India has enviable business
history
Whenever we think of the Indian economy during the ancient
periods, most of us tend to think of it as a purely agriculture- based one, with
crafts and little manufacturing at the village levels. Business does not come
to our minds. But in reality, India had a very rich tradition in business and she
remained well-known across the world for her international trade from the earliest
periods.
India’s involvement in business with other countries started
several centuries ago. Experts cite evidences to show that India was engaged in
international business even before ten thousand years and earlier. Santosh
Kumar Das quotes the words of Kennedy to underline the significance of India in
international trade: “Maritime commerce between India and Babylon flourished in
the 7th and 6th but more specifically in the 6th
century BC.”
There were exclusive commercial cities and trade
centres that were developed more than five thousand years back. Agarwala notes:
“Commercial cities like Harappa and Mohenjodaro were founded in the fourth and
third millennium BC. Trade centres had also come up in western India in the
fourth and third millennium BC resulting in the domination of Indian society by
merchants; these people were instrumental in bringing about the first
mercantile revolution. India thus became a great exporting country.” Over the centuries many leading commercial
cities such as Taxila, Pataliputra, Mathura, Peshwar, Varanasi, Ujjain, Kanchi,
Madurai, Kaveripattinam and Broach emerged during the ancient period.
It is important to note that businesses were organized
in different forms several centuries before the Common Era. Apart from the
individual and family-based businesses, there were many forms of organizations
with some of them resembling partnerships and modern western corporations. Vedic
literature and the Mahabharata make
references to them. Khanna notes: “The corporate form (e.g.,
the sreni) was being used in India from at least 800 B.C., and perhaps
even earlier, and was in more or less continuous use since then until the
advent of the Islamic invasions around 1000 A.D. This provides evidence for the
use of the corporate form centuries before the earliest Roman proto-corporations.
In fact, the use of the sreni in Ancient India was widespread…...
Moreover, when we examine how these entities were structured, governed and
regulated we find that they bear many similarities to corporations and, indeed,
to modern US corporations.”
Indians
devised native systems to develop business. Take for example, guilds. Historians note that guilds began during the
early Buddhist period and then continued onwards. Guilds were unique types of
associations promoted by merchants or persons belonging to specific crafts. Thus
one could see references to the guilds of potters, weavers etc., Guilds were
primarily organized to protect and promote the interests of their members and
to represent their views. They framed rules and regulations for their members
and functioned as self-regulatory organizations. Guilds were also functioning
as training institutes turning out technically qualified people for different
vocations. Another example could be Hundi. It was an indigenous financial
mechanism developed by ancient Indians, similar to the modern day negotiable
instruments. It was used to transfer money without actually carrying the cash
and to raise short term credit payable at other places.
Ancient
India recognised trade as one of the three most important activities of the
economy. Arthashastra discusses different aspects relating to trade in
detail. Kautilya created exclusive departments to deal with matters relating to
trade, such as Shipping, Ports and Harbour, Customs and Octroi, each under a separate
Head in the administrative machinery. Besides, there was a special department
to look after the trading activities of the state.
Roman trade commenced around the beginning of the Common Era. Greek
historian Strabo notes that by the time of Augustus, up to 120 ships set sail
every year from the Roman Egyptian port on the Red Sea to India. The findings of the Roman coins in India,
especially in the south, reveal the extent of trade with them. Maritime trade
was fully maintained with the outside world during the Gupta period. Santosh Kumar Das notes: “….. Indian traders
carried the torch of civilization into the hearts of the people of Java, Pegu,
Cambodia, Siam, China and even Japan. The conquest of West India by
Chandragupta II brought the Gangetic provinces into direct communication with
the western ports especially those of Gujrat and so with Alexandria and Europe.
Trade also followed the land route through Persia.”
The states took it as their primary responsibility to create all the
necessary facilities, for inland and foreign trades, and provide a conducive environment
for the growth of business. In Mahabharata
Bhishma reiterates the role of the King towards trade to Yudhistra through the
question: “Have you ensured that the traders in the country, who have to pass
through many difficult terrains in order to exchange goods at high and low
prices, are never put to troubles under the burden of oppressive exactions?” We
see the Indian rulers taking various steps to promote trade, with the active
involvement of the society. As a result, in the words of Agarwala: “In ancient
times both the internal and external trades were at their peak.”
The disturbances caused by frequent invasions and the resultant
difficulties in governance did not appear to have affected the business sector
significantly and the country continued to maintain its supremacy. Agarwala notes:
“During the period of Delhi Sultanate, which extended from the closing
years of the twelfth century to the founding of the Mughal Empire in 1526, the
economic activities in cities continued to flourish despite the decay of the
ancient self- governing village assemblies. Ibn Battutah, during his travels from
1333 to 1346, found great cities with rich markets in the Upper Gangetic
Valley, in Malwa and Gujarat in the Deccan and in Bengal as well as in the
Malabar region in the extreme south. He found the ports of Quilon and Calicut
in Malabar comparable with Alexandria in Egypt, Sudak in the Crimea and Zatyun
in China in terms of their significance and quantum of trade handled by them.”
But the entry
of the East India Company and the colonial rule that followed altered the face
of Indian business completely during the subsequent periods. The country witnessed
a drastic decline in business at the domestic and global levels. Agarwala notes
that during 1813, Calcutta was exporting two million pound sterling worth of
cotton goods to London. But in 1830, India was importing two million pound
sterling worth of British cotton manufactures.
The British designed and implemented policies in the
name of free trade to decimate India. Montgomery Martin, who wrote on the British
colonies, noted: “Indian suffered most unjustly in her trade, not merely with
England but with all other countries, by reason of the outcry for free trade on
the part of England without permitting India to free trade herself.” Jawaharlal Nehru observed that the British trade
with India was nothing but loot. “It was a purely loot. The ‘Pagoda Tree’ was
shaken again and again …… This process was called trade later on but that made
little difference. Government called this so-called trade, but trade was a
plunder. There are few instances in history of anything like it.”
Thus the glorious innings of India as a business power,
a very long one indeed, came to an end. But we have to remember that India has
an enviable record, a history, in business.
References:
Agarwala, P.N., A Comprehensive History of Business in India, Tata-McGraw-Hill
Publishing Co. Ltd., New Delhi, 2001
Khanna,
Vikaramaditya, S., ‘ The Economic History of Corporate Form in Ancient India’,
1997.
Nehru,
Jawaharlal, Discovery of India,
Penguin, New Delhi, 2004
Santosh
Kumar Das, The Economic History of
Ancient India, Vorah Publishers & Distributors Ltd., Allahabad, 1980
( Published in Yuva Bharati, Vol.39, No.11, Chennai, June
2012)
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