant portion of the Portuguese trade with India. These included embroidered bedspreads and wall hangings possibly produced at Satgaon, the old mercantile capital of Bengal, (near modern Calcutta). Quilts of embroidered wild silk (tassar, munga or eri) on a cotton or jute ground, combining European and Indian motifs were comissioned by the Portuguese who had been attracted to Bengal, (as traders had been since the early centuries AD), by the quality of the region's textiles. J.H. van Linschoten, who was based in Goa as secretary to the archbishop in the 1580s, observed that Cambay also produced silk embroidered quilts. Textiles from Golconda and further south also found favor in Europe and South East Asia. In the early 1600s, Dutch and English trading settlements were established in Golconda territory. Produced in the Golconda hinterland, kalamkaris - i.e. finely painted cotton fabrics were bought or commissioned from the port city of Masulipattinam. Buying at source enabled the Dutch and English merchants to procure these textiles at rates thirty per cent lower. 'Palampores' - painted fabrics based on the "tree of life" motif that had become popular in the Mughal and Deccan courts were also highly regarded. The attractiveness of fast dyed, multi-colored Indian prints on cotton (i.e. chintz) in Europe led to the formation of the London East India Company in 1600, followed by Dutch and French counterparts. By the late 1600s, there was such overwhelming demand for Indian chintz (whether from Chittagong in Bengal, or Patna or Surat, that ultimately French and English wool and silk merchants prevailed on their governments to ban the importation of these imported cottons from India. The French ban came in 1686, while the English followed in 1701. (Not all textile producing centres were associated with ports. Several textile producing centres that catered to the internal market, and to the overland international trade were located in Northern and Central India, in the kingdoms of the Rajputs and the Mughals, each with their own unique specialization. While Kashmir was well known for its woollen weaves and embroidery, cities like Benaras, Ujjain, Indore and Paithan (near Aurangabad) were known for their fine silks and brocades. Rajasthan specialized in all manner of patterned prints and dyed cloths. Fine collections of Indian Textiles can be seen in the Calico Museum in Ahmedabad and in the Crafts Museum in Delhi)

CARPETS

According to texts dating from the Buddhist era, woolen carpets were known in India as early as 500 B.C. References to woven mats and floor coverings are not infrequent in ancient and medieval Indian literature. By the 16th century, carpet-weaving centres were established in all the major courts of the sub-continent. However, it is the output of the Mughal period that is now attracting international attention. Dismissed by earlier scholars as mechanical derivatives of Persian carpets, Indian carpets of the Mughal period are slowly gaining recognition as the most technically accomplished classical carpets of all times.

Daniel Walker, curator at the Metropolitan Museum of Art (New York) has described pile-woven carpets of the Mughal era as "among the most beautiful works of art ever created". He suggests that the large-scale production from the imperial workshops of Akbar "set the tone for subsequent carpet weaving in India and resulted in carpets whose jewel-like beauty is still breathtaking". (Ref. Flowers Underfoot, Indian Carpets of the Mughal Era)

DECORATIVE CRAFTS

Under the patronage of the various royal clans that ruled India, particularly the Mughals, the Rajputs and the Deccani nawabs, the decorative arts and crafts reached unprecedented heights. (These traditions were continued, and even augmented by later regional nawabs in Bengal, Mysore, Central India, Punjab, Awadh and Kashmir). European traders did not fail to notice the relatively high quality of Indian craftsmanship and proceeded to set up their own "karkhanas" i.e factories, that rivalled the Mughal and Deccani establishments. Hardwood furniture was a major product of Portuguese patronage, usually richly decorated with inlaid woods and ivory. Catering to the European markets, the items preserved the general forms of European furniture, but were embellished with expensive inlays and carvings that took their inspiration from Indian styles, particularly the Mughal. Several production centres, principally in Sind, Gujarat and the Deccan serviced this trade based in Goa. Mother-of-pearl was one of the materials often used in the decoration of such items, particularly small storage chests. These were produced principally in Ahmedabad and Cambay, and later in Surat. Gujarati furniture with mother-of-pearl inlay is recorded in the Baburnama (early 16th century). The technique of setting mother-of-pearl in a black lac ground, had been employed on wooden tomb-covers of the early seventeenth century in Ahmedabad and Cambay, where a good proportion of such work catered to the Turkish market, as evinced by examples preserved in the Topkapi Saraye Museum of Istanbul. The craft of papier mache, extensively promoted by the Mughals and later the Rajputs, also found favor with 17th century European traders who commissioned Kashmiri artists to produce for the European market.

