Collaboration with Indian Merchants
From the beginning of their trading venture in
India, the Europeans realized that they could succeed only with the help and
collaboration of the leading Indian merchants. The merchants, on their part,
saw in the Europeans a great new business opportunity for expansion, and worked
with them. In Surat, the merchants were functioning with the security of the
Mughal government to support them in case of any problems. But in Pulicat, and
later in Chennai under the English and Pondicherry under the French, the
merchants also saw in these early colonial enclaves a place of security from
where they could carry on business safely, free from the continuing political
turmoil in the Tamil region.
The Indian merchants were not at a disadvantage in
their dealings with the Europeans till about 1700. In Surat, the situation
changed because of the threat posed by the Maratha incursions and the inability
of the Mughal state to provide security. In Chennai the English had stabilized
and they could put pressure on merchants to accept unviable terms in order to
increase their exports of cloth to Europe. Gradually, the power relations
between the English and the local merchants began to change. The great merchant
princes who were the dominant players on the trading scene in the previous
century virtually disappeared.
The expansion of demand from Europe for Indian
textiles also had an impact on the indigenous economy. Initially, this
increased demand was beneficial to the local economy. The productive resources
(labour, raw materials and capital) could respond positively. However, as the
demand from Europe continued to grow, the pressure to increase production
exponentially began to strain the productive resources. The frequent famines in
the south and the shortage of food grains and raw materials, for instance, were
additional burdens which the weaver had to bear. Thus, though the increased
trade opportunities were beneficial in the short run, the long term effects
were not necessarily positive.
Over these one hundred and fifty years, the English
in India were gradually undergoing a metamorphosis from being traders to
builders of a trading empire, eventually emerging as the virtual rulers of
large parts of the country.
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