History of Commerce in India

HISTORY OF COMMERCE IN INDIA
Trade and commerce has played an important

role in growth of an Economy memorial. Example
Harrappa and Mohenjodaro 3300 B.C were
commercial cities . The civilisation had established
commercial connections with Mesopotamia and
traded in gold, silver, copper, coloured
gemstones, pearls, sea shells, terracotta pots, etc.
There were diverse types of coins and weighing
practices. The silk route facilitated its further
progress of domestic and international trade
After Barter
System
Diverse
types of
coins and
weighting
practices
stated
Metal began
to supplement
other
commodities
of money
Documents
such as
Hundi & Chitti
were used
Indigenous
banking
system played
important role
Rise of
intermediaries
took place
Transport
inland and
maritime helped
Trading
communities
strengthened
Hundi:
A Hundi is an unconditional order in writing
made by a person directing another to pay a
certain sum of money to a person named in the
order OR Capable of change through transfer by
valid negotiation
Indigenous banking system
— Helped in lending money and financing
domestic and foreign trade with currency & letter
of credit.
With the development of banking, people began
to deposit precious metals with lending
individuals functioning as bankers or Seths, and
collect money from them. Money served as a
medium of exchange.( Money become an
instrument for supplying the manufacturers with
a means of producing more goods.)
Economic Life of People

Agriculture and the domestication of animals
were important components of the economic life
of ancient people. In addition to this, by resorting
to weaving cotton, dyeing fabrics, making clay
pots, utensils, and handicrafts, cottage industries,
manufacturing, transports (i.e., carts, boats and
ships), etc., they were able to generate surpluses
and savings for further investment. Workshops (
Karkhana) were prominent where skilled artisans
worked and converted raw materials into finished
goods which were high in demand. Family-based
apprenticeship system was in practice and duly
followed in acquiring trade-specific skills. The
artisans, craftsmen and skilled labourers of
different kinds learnt and developed skills and
knowledge, which were passed on from one
generation to another.
Rise of Intermediaries (Brokers, commission

agents, distributions) for whole sale & retail goods
(i) Intermediaries provided security to the
manufactures by taking responsibility for risk
involved.
(ii) Emergence of credit transactions and
availability of loans & advances enhanced
commercial operations.
TRANSPORT
Transport by land and Sea (maritime) was popular
in ancient times. Roads as a means of
communication had assumed key importance in
the entire process of growth. The northern
roadway route is believed to have lengthened
originally from Bengal to Taxila. There were also
trade routes in the south spreading east and west.
Pepper was particularly valued in the Roman

Empire and was known as ‘BlackGold’. Various
empires conflict each others to dominate the
route for this trade. It was in the search for an
alternate route to India for spices that led to the
discovery of America by Columbus in the closing
years of 15th century and also brought Vasco da
Gama to the shores of Malabar in 1498.Calicut
was such a busy market, it was even visited by
Chinese ships to acquire items, like essential oils
and myrrh (used in perfumes, medicines)from the
Middle East, as well as, pepper, diamonds, pearls
and cotton from India. On the Coromandel Coast,
Pulicat was a major port in the 17th century.
Textiles were the principal export from Pulicat to
Southeast Asia
Trading communities strengthened

Different parts of the country had differents
communities dominated trade eg. Punjabi and
Multani merchants in narthern India, Bhats in
Gujarat & Rajasthan, Mahajans from western
India etc.
Merchant corporations were formed: Merchant
communities derived power & prestige from
guilds which were autonomous corporations
formed to protect interest of traders.
These corporations framed their own rules of
membership and professional code of conduct
which even kings were supposed to accept and
respect.
Traders had to pay octroi duties that were levied
on most of the imported articles at varying rates.
Tariffs varied from province to province. The ferry
tax was another source of income generation. It
had to be paid for passengers, goods, cattle and
carts. The right to receive the labour tax was
usually transferred to the local bodies.
The federation chief dealt directly with the king or
tax collectors and settled the market toll on
behalf of its fellow merchants at a fixed sum of
money. The guild merchants also acted as
custodians of religious interests. They undertook
the task of building temples and made donations
by levying a corporate tax on their members. The
commercial activity, thus, enabled big merchants
to gain power in the society.
OR
The guild chief dealt directly with long or tax
collections and settled the
market toll on behalf of its fellow merchants at a
fixed sum of money.
Bankers began to act as trustees and executors of
endowments. Foreign trade was financed by
loans.
The emergence of credit transactions and

availability of loans and advances enhanced
commercial operations. The Indian subcontinent
enjoyed the fruits of favourable balance of trade,
where exports exceeded imports with large
margins and the indigenous banking system
benefitted the manufacturers ,traders and
merchants with additional capital funds for
expansion and development. Commercial and
Industrial banks later evolved to finance trade and
commerce and agricultural banks to provide both
short-and long-term loans to finance
agriculturists.
Trading communities strengthened
Different parts of the country had differents
communities dominated trade eg. Punjabi and
Multani merchants in narthern India, Bhats in
Gujarat & Rajasthan, Mahajans from western
India etc.
Major Trade Centres: Patliputra, Peshwar, Taxila,

Indraprastha, Mathura, Varanasi, Mithila, Ujjain,
Surat, Kanchi, Madura, Broach, Kaveripatnam
Tamralipti.
Major Exports and Imports
Exports consisted of spices, wheat, sugar, indigo,
opium, sesame oil, cotton, parrot, live animals
and animal products—hides, skin, furs, horns,
tortoise shells, pearls, sapphires, quartz, crystal,
lapis, lazuli, granites, turquoise and copper etc.
Imports included horses, animal products, Chinese
silk,flax and linen, wine, gold, silver, tin, copper,
lead, rubies, coral, glass, amber, etc.
Position of Indian Subcontinents in World

Economy (upto 1991)
After independence five year plans were initiated.

Despite these efforts, Indian economy could not
develop at a rapid pace, lack of capital formation,
rise in population, huge expenditure on defence
and inadeuate infrastructure were major reasons.
Finally in 1991 India agreed to economic
liberalisation. Because of this now India is one of
the fastest economies of the world. Initiatives like
Digital India,' 'Make in India', 'Skill India' are
expected to help the economy in terms fo exports
and imports.

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History of Commerce in India

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HISTORY OF COMMERCE IN INDIA

Trade and commerce has played an important

Economic Life of People

Rise of Intermediaries (Brokers, commission

Pepper was particularly valued in the Roman

Trading communities strengthened

The emergence of credit transactions and

Major Trade Centres: Patliputra, Peshwar, Taxila,

Position of Indian Subcontinents in World

After independence five year plans were initiated.

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