JEWELRY

Since the Indian sub-continent invariably carried a trade surplus, precious and semi-precious stones, or gold and silver from the international trade complemented internally mined supplies, leading several visitors to India to note the enormous wealth of some of India's most well known kingdoms. They would describe overflowing treasuries, replete with a variety of precious metals and gems. Bazaars exclusively devoted to trade in precious metals and stones were not uncommon. As already mentioned, Tamil texts dating to the 2nd Century AD refer to them, as do the chronicles of the 14th century traveller Ibn Batuta of Tunisia, and Europeans who visited the Vijaynagar, or Golconda kingdoms. Vladimir Zwalf (in Jewelry, 7000 years - Hugh Tait, Editor) observes: "The ostentatious display of jewels at the Mughal court mentioned by all visitors to it is borne out by contemporary miniature paintings and a large quantity of extant pieces. Jewellery was worn by both men and women, and was also used in the ornamentation of arms and armour, furniture and vessels. Gems dominate Mughal jewellery. India was a major source and trading centre for precious stones." Shah Jahan was particularly knowledgeable about gems, and personally supervised some of the works executed in the "karkhanas". Several fine examples of jewelry from the courts of the Mughals and Rajputs, and other regional nawabs can be seen in the collection in the National Museum, including selections from Benaras, Bengal and Southern India.

METALLURGY

Two quotes well summarize the development of metallurgical skills prior to modern industrialization. Sir Thomas Holland, (chairman of the Indian Industrial Commission of 1916-18) reported in 1908: "The high quality of the native made iron, the early anticipation of the process now employed in Europe for the manufacture of high-class steels, and the artistic products in copper and bronze gave India a prominent position in the metallurgical world." D.H. Buchanan wrote in 'Development of Capitalist Enterprise in India, 1934': "In India, steel was used for weapons, for decorative purposes and for tools, and remarkably high grade articles were produced. The old weapons are second to none, and it is said that the famous damascus blades were forged from steel imported from Hyderabad in India. The iron column, called the Kutub pillar at Delhi, weighs over six tons and carries an epitaph composed about 415 A.D. No one yet understands how so large a forging could have been produced at that time." The craft of Bidri-ware which originated in the Deccan, in Bidar and spread northwards to centres like Lucknow, required not insignificant metallurgical skills. The delicate inlay work required discipline and expertise, and additionally, required the knowledge of extraction of zinc (a primary constituent of the Bidri alloy). Unlike copper or iron, zinc was not easily extractable from its ore. Consequently, in Europe, the metal could not be used on an industrial scale until an Englishman patented his zinc distillation process in 1738. However, in India, zinc was first produced in the 1st C BC (The Rasvatnakar mentions the distillation of Zinc in Zawar, Rajasthan, and excavations by the M.S. University verify the existence of kilns used in the distillation of the metal). In Rajasthan, it may have subsequently been used in the production of brass. In any case, by the seventeeth century, zinc was being absorbed in considerable quantity for the production of Bidri-ware which had acquired widespread patronage.

Jaigarh (near Jaipur) was home to one of Asia's largest canon factories. Cannons produced in the Rajput fort of Jaigarh (now on display at the Jaigarh Fort) played a crucial role in the expansion and consolidation of Mughal rule in India.

