Merchant Capital and Market Integration: Reassessing India’s Commercial Economy in Pre-Colonial Period
N. Dhaivamsam
Associate professor in History, Periyar Arts College, Cuddalore, Tamil Nadu, India.
The present study explores the structure and evolution of India’s trading economy during the seventeenth and early eighteenth centuries, focusing on the networks of inland and maritime commerce that connected production centres, market towns, and port cities. It investigates the roles of indigenous merchant groups such as the Banias, sarrafs, Chettys, and Armenians, who were actively engaged in brokerage, credit provision, and long-distance trade. The study describes how the Mughal state’s cash-based revenue system encouraged monetisation, supported by the operations of moneychangers and the circulation of hundis as instruments of financial transfer. Port cities like Surat, Masulipatnam, and Hugli served as critical links between the internal economy and Indian Ocean trade routes. Textile production, banking practices, and merchant shipping operated through decentralised systems involving caste-based artisans, credit arrangements, and shipping finance. The article argues that India possessed a vibrant commercial economy sustained by merchant capital and financial infrastructure. However, its dependence on the agrarian surplus and Mughal administrative order limited autonomous industrial growth. The collapse of political stability and the expansion of British colonial interests in the eighteenth century disrupted these networks and led to a long-term transformation of India’s economic landscape.
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