Zoya Ansari analyses the
historical connections between Europe and the subcontinent
The subcontinent European Trade was strategically placed in the known world of medieval times and was considered a functional part of international networks. The subcontinent also possessed the ability to produce and supply merchandise of value that had consistent demand in many parts of the world and the best aspect was that it was inexpensive and offered a wide range offering good value. Most importantly, the subcontinent provided a suitable outlet for specialized agricultural, mineral, and other products that the trading partners offered in turn proved beneficial for the indigenous market.
In this way, mutual trade fulfilled the required needs of the subcontinent that were considered more advantageous to it in comparison to its trading partners and this singular benefit provided a tremendous incentive to enhance the trading level. This resulted in a gradual but substantial increase in trade levels in all areas bordering the vast Indian Ocean. The subcontinent was in the firm grip of the Mughal Empire which brought about unprecedented political and economic stability.
It was quite well-known that there were long-standing and wide-ranging links between the Indian Ocean, the South China Sea and the Indonesian archipelago with a considerable amount of trade carried out between China and Japan. On the other side, another link with the Mediterranean via the Persian Gulf and the Red Sea was carried through a combination and land routes spreading the trade links to the widest possible areas. It was known that in the western sector, merchants from Europe, were participants in trading.
Discovery Of The Seaborne Route
Asian merchandise got involved in dealing with them once it reached the southern coast of the Mediterranean to which these merchants regularly traveled to buy them. The rise of the pre-modern world economy, facilitated by the discoveries of the closing years of the fifteenth century by the Portuguese held important implications for the subcontinent from a trade point of view that was tremendously enhanced by the exploration and subsequent availability of seaborne routes between Europe and Asia via the Cape of Good Hope.
The discovery of the seaborne route resulted in a structural modification as it overcame the transport-technology barrier to the growth of trade between the two continents. This breakthrough implied the volume of this trade was no longer subject to the capacity constraint imposed by the availability of pack animals and riverboats. These routes were extensively used throughout the 17th-century band in the early years of the 18th century till their monopoly by the Portuguese was challenged by the northern European trading concerns. By then the Europeans started paying for their bought goods in precious metals instead of doing barter which added tremendous value to trading. This change occurred overwhelmingly due to the inability of European manufacturers to supply goods that could be sold in Asia in reasonably large quantities at competitive terms.
The Dutch and the English followed the Portuguese and on a much smaller scale the Danes, all considered maritime experts having an extraordinary maritime presence. Though the French East India Company was established in 166 it was not until the 1720s that the French presence in the subcontinent became significant. In addition to these corporate groups, there were private European merchants operating simultaneously with a large proportion of these traders traveling with one or the other of the corporate groups.
Organizational Structure Of Procurement
It was noted even then that the organizational structure of procurement and trade that the trading companies as well as the European private traders encountered in India was both efficient and sophisticated. The standard procedure was that the trading market operated on the basis of contracts between merchants and producers, specifying the quantity to the supplied, the price, and the date of delivery. The main issue was a highly developed system of provision of credit and European traders were given the facility of credit that was considered highly developed in its essential form.
Traders were able to raise short-term loans at remarkably low rates of interest that facilitated their activities and the institution of the practice of respondent loans was also quite widespread. It was also known that funds were conveniently transferred from one place to another relatively cheaply by using the traditional method known as hundi. The indigenous money changers known as Sarraf were indispensable to the working of the currency and the monetary system and their efficiency was legendary.
The European traders were facilitated by the uniformity of the Mughal coinage system that was in practice since the consolidation of Mughal rule by the mid of 16th century. Mughal centralized mints developed a monetary system that accepted bullion or coin from local satraps or other private individuals and its practice of free minting ensured that the Mughal coins retained their high degree of fineness unknown for two centuries. Despite the availability of credit and smooth monetary policy European traders consistently suffered from bad debts. This situation occurred when under the contract system, the value of the goods supplied to and accepted by a European company from a particular contract merchant was less than the sum of money given to him in advance.
Trade Relationship Between Europe And The Subcontinent
This situation was tackled through joint stock companies and this method worked well with the passage of time the Europeans not only mastered the intricacies of the system but indeed came to dominate many elements of it, forcing the indigenous merchants to adapt themselves to the new situation. The mutual trade though was predominantly beneficial to the European traders as was borne out by the fact that almost all European maritime countries ventured out towards the subcontinent to engage in it.
The trade relationship between Europe and the subcontinent though was mostly smooth and highly productive yet it was not without conflict, particularly by coastal communities of the subcontinent that kept on resisting the European Trade specifically in respect of pepper monopoly that was vastly consumed within the subcontinent itself. However, on the whole, the maritime merchants of the subcontinent adjusted well to the new tensions created by the presence of European traders and their typical trading practices. The trading community in the subcontinent was quite content with the export surplus and was also happy to witness the rise in the levels of employment generated by this particular angle of trade.
Though the process was time-consuming the attraction in this trade was mutually conducive with particular interest for the Europeans who kept on coming back despite tremendous hazards inherent in the process. It was the superiority of practices acquired by the Europeans overtime that proved a decisive factor that enabled them to claim special privileges of trading in the subcontinent that they were able to enforce through the use of force in the second half of the eighteenth century that altered the nature of the impact of the European trade on the economy of the region. The Weekender