HomeEuropean Commercial Enterprise in Pre-Colonial India:
The New Cambridge History of India
By Om PrakashTrading Fortunes
By Niraja Rao
The Hindu
Sunday, September 20, 1998
European Commercial Enterprise in Pre-Colonial India The New Cambridge History of India. Om Prakash, Cambridge University Press. Special Price for India Rs. 995.
The stage is set for Circa 1500. Mogul India is at the heart of a flourishing Arab trade between Asia and the Mediterranean through the Persian Gulf and the Red Sea. White rice, sugar, textiles, pepper, ginger and iron are traded for copper, gold and horses from Persia and Arabia. The world's oldest territorial state, Portugal, had recently discovered a new route to enter this world. Vasco da Gama burst through the Cape of Good Hope looking for ``Christians and Spices'' and landed at Calicut on May 20, 1498.
Om Prakash chronicles the fortunes of the Portuguese, the Dutch and the English in India between the 16th and 18th Centuries. The Danes and the French are also dealt with, but as minor participants in the India trade.
The old water-land route via the Levant was replaced by an all water route. The Portuguese, having discovered it, created a monopoly with Papal sanction. Asian ships were forced to carry a safe conduct pass, Cartaz, call only at Portuguese controlled ports and after the establishment of Portuguese custom houses, to pay customs duties before proceeding on the voyage. West African gold and from 1570 American Silver rials, non-precious metals like copper, lead, tin and other goods like coral, wines, olive oil and even fine textiles like taffetas, damasks and silks were exchanged primarily for pepper. The biggest disappointment however in an otherwise comprehensive chapter is the absolute silence on the disapperance of the dynamic Arab merchants.
From the early 16th Century, with help from the Tamil keling merchants settled in Malacca, the Portuguese became a part of the vibrant and complex intra _ Asian trade. Southeast Asia exported spices including cloves, nutmeg, mace and pepper which were collected at Malacca and then re-exported to different destinations in the Indian Ocean. From China came porcelain, silk and lacquer while Japan primarily exported gold. Indian textiles seem to have been the most important item of trade, functioning even as a currency in some of the treaties the Portuguese signed with the suppliers of spices. The Indian merchants, mainly the Gujrati Muslim merchants, operating the intra-Asian trade network, seem to have adjusted well to the challenge of the Portuguese. When faced with elimination from the Pulicat-Malacca route, these merchants created an alternative anti-Portuguese network in the Bay of Bengal. Masulipatnam, under Ibrahim-Qutb Shah, replaced Pulicat as the premier port on the Coromandel coast. In exchange for Coromandel textiles and rice, Acheh in Indonesia provided horses and elephants and South East Asian pepper and spices.
By the 17th Century, the Portuguese were seriously challenged by the Dutch East India Company (VOC). By 1643 the Dutch had gained control of the Spice islands and procured pepper at extremely low prices, ensuring a gross profit of almost 1,000 per cent. Since the nature of trade had not changed and India would accept only bullion in exchange for pepper, the Dutch had to look towards the intra-Asian trade for finance. Coromandel textiles sold well in south east Asia so the Dutch established four factories on the Coromandel coast between 1606 and 1610. In 1618, a factory was set up at Surat and within the year at Cambay, Broach and Agra. In the meanwhile, Persia and Japan were seen as Asian sources of precious metals. A factory was established at Hirado in south western Japan in 1609. Japanese gold was 24.15 per cent lower than in Holland until 1636 and 35.58 per cent thereafter. Thus, until the Japanese ban on the export of gold in 1641 and silver in 1680, Japan was crucial to the Company's trading fortunes in Asia. At first, the Japanese primarily traded in Chinese raw silk and silk textiles forcing the Dutch to establish base in Taiwan. From the 1640s Bengal raw silk became a major constituent in the Dutch exports to Japan. A factory was thus established at Hooghli in 1635.
The English arrived almost simultaneously and despite hostilities with the Dutch, there was quite a lot of co-operation between the two companies. For example at Surat in 1642, the VOC director's wife's funeral was attended by all resident Europeans. The coffin was carried by four Dutch and four English Company servants and the procession included two flag carriers bearing the Dutch and English colours.
Until the 1740s the Dutch VOC was distinctly ahead of the English in terms of its overall trading operations. It was with the granting of the Diwani of Bengal to the East India Company in 1765, that the English surpassed all their European rivals reaching the incredible figure of œ69 million over the triennium 1777-79. The fortunes of the English company are well known in the subcontinent, being part of the curriculum of modern history text books but what Om Prakash's book brings out well, is the dynamics of the commercial revolution of the second half of the 18th Century. From the 1760s there was a substantive growth in the trade with Canton. Having made themselves the virtual rulers of Bengal, the British controlled the suppliers and producers of goods including the high value opium which together with Bombay cotton accounted for an enormous increase in the trade with China. In return, they managed to control the export of Chinese tea to Europe, where they out priced all the other European rivals. In time the China trade became the leading medium of remitting money home.
The book under review brings together a good amount of secondary literature on the European companies trading with Asia and together with company records provides comprehensive details regarding shipping, volume and value of goods moving between Europe and Asia and within Asia. But as often happens when statistics do the talking, you miss out on the actual events involved. The sudden and dramatic replacement of pepper by Indian textiles in the composition of India's exports to Europe, are casually explained as due to a sudden change of taste in Europe. The Industrial Revolution does not even find a mention so the question of metropolitan capital accumulation is never raised. Tables, charts and graphs can never replace the importance of people and their narratives. Mogul India remains only a distant backdrop, discussed briefly in the last chapter. The banking system and the Sarrafs (money changers), the hundi, dadni, batta and dasturri are all relevant commercial practices that should have been discussed at some length. How people reacted to trade with Europe, whether as merchants or as producers and consumers are not dealt with satisfactorily. The problem with the book then is the narrow base of historical research material used, which is surprising for a Cambridge publication.
As one studies the three centuries from 1500-1800, the most striking aspect of European commercial enterprise in India is the establishment of what is called the pre-modern multinational orgnisation, the East India Company. Such companies were typically monopolistic towards their competitors and ``treated supply as the crucial variable that had to be controlled, even as demand was seen as a more or less given factor which varied according to a known random function.'' Therefore political power was necessary as well as profitable. It is perhaps ironic that while historians refer to this period as India's integration into the modern world economy, liberal economists even today are calling for India's need to integrate with it.
Copyright © 1998 The Hindu.
Copyright © 1998 Mantra Corporation. All Rights Reserved. The information contained at this site may not be published, broadcast, rewritten or otherwise distributed, or stored without prior written authority of Mantra Corporation.