Economy

Economy

(a)  Agriculture

India was predominantly an agricultural country, andaverylargeproportion of the population lived in rural areas and depended on agriculture for their livelihood. Both in the north and the south, agriculture depended heavily on irrigation. Canals and wells added to the water sources in addition to rainfall and rivers. The state was actively involved in the construction of canals for increasing the availability of water. The biggest network of canals known in India until the nineteenth century was created in the fourteenth century by Firuzshah Tughluq in the Delhi area. Construction of lakes, tanks and reservoirs with sluices to let out the water as well as the use of check dams all increased the availability of water for irrigation. Cultivators were also encouraged to dig wells. Lift irrigation was used to draw the water. In the north, the Persian wheel was used for lifting water from wells. In the Tamil region, the Cholas had created a network of canals for irrigation connecting the tributaries of Kaveri. Lakes and tanks also added to the water sources.

An important feature of Indian agriculture was the large number of crops that were cultivated. The peasant in India was more knowledgeable about many crops as compared to peasants in most of the world at the time. A variety of food grains like wheat, rice, and millets were grown apart from lentils and oilseeds. Many other commercial crops were also grown such as sugarcane, cotton and indigo. Other than the general food crops, south India had a regional specialization in pepper, cinnamon, spices and coconut.

In general, two different crops were grown in the different seasons, which protected the productivity of the soil. Maize and tobacco were two new crops which were introduced after the arrival of the Europeans. Many new varieties of fruit or horticultural crops like papaya, pineapple, guava and cashew nut were also introduced which came from the west, especially America. Potatoes, chillies and tomatoes also became an integral part of Indian food.

Sericulture (silk production by breeding the mulberry silkworm) was introduced in the fourteenth and fifteenth centuries. By the seventeenth century, Bengal had become one of the largest silk-producing regions in the world. In addition, other varieties of silk (like tassar) were also produced. There is more data for north India especially with respect to crop yields. The data for the thirteenth to fourteenth centuries, as well as the sixteenth century indicate that the productivity per unit of land was as high then as it was at the end of the nineteenth century. There was less population pressure on land in the earlier centuries, so it can be argued that even productivity per capita was higher than it was in more recent times. By and large, the evidence indicates that land was still plentifully available in north and south India. Rural population were known to abandon a settlement and move to a new location in protest against excessive demands by the rulers. People moved to the more arid, black soil regions of western and southern Tamilnadu in the context of decline of Vijayanagar empire and began to cultivate these lands.

The economic condition of the bulk of the peasantry, however, was poor. They generally lived only at a very basic level of subsistence. There are many instances in south India in the seventeenth century when poor peasants sold themselves and their families into slavery. The shipping lists of the Dutch East India Company regularly mention men and women slaves who were transported to the spice producing islands of Indonesia to work on the plantations.

(b)  Non Agricultural Production

Up to the end of the seventeenth century, India was one of the largest manufacturing countries in the world though the economy was primarily agricultural. Non-agricultural production refers to both processed agricultural products and craft production. Primarily the products can be grouped under: processed agricultural products like sugar, oil, textiles; metal work; precious gems and jewellery; ship building; ornamental wood and leather work; and many other minor products.

The organization of production basically depended on the nature of the market for which it was produced. A large part of the production was intended for local use in the village, or at most a rural region. These goods were basic utilitarian goods like pots and pans, implements like ploughs, basic woodwork and coarse textiles. Generally the producer marketed the product himself, and exchange was probably conducted on barter.

In economic terms, what was important was specialized production by skilled craftsmen for an external market, especially in demand among the high income rural and urban upper classes. Such craft production was generally located in cities, or in rural settlements close to the cities. Craftsmen generally worked on an individual or family basis from their homes or workshops though larger manufacturing units (karkhanas) employing many craftsmen were set up under the Mughal state.

(c)  Textiles

Nearly all the cloth that was produced was of cotton, though silk weaving had developed in Bengal where silk was produced, and in Gujarat. Each region of India produced a range of highly specialized local varieties of cotton cloth ranging from the coarse to the superfine, but all were intended for an external market. Dyed and printed/patterned cloth involved the use of vegetable dyes. India had two natural advantages in cotton weaving. The first was that cotton grew in almost all parts of India, so that the basic raw material was easily available. Second, the technology of producing a permanent colour on cotton using vegetable dyes was known from very early times in India. Cotton does not absorb dyes without a preparatory process using mordants, which was not known in the rest of the world. Indigo was the most important dye crop that was grown in India, but other dye crops (like the chay root for red colour) were also grown in India. Dye woods and resins like lac were imported. In addition, a range of colours were produced by using flowers and fruits, and products like turmeric in various combinations.