THE REGIONAL KINGDOMS

While much is known of the Moghuls, less is known of the regional kingdoms who were equally cultured, and also made their mark in manufactures and trade. Susan Stronge - (The Sultanates of the Deccan, Arts of India, 1550 - 1900) writes: " With the exception of architecture, little of the artistic production of the sultanates has survived, and that which has is usually uninscribed and undocumented. Nevertheless, the superb quality of some of the surviving artefacts provides a tantalising glimpse of a world of courtly splendour and cultural refinement, others indicating traditions which, though less elevated, are lively and appealing." Like their Mughal counterparts, the Deccani Nawabs were great patrons of the arts and music, and in portraitures are often depicted with fine jewellery and fine silks. What is of particular interest today is the secular administration of these sultanates. In their patronage of Ragamala paintings, the Deccani nawabs shared the tastes of the Rajputs, and later rulers of the Punjab hills and Punjab plains. Based on the romantic folk-lore of popular traditions, the ragamala painting became a highly sophisticated art form - its lyrical and expressive style appealing to Hindhu, Muslim and Sikh patrons alike. Asad Beg, who chronicled the court of Bijapur's Ibrahim Adil Shah II (1586-1627), mentions that Adil Shah spoke Marathi and his Kitab-i-Nauras, a collection of songs in Deccani Urdu were set to different ragas, some paying homage to Muslim saints, others recalling the Hindhu deities Saraswati and Ganesha. According to Asad Beg, under Ibrahim Shah, Hindhus had access to positions of political importance and economic power. Like Akbar, one of his most trusted officials was Antu Pandit. Another Hindhu, Ramji, was head of the Bijapuri guild ofjewellers and court adviser on matters of jewellery purchase and selection. And like in the 'karkhanas' of Akbar, skilled Hindhu craftsmen, were just as likely to find employment as skilled Muslims. Both courts strived towards perfection in their manufactures, and could not afford religious discrimination.

SHIPPING AND NAVY

Although several nations that traded in the Indian Ocean had merchant ships, India seems to have been the first country of the Indian Ocean to possess real battle-fleets. Reports Auguste Toussaint in 'History of the Indian Ocean', "The Mauryan emperor Chandragupta, who ruled from 321 to 297 B.C had even at that time, an actual Board of Admiralty, with a Superintendent of Ships at its head." References to it can be found in Kautilya's Arthasastra. From their voyages of conquest and trade, we can infer that although much later, the Pallavas, Pandyas and Cholas of South India must also have had an efficient naval organization. Prior to colonial rule, the most significant Navy in the Indian Ocean, was that of the Mughals. At its peak, during the reign of Akbar, it had over 3000 vessels, and was concentrated in the Bay of Bengal, although a good proportion of the fleet was also based in Gujarat. Described in the Ayeen-i-Akbari (Chronicle of the Reign of Akbar), the Navy controlled shipbuilding, conducted naval surveys, collected customs duties and ensured adequate crew recruitments. During Aurangzeb's reign, the Mughal fleet functioned only in the Bay of Bengal, and was heavily used against European traders (particularly the Portuguese) who challenged the Mughal authority and tried to avoid customs payments. In the Bay of Bengal, the kingdom of Assam had its own fleets, while the Marathas had theirs on the West coast. In this period, the trade within Asia was still largely conducted by Asians. The merchants of Surat, who relied upon ships built by the Wadias of Bombay (who had not taken long to copy prevailing European designs) were particularly rich - one of them Virji Vora (who died in the beginning of the 18th century) left a fortune of 22 million gold francs. "According to certain travellers, Surat was then the most beautiful city of India. One small detail will give an idea of the unparalleled luxury that prevailed there: certain streets were paved with porcelain. Francois Martin in his Memoires calls it 'a real Babylon'.'' - (Auguste Toussaint in 'History of the Indian Ocean'.)

