European traders arrived in India seeking wealth. The Portuguese were the first, followed by the Dutch and English. The decline of Portuguese power in the late 16th century allowed others to establish trade. The Dutch, for instance, gained a foothold in Masulipatam in 1606. They focused on trading spices and textiles, realising the profitability of Indian textiles in Southeast Asia.
Establishment of English Trade
The English East India Company was formed in 1600. Initially, the English aimed for the spice trade but shifted focus to textiles due to Dutch dominance in spices. They established a factory in Surat in 1612, confirmed by a farman from Mughal Emperor Jahangir. This marked the beginning of English involvement in Indian trade.
Indian Traders
Despite European dominance at sea, Indian traders remained crucial. They had a better understanding of local markets and operated with lower profit margins. Indian merchants continued to thrive, collaborating with European traders. This partnership allowed for the expansion of trade while maintaining Indian control over many transactions.
Items Exported
India exported a variety of goods. Key exports included textiles, indigo, saltpetre, and raw silk. Indigo was particularly valued for dyeing wool. By the 17th century, Indian textiles gained immense popularity in Europe. The Coromandel coast became a major hub for textile exports, rivaling Gujarat.
Trading Hubs of India
Major trading hubs included Surat, Masulipatam, and Fort St. George (Chennai). Lahore and Multan served as overland trade centres, connecting India to Central Asia. These hubs facilitated the movement of goods and the establishment of Indian trading colonies abroad. Indian traders operated as far as Moscow and the Volga River.
Expansion of Indian Trade
The 17th century saw increase in India’s trade with Europe. Textiles became a staple export. The English and Dutch companies opened new markets, leading to a surge in Indian textiles in England. However, intra-Asian trade remained more profitable, with most spices consumed locally.
Impact of Foreign Trade
The influx of gold and silver into India had deep effects. Prices for goods doubled in the first half of the 17th century. This led to changes in social dynamics, impacting traditional village structures and increasing the wealth of the nobility. The European focus on monopolising trade altered local economies.