Textile production involved several stages and craftsmen in the spinning of yarn, weaving and dyeing and printing. Each was a specialized occupation. Yarn was traditionally spun by women and was a home-based occupation. Indian textiles were in great demand in the Asian markets, and were the chief export from India. During the seventeenth century, the Dutch and the English realized that they could procure spices from the spice islands of Indonesia most profitably in exchange for cloth from India. There was also a growing demand for many varieties of Indian cloth like muslin, chintz and so on for personal wear and furnishings in the European market. This resulted in a sudden expansion of demand for Indian cloth, thereby impacting on agricultural sector also.

(d)  Commerce

The large manufacturing sector essentially produced goods for exchange, and not for self-use. Therefore, India had an extensive network of trade for marketing these goods. The village was the basic geographical unit of production, and was essentially a subsistence economy and barter was the medium of exchange. At the next level, the producer (agricultural or non-agricultural) produced a surplus which he marketed himself, usually in regional weekly markets. At the most advanced level, the producer was de-linked from marketing, which was undertaken by merchant intermediaries. All three kinds of markets co -existed in India, in an “ascending scale in the overlapping circuits of exchange”.

Big cities were usually major commercial centres, with bazaars and shops. They were also intermediate points in inter-regional trade since they were connected by a network of roads to other centres in other parts of the country. In addition to such overland trade, smaller ships and boats were used in coastal trade along both the western and eastern coasts of the country. Itinerant merchants, usually nomadic banjaras, carried supplies for the large armies which were on the move. Finally, the major ports (Surat, Masulipatnam, Calicut etc.) were the nodal points in international, maritime trade.

Maritime trade across the Indian Ocean, extending from China in the east to Africa in the west, had flourished for many centuries. India was an integral part of this maritime. This was partly due to its geographical location in the middle of the Indian Ocean. Till the seventeenth century, ships from China rarely ventured further west beyond the ports of the Kerala coast, while ships from the west did not sail beyond Malacca (in Malaysia) to the east. Thus ports like Malacca, Calicut etc. were ‘entrepots’ or intermediate points in this regionally segmented trade. In the seventeenth century, Surat in Gujarat, Masulipatnam in the Golkonda kingdom, Chittagong in Bengal, Pulicat (Pazhaverkadu) and Nagapatnam on the Coromandel Coast, and Calicut in Kerala were all major ports in Asiatic trade.

India was also a major exporter of textiles, pepper, precious and semi-precious gems – especially diamonds which were then found only in India – and iron and steel which were greatly in demand in the entire Asian region. Textiles accounted for nearly 90 per cent of the total exports from India. The major imports from China and the east were silk, Chinese ceramics, gold, spices, aromatic woods and camphor. Silk, drugs, dye woods and sugar were the main imports from Persia, while gold, ivory and slaves were brought in from east Africa.

Until the fourteenth century, in south India, international trade was carried on by merchants who belonged to the corporate group of a guild. Two such guilds are well-known: Ainnurruvar (the Five Hundred) who had their headquarters in Aihole, and the Manigramam. These guilds were heterogeneous agglomerations of many merchant groups and corporate assemblies like nagarams. After the thirteenth century when the local assemblies of villages and towns which had hitherto managed the temples had begun to weaken, the merchant guilds took it on themselves to raise taxes from their members and make joint donations to temples. There are no references to the merchant guilds after the fifteenth century and individual rich merchants took over maritime trade.

A large network of merchants was needed to manage and channel trade across India. Merchants operated at different levels. The petty traders and shopkeepers, single commodity merchants and brokers on the one hand and the richest and most powerful merchants who were involved in exports and imports at the apex of the pyramid on the other had to source the goods for their trade, especially textiles, from a very large hinterland. In order to meet this need they employed local merchants and brokers to procure the textiles and other products which they exported. Trade on such a large scale could function only with the availability of financial and banking services. Bankers and money changers operated in all the big cities, and bills of exchange or hundis (similar to cheques or bank drafts) were used to transfer money from one city to another. Gujarati merchants were found in all the ports of the Persian Gulf and Red Sea, while the Coromandel merchants operated from Malacca and other ports in Siam and Burma.

The European trading companies realized that they could not function in India without the services of these rich and influential merchants. They entered into contracts with them to supply the goods that they wanted and also to lift the imports which they brought in from Europe. The Indian merchants benefited from the business opportunities offered by the European companies. But this scenario began to change from the beginning of the eighteenth century. The Indian merchants were under contract to the Europeans to supply textiles and other goods. But by then the local resources were not enough to produce the quantities required and political disturbances also disrupted all economic activity. This resulted in most merchants being bankrupted diminishing the economic vitality of the merchant community.