THE DECLINE IN TRADE REVENUES

However, such prosperity was not to last long. In that same period, as the revenues to the Mughals from the overland trade dwindled due to heightened competition from the East India Company (which undercut prices for Indian exports offered by the Ottomans of Turkey), the Mughal state after Aurangzeb crumbled, and the strength of the Indian Navy diminished as a consequence. (Although the sea route around the African Cape was much longer than the overland route, the indirect profits from the African slave trade that accrued to the East India Company allowed it to out-compete the Ottomans and thus draw away badly needed revenues from the Mughal treasury). Although the kingdoms of Oudh and Bengal thrived for a while, by 1721 the East India Company had been prohibited from importing Indian textiles into Europe. This was a major economic blow for the entire sub-continent; in particular, the Bengal Nawabs, who were unable to invest sufficiently in maintaining an adequate Navy. At the same time, the East India Company had turned its attention to the contraband Opium Trade with China, which required military cover, for which contingents of the British Royal Navy were sent to the Indian Ocean and the South China Sea, enhancing British military power in the Bay of Bengal. The rapid depletion of the Mughal treasuries, thus started a chain reaction. Unable to supervise the vast regions under its authority, the Mughal state disintegrated. Craftspeople employed in the Mughal 'karkhanas' sought patronage from the regional courts of Awadh and Bengal, or Rajputana and Punjab, or the Marathas of Central India, all of whom experienced a short-lived, but often brilliant cultural renaissance. Mughal and Hindhu (or Sikh) styles were fused in the regions, producing several unique and syncretic traditions. However, after the textile bans and inability to enforce customs collections, the smaller Indian states simply lacked the economic and military means to resist the onslaught of the now richer and more poweful East India Company. The defeat at Plassey in 1757 was thus a monumental turning point in history. A nation that had long enjoyed a trade surplus from its manufactures was soon to be reduced to penury. R. Mukerji describes this process in 'The Rise and Fall of the East India Company', noting that the defeat of the Moghuls and the political ascendance of the East India Company was accompanied by a decline of the Indian mercantile bourgeoisie. The great merchants of India, who had earlier derived protection from the Mughals, and had benefited from the naval patrols of Akbar and Aurangzeb, were by the end of the eighteenth century, practically extinguished in Bengal and elsewhere. Although it took another century for the conquest of India to be consolidated, and although a third of India escaped direct colonial rule, a long era had come to a close. The crafts of that era were either to be obliterated, or survive precariously. Remunerated at a much lower rate, they were unlikely to gain the prestige and respect they once enjoyed. It is important to note this difference between the British colonizers and earlier conquerers who made India their home. Whereas earlier conquerers had taken full advantage of India's manufacturing skills and either steered them in different directions, or attempted to augment and refine them, for the British, India's manufacturing strengths were unnecessary competition, and were best snuffed out, or left to languish . Those who attempt to treat the British as no different from India's previous Islamic rulers do great injustice to this ineffaceable reality. Several of India's previous rulers came as foriegners - as invaders and conquerers - but they lived and died in India. Consequently, the monuments they built, the artefacts they commissioned, the culture that they sponsored - all of it, is now the legacy of the people of the sub-continent. The riches that they acquired were recycled in the same land, but what the British took away may never be returned. Even in its faded glory, India's Islamic legacy has more authenticity than colonial rule. As Indians look to the future, they may gain from this history a justifiable pride in the dedicated pursuit of excellence that was practised by India's craftspeople. They can take note of the technological discoveries and adaptations that took place in an older era, and become inspired to contribute - even in some small way, towards the betterment of a land that is waiting to find its due place in the world once more.

European Domination of the Indian Ocean Trade
Prior to the arrival of the Portuguese in the in the Indian Ocean in 1498, no single power had attempted to monopolize the sea lanes that connected the ports of the Indian sub-continent with the Middle East and East Africa on the West, and the ports of South East Asia and China to the East. Unlike in the Mediterranean where during Roman (and earlier) times, rival powers attempted to control the oceanic trade through military means, peaceful trade had remained the norm in the Indian Ocean. Although there were periods when coastal rulers of the Malabar coast and Southern India were powerful enough to demand toll taxes from passing ships, (and Arab rulers had attempted to control the shipping lanes through the Red Sea) there had not been any systematic attempt by any single political power to eliminate all others from the oceanic trade that touched the Indian subcontinent.

Indian ports that demanded high taxes from docking ships invariably lost out to "free ports" - i.e. ports that demanded very low tariffs from docking ships. In fact, several of the Indian ocean ports were politically neutral entities - giving free and equitable access to shippers of varied nationalities and religious affiliations.

Whereas pre-15th century Arab and Chinese geographical texts spoke of various natural hazards involved in long-distance shipping, they did not cite any significant political or military impediments to undertaking long-distance voyages other than the risk from pirates. Thus, evidence left behind by chroniclers such as Marco Polo, Ibn Batuta, Persian ambassador Abdur Razzaq, the Venetian Nicolo Conti, and Genoan Santo Stefano - all indicate that the Indian Ocean was the scene of thriving trade in the 14th and 15th centuries.

But once the Portuguese had discovered their new route to India, they displayed considerable zeal in seizing the most profitable ports of East Africa, the Persian Gulf, and the Saurashtran, Konkan and Malabar regions in India. A chain of fortified coastal settlements backed by regular naval patrols allowed the Portuguese to gradually eliminate many rivals, and enforce a semi-monopoly in the spice trade by the middle of the 16th C. Local traders were coerced into buying safe passes and paying customs duties to the Portuguese. However, this attempt at a monopoly was challenged by the maritime powers of North Sumatra based in Aceh, as well as by the Omanis, and by Gujarati traders. And as the Portuguese expanded with settlements in South East Asia, China and Japan - the Western monopoly became harder to maintain.

