The Mughal Empire was founded in 1526 by Babur. However, the imperial structure is often attributed to Akbar, Babur’s grandson, who ruled from 1556 to 1605. Akbar’s reign marked advancements in governance and economy, setting the stage for a prosperous empire.
Economic Overview
The Mughal economy was characterised by its large scale and productivity. It is often described as proto-industrial, influencing the early stages of the Industrial Revolution in Europe. By the 18th century, Mughal India produced approximately 28% of the world’s industrial output, primarily in textiles, shipbuilding, and steel.
GDP and Economic Share
During the early 17th century, Mughal territories surpassed both the Qing dynasty and Europe in economic expansion. In 1600, India’s GDP accounted for 22.7% of the global economy. By the end of the century, it had risen to the largest GDP worldwide, overtaking China. Bengal Subah, the richest province, contributed about 12% to the empire’s GDP.
Currency System
The Mughals inherited and improved the currency system established by Sher Shah Suri. They minted high-purity silver coins, maintaining a stable currency. The rupee, introduced by Akbar, became the standard currency, replacing the dam. The Mughals relied on imported bullion, especially from Bengal, due to their strong export economy.
Infrastructure Development
The Mughal Empire constructed an extensive network of roads, facilitating trade and commerce. A public works department was established to design and maintain these roads, linking major towns and cities across the empire. This infrastructure was crucial for economic connectivity.
Sector Contributions
Mughal India’s economy was divided into three sectors – primary (52%), secondary (18%), and tertiary (29%). Urban labour made up 18% of the workforce, contributing to economic output. Agricultural taxes, instituted by Akbar, formed the backbone of the empire’s wealth.
Agricultural Practices
Agriculture flourished under the Mughals. A variety of crops were cultivated, including wheat, rice, and cash crops like cotton and indigo. The introduction of new crops from the Americas, such as maize and tobacco, further diversified agriculture. The Mughal administration promoted agrarian reforms and irrigation systems, boosting crop yields.
Land Revenue System
Akbar introduced the zabt system, replacing the traditional tribute system with a monetary tax system. This system encouraged the cultivation of high-value cash crops and included cadastral surveys to assess land under cultivation. Tax incentives were provided to promote agricultural expansion.
Textile Industry
The textile industry was the largest manufacturing sector in the Mughal Empire. India accounted for 25% of the global textile trade in the early 18th century, with Bengal being the primary centre for cotton production. The quality of Indian textiles, especially muslins, was highly sought after worldwide.
Shipbuilding Industry
Bengal was also renowned for its shipbuilding industry. The region produced advanced ships, with an estimated output of 223,250 tons annually during the 16th and 17th centuries. Innovations such as the flushed deck design improved the seaworthiness of ships, influencing European shipbuilding practices.
Trade Imbalance
Mughal India was largely self-sufficient, leading to a trade imbalance with Europe. European countries exported quantities of gold and silver to pay for Indian goods. The demand for textiles, spices, and other products drove this trade, with Indian exports dominating Asian markets.
Mining and Precious Gems
The Golconda region was famous for its diamond mines, producing legendary gems like the Koh-i-Noor and the Hope Diamond. The Mughal Empire controlled these mines, and diamond trading became a lucrative business. Mir Jumla, a prominent diamond trader, established a vast network for trading precious stones.
Industrial Manufacturing
Up until 1750, India produced about 25% of the world’s industrial output. Key industries included textiles, shipbuilding, and steel manufacturing. Processed goods such as cotton textiles, silk, and metalware were in high demand globally, contributing to the Mughal economy.
Cash Crops and Export
The Mughal Empire’s focus on cash crops like cotton and opium allowed it to dominate international trade. The demand for these products in Europe and Asia drove exports, with Bengal being a major supplier of textiles and silk. The empire’s agricultural policies supported this export-driven economy.
Technological Innovations
Technological advancements during the Mughal era included innovations in cotton production and shipbuilding. The incorporation of the crank handle in cotton gins and the use of worm gear rollers improved efficiency in textile manufacturing. These innovations laid the groundwork for future advancements.
Urban-Rural Dynamics
The Mughal labour force was predominantly rural, with 82% engaged in agriculture. Urban areas contributed to economic output, reflecting a dual economy. The growth of cities and trade centres facilitated economic interactions and cultural exchanges.
Wages and Living Standards
Grain wages in Mughal India were comparable to those in England during the 16th and 17th centuries. However, by the 18th century, wages fell behind. Despite this, per-capita income, particularly in terms of wheat, was higher than in early 20th-century British India.
Social Structure and Labour
Mughal society displayed a generally tolerant attitude towards manual labour. While slavery existed, it was primarily limited to household servants. The empire recognised the importance of skilled labour, and some religious groups elevated the status of manual workers.
Impact on Global Economy
Mughal Indily influenced the global economy, particularly through its textile and agricultural exports. The empire’s products were integral to international trade networks, connecting South Asia with Europe and beyond. Indian textiles became a staple in global markets.
Legacy of the Mughal Economy
The economic achievements of the Mughal Empire laid the foundation for future developments in South Asia. Its sophisticated infrastructure, agricultural policies, and manufacturing capabilities contributed to a legacy of prosperity that would influence the region for centuries. The empire’s focus on trade and industry established India as a key player in the global economy during its height.