Initial success came to the Portuguese because they had been shrewd enough to develop a strategy of divide and conquer - first concentrating on isolating Muslim traders from the Hindu monarch of Calicut and demonstrating their fire power by launching a two-day bombardment of the vital port city (which was then the largest spice market of the Indian Ocean). These intimidating tactics worked in the favor of the Portuguese who repeated this strategy at other key trading destinations. In 1510, Bijapur's Adil Shahi ruler ceded the control of Goa to the Portuguese. Having realized that the bulk of trade moving out of India landed at one of three ports in the Indian Ocean - i.e. Hormuz in the Persian Gulf, Aden on the Red Sea, and Malacca in the Malay Peninsula - Goa's Indian Governor, Alfonso Albuquerque then shifted his attention to capturing each of these crucial ports. Malacca fell in 1511 and Hormuz in 1515. Only Aden proved elusive.

In 1505, the spice trade from Asia to Europe was declared a 'royal monopoly' by the Portuguese, who saw in this the possibility of extorting tribute through military means. Once Hormuz and Malacca came under the military and political control of the Portuguese, the Portuguese then attempted to expand their monopoly to the inter-Asian trade. For this they needed to seal off independent access to the Gujarati traders who although cut off from Malacca could continue to trade through the Red Sea. For twenty years, the Portuguese kept attacking the ports of Gujarat, even gaining a military victory in 1509 (after an earlier defeat against the combined defences of Diu and an Egyptian naval fleet that had been sent to aid the defences of Diu's Amir Hussain). But nevertheless, Diu did not fall; and attempts to defeat Malik Ayaz, (the next governor of Diu) also failed in 1520-1. In 1530, the Portuguese colonists looted and burned the ports of Cambay, Surat and Rander, but it was only in 1534, when in a moment of weakness, Sultan Bahadur of Gujarat relinquished control of the small port of Bassein. Diu - which had held out for two decades, suddenly became vulnerable when Mughal emperor Humayun cut a deal with the Portuguese to defeat Sultan Bahadur. The Portuguese were given permission to build a fort on the island, which allowed the Portuguese to garner complete political control over the territory by 1555. Portuguese naval control over the Gulf of Cambay became complete when they also captured the port of Daman in 1559. Thus the merchants of Gujarat were brought under control by the Portuguese, and Gujarat - (which on account of its thriving industry and trade may have been one of the richest of India's provinces) saw its fortunes steadily decline.

Following their conquests in Gujarat, the Portuguese then proceeded to augment their control in Sri Lanka by taking over Colombo, and founding a settlement in Meliapur (Sao Tome) on the Coromandel coast. Realizing that the trade from Goa to Bengal was even more lucrative than the Coromandel trade, they then turned their aggressive energies on Bengal. After initial resistance, they were allowed to settle in Chittagaon and Satgaon (near Kolkata), and later moved up-river to Hooghly. This enabled them to establish a virtual monopoly on the trade out of West Bengal by the end of the 16th C, until they were expelled by the Mughal armies in 1632. The Livra das cidades, e fortalezas documented in detail Portuguese control over numerous Indian ocean ports (in addition to those previously mentioned), such as Sofala in Mozambique - a major supplier of African gold, Mangalore, Cannanore, Cranganore, Cochin and Quilon - all important sources for spices and other tropical produce.

This success had come about mainly because unlike the trading ships of their Asian predecessors, the Portuguese ships were extremely well-armed for their times. Moreover, they were fortunate to arrive in the Indian sub-continent at a time when many of the ports were outside the political control of any powerful local ruler who could mount any effective resistance against their superior fire-power and their willingness to use it without hesitation. This was also due to the fact that the great Asian economies of the time were essentially land-based self-reliant economies. External trade did not comprise a significant portion of the economy, and the rulers had little stake in defending the interests of the sea-faring merchant classes. Where the merchant class was of some local significance - such as in Gujarat, the Portuguese did meet with considerable resistance (as also in Sumatra). But when squeezed between two enemies (the Mughals to the North and the Portuguese to the South), Gujarat had little choice but to give in.

Smaller and less-established traders from the Southern and Eastern Indian coast were completely eliminated from the inter-Asian trade, and were never able to recover. Others survived by accepting Portuguese conditions and demands of tribute for safe passage. However, some Gujarati and other Indian traders (along with their counterparts from East Africa, the Middle East and Indonesia) tried hard to bypass the Portuguese monopoly by using smaller ports that were relatively free from Portuguese domination. In addition, Gujarati traders began to emulate the Portuguese practice of arming their fleets, so as to resist the attacks from their Portuguese rivals.

However, the bulk of the profits went to the Portuguese who shipped highly-prized Indian textiles to Indonesia - picking up valuable spices in return for shipment to Europe. But the very profitability of this trade brought competitors. First the Dutch, and soon after the English and the French. In 1656, Colombo fell to the Dutch, and in 1663, the Portuguese lost Cochin to the Dutch. Competition with the British East India Company had led to the loss of Hormuz earlier.

Very quickly, the Dutch and then the English attempted to replace the monopoly of the Portuguese with a monopoly of their own. This led each of them to form their own fortified settlements along the chief trading routes as alternatives to the former Portuguese trading bastions. At first, the Dutch appeared to be more successful than their British and French rivals, and succeeded in establishing their pre-eminence in Indonesia, and once they had outmaneuvered the Portuguese, also came to dominated the shipping out of Gujarat and Sind. It was now the Dutch that imposed their will on most Indian shippers, exacting the taxes that were earlier levied by the Portuguese. At the same time, each of Portugal's European rivals began setting up local factories and trade outlets that matched or exceeded Goa.

Surat (1612), Madras (1639), Bombay (1668), Pondicherry (1674) and Calcutta (1698) thus gradually overshadowed Goa, and took over as the main centers of Indo-European trade. Nevertheless, the Indian (and other Asian) ship-building industry continued to thrive, as ships built in the ports of the Indian Ocean often matched (or even exceeded) the European-built ships in finish and craftsmanship.

Impressed by the range of Indian manufactures (especially textiles), and to supplement their trade, Dutch and British merchants established factories not only in their new port settlements, but also inland. Factories in the centers of textile weaving - such as Bahruch and Ahmedabad in Gujarat, and further inland in Burhanpur, Agra and Lahore were set up. Masulipatam, Pipli, Balasore and Dhaka also drew their attention as did Patna later. In this way, the Dutch and British merchants could keep a much more significant share of the profits that would have otherwise gone to local Indian middlemen. Manufacturing and trading emporiums were also set up in Indonesia by the Dutch.

But even as European-initiated manufacturing grew quite dramatically in the period leading up to direct colonial rule, a successively smaller proportion of the revenues that were generated in Europe reached the highly skilled and industrious Indian or Indonesian workers.

However, with only limited political control in India, British and Dutch traders could not entirely control the price of skilled labor, and had to deal somewhat respectfully with local factory owners, traders and tax officials. India continued to maintain a positive trade balance with respect to its European trade, and European traders were compelled to cover this trade deficit with a steady supply of precious metals. And as long as the European traders furnished the Indian subcontinent with gold and silver, Indian monarchs had some incentive to tolerate the European traders even as they continued to expand their presence, and artfully resisted political control over their Indian activities.

For a while, an equilibrium was maintained; but the European trading companies were always trying to increase their bargaining power by exhibitions of their steadily improving military might. They were constantly testing their powers - probing any weakness on the part of the Indian rulers. In 1691, the East India Company even attempted to challenge Mughal authority, but lost to Aurangzeb's armies, who was determined not to allow the European traders any more concessions than what they had already won.

But once the Mughal empire began to disintegrate, it was only a matter of time before one or the other of the European powers that dominated the Indian Ocean trade would find a way to extend its domination on the Indian heartland as well. In the end, it was the British who won the battle to rule over India, edging out their European rivals who found other territories to colonize in Asia and Africa.

The colonization of India was followed up by the colonization of Burma, Indo-China, the Middle East and virtually all of Africa. China's coastal areas also come under European domination. By the dawn of the 20th century, the US had also emerged as a colonial power, as it took over Spanish colonies in the Caribbean and in the Philippines.

Thus what began as a war against the unarmed free-trading merchants of the high seas, ultimately led to the almost complete subjugation of much of the planet by the Western European (and American) powers, and an enormous and unprecedented flow of wealth from the colonies to Europe and North America. For a century, the Portuguese managed to exact tribute from most of the regional traders who were active in the Indian Ocean. This was followed by a period of Dutch domination, although there were also pockets (and periods) of competitive trade as other European rivals attempted to outflank the Portuguese (and later the Dutch). But in the end, it was the British who won the largest prize - direct colonial rule over two-thirds of mainland India (and indirect rule of the rest) - allowing for the extraction of tributes far greater in magnitude than what had accrued to the Portuguese and the Dutch before them.

But even as much of Asia and Africa were forced into a state of unprecedented poverty and misery, Europe and North America witnessed astonishing developments in science, technology and culture. What was for the West, a triumph of awesome proportions, became an unmitigated tragedy for those that had to suffer the tortuous ordeal of colonization. It is important not to ignore this tragic dialectic of history - that the wealth (that in large part) funded the foundation and sustenance of "Western Civilization" came from the South and the East.

Western champions of "free trade" might also note that it was the armed and willing European monopoly traders who destroyed the free trade of the Indian Ocean. Not the other way around. Protected trade, at the barrel of the gun, not "free" or "fair" trade was at the very heart of the West's early contacts with the South and the East, and to this date, it is the West that appears most unwilling to bring down its own trade barriers even as it attempts to preach "free trade" to the rest of the world.

[Timeline]

1939-1946:
Britain restricts its colony's trade with other nations by controlling the "sterling balances" from India's trade surplus. U.S. imports, however, increase, financed by lend-lease agreements. By the end of World War II, trade between the United States and India is twice its prewar level. India remains dependent on imported machinery, chemicals, and other basic inputs to production.

1947-1951: India is a founding member of the General Agreement on Tariffs and Trade (GATT), yet implements protectionist measures to reduce foreign competition. India accounts for 2.5 percent of world exports, primarily jute, tea, and cotton textiles. Engineering goods represent 1 percent of India's exports.

1952-1960: The government emphasizes self-sufficiency over foreign trade. India's import controls and tariff policy stimulate the production of import-substitution goods by local manufacturers. The government also imposes strict controls on exports.

1961-1969: India's share of world trade shrinks drastically as the country becomes isolated from the international market. Although exports cover the costs of residual import requirements, they are limited. Government-owned industries face little competition or pressure to maintain efficiency. As a result, Indian exports compete on the basis of price rather than quality.

1970-1979: Rising oil prices and subsequent balance-of-payment difficulties encourage India to promote exports. Yet the export sector suffers from India's policy of reserving the manufacture of most labor-intensive, low-tech products for the "small-scale sector" to promote employment. These small producers are unable to compete for contracts with large, international buyers.

1980-1984: India's share of world trade falls to 0.4 percent. Exports finance 60 percent of imports. By 1984, Rajiv Gandhi implements changes to stimulate India's nascent high-tech industry. The government removes import duties on select electronic goods and reduces duties on several critical electronic parts. Indian companies are allowed to partner with foreign companies.

1985-1989: The beginnings of trade liberalization are visible. The government reduces import duties and widens investment opportunities for the private sector. The reduction in tax rates and import deficits is financed through commercial borrowing. Liberalization of imports extends to capital and intermediate goods.

1990-1994: The 1991 economic reform package further liberalizes trade. The government reduces tariffs and trade barriers, eliminates licenses for most industries, and slashes subsidies for domestic products and exports. Many powerful vested interests oppose liberalization, however, and trade remains somewhat regulated. The government bans, for example, the import of many consumer goods.

1995-2001: To meet WTO commitments, India agrees to eliminate quantitative restrictions on many consumer and agricultural product imports, while retaining export subsidies and incentives. Growth of Bangalore's high-tech industry leads to the export of software and supercomputers.

2002-2003: The United States is India's largest trading partner, followed by Japan, the European Union, and OPEC states. India courts Southeast Asia with its "Look East" policy; it holds preliminary trade talks with the regional organization ASEAN, and free trade deals are in the works with Thailand and Singapore.

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Sources
www.census.gov

India Trade Promotion Organisation














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