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History - Trade & Commerce in ancient India

Metallurgy is as old as pre-historic times. Mining of metals was known even in pre-Vedic period and during the Harappa period various metals like cop-per, lead, silver were in use.

During Vedic period, metal (ayas) was chiefly of two kinds—krishna ayas (black metal or iron) used during later Vedic period and loh ayas (copper).

The Jatakas refer to eighteen important handicrafts and industries.

The Vaishyas developed institu-tions like Sreni, Nigama and Puga to regu-late trade and avoid intrusion by other varnas and develop monopoly.

Proper rules of conduct of trade were laid by the head of trade guilds, known as Sarthavaha or Srenipramukha. The rules were called Samay and Srenidharma.

Taxila, Pushkalavati, Kapisa and Vidisha prospered as trade centres, under the Indo-Greek rulers.

Kautilya asked the king to develop measures to stop obstruction of the trade routes by his favourite men (vallabhas). Frontier guards (Antapalas) were also appointed.

The close contacts between the commercial classes and the king’s court is very clear from the rules of the settlement layout of the historic city of Patliputra. Here, people lived in various parts, according to their social status.

Kautilya looked upon artisans and traders as big thieves and held them under suspect. He demanded strict con-trol over them, as also with the often indisciplined frontier guards (antapalas).

Guilds of merchants were proper-ly registered and even served as banks.

During Mauryas, most important trade route was from Taxila to Patliputra.

Ships in ancient period were usually of the two-masted type. In the 2nd century A.D., a regular sea-route was in operation for the quest for gold (swarna).

Monsoons (Arabic: Mausam) were discovered by Hippalus (Greek captain) and this discovery in 45 A.D. that mon-soons could sail ships from Alexandria to Western India in just a 40-days period, tremendously increased the Roman sea-trade, due to shortening of trade-route.

Muziris (Cranganore, Kerala) and Puhar (in Cholamandalam) were major sea-ports and foreign settlements.

Among land-routes, the silk-route was very often in use till Kushan period. Later period saw it becomming unsafe, due to robbers.

The Periplus of Erythrean Sea is a travellers’ handbook (Erythrean Sea—Red sea). It mentions more than 20 trade ports like: Barygaza (Broach), Suppara (Soparal), Kalliena (Kalyana), Muziris (Pondicherry), Soptama (Madras), Puhar (Orissa), Masalia (Masulipatnam).

The important exports from India were: Fine textiles from Varanasi, Malabathrum (spicy leaves) from Tamralipti (Tamluk, R. Ganges, Bengal), muslins (Pondicherry), pepper (Muziris), ivory (Puhar, Orissa).

Pepper was a very valuable export till 13th century A.D. Marco Polo (Italy) mentions that a ship was measured by the number of pepper baskets contained in it.

Trade suffered a setback in 3rd century A.D. But in the 4th century A.D., silk trade increased and silk was brought within reach of the common man. The decline in the westward trade towards the 2nd-3rd century A.D. was later compen-sated for by the prospering trade now developed with the south-east Asian States like the Suvarnabhumi, Kambuja (Kampuchea), Champa (Annam).

During Guptas, there was no material change in the previous trade-routes, trade practices, organisation, cur-rency system, etc. The one note-worthy change was a decline in the Roman trade and the three major ports of Muziris, Arikamedu and Kaveripattinam.

In his plays, Kalidas potraits a good view of the town markets and trade transactions. The internal trade now expanded to several inland trade centres.

Roman emperor Aurelian declared Indian silk to be its worth in gold. Indians acted as intermediaries to the Chinese silk trade and the Western States.

Among spices, pepper always held the first place and was declared passion of the Yavanas (Romans).

The demand for Roman goods was smaller than that of Indian goods abroad and it suffered an adverse trade balance of trade. To make up this balance, the Romans supplied gold and silver coins to India. This ever-increasing drain of wealth was once complained by the emperor Tiberious (22 A.D.). The author Pliny also laments such losses.

The Kushanas remoulded the Roman coins so that they could be used as currency.
Among imports, there were singing boys, virgins for the rulers’ harem, slaves and valuable corals (Mediterranean Red Variety), dates, Italian vases and wines, sweet clovers, glass, tin (Spain), emeralds, etc.

The Divyavadana refers to the science of testing gems. The merchants’ sons were trained in 64 Angavidyas or finearts, according to Vatsyayana.

Rome, the Chief importer of Indian muslin, once banned it, due to the rising loss of morals of its females.

Narada, Katyayana and Brihaspati gave specific instructions towards the rights and duties of guild members, in their smritis. Gupta sites of Basarh (Vaisali) and Bhita (Allahabad) bear the names Nigama and Sreni Sarthavaha Kulika Nigama at Vaisali.

India obtained brass, lead and gold from foreigners, whereas Indian iron and steel (saikya ayas) was very advanced in quality and was exported.

Milindpanho mentions 75 trades, 60 related to crafts, 8 to metals.

Charaksamhita (on Indian tradi-tional medicine and surgery) recommends the use of saikya ayas for operations.

Nasik cave inscription tells that srenis often acted as law providers also. (Sresthis, are now called as Seths, Settis in South India and also Chettiyars).

Rate of interest fluctuated greatly, but was usually near 15% (higher for loans for sea-trade).
The common coins were: Nishka and Pala of Gold, Shatmana of silver, Kakini of copper and brass. The most common coin Karshapana was made of various metals.

The major source of revenue for Guptas was land revenue.

Textiles formed a major industry in this period. Rock cutting also evolved as another important occupation due to the rapid rise in use of statues for prayers.

India imported horses from Arabia, Iran and Bactria.

Ujjain was the most flourishing trade centre in and around the Gupta period.

Agrarian Structure in Post-Gupta period
A lot of confusion about agrarian structure of post-Gupta period exists, due to the contradictory picture provided by several Smriti writers and other sources.

There were several land grants, both secular and religious in nature. The secular grants were mostly towards the high officials while religious grants were towards the Brahmins and the temples.

The practice of land grants finally developed feudalism. The peasant, who was initially free was now under severe burden. There were several intermediate classes of land owners.

There was an increase in the forced labour, Vishti, due to the emergence of a “landed aristocratic class”.

The peasants were mostly sudras. In fact, peasants were thought of as sudras.

All land was supposed to be under the State ownership, but in practice individuals were owners of land.

Various categories of ownerships existed, like Sakta (land owned by indi-viduals), Prakrsta (tilled by certain individuals), Kaustambakshetra (fields owned by cultivators themselves).

In a few land grants, villages are described as also carrying with them the right towards all traders living in it. The grants were rent-free.

Aprada, Sasana, Chaturvaiya-grama, Brahmadeya, etc are names of land grants. The rights were hereditary.

The Kashmiri ruler Shankaravar-man used to usurp lands from grant holders.

During Harsha, cash payments were usually for military services only.

Agrahara land was granted only to brahmins.

Social Changes
Rig Vedic society was chiefly pas-toral and semi-nomadic. Their chief wealth was the gau (cow) and a wealthy person was called gomat, the king or head was called gopati or gopa.

Vedic society in early period had no such serving class like the shudras.

Early literature of the Buddhists provides a picture of a settled agricultural economy and an emerging commerce in urban centres.

Mauryas saw a tremendous increase in trade.

The Gupta period saw changes in agrarian structure due to system of land grants.

Varna Samkara denotes mixed castes, considered ritually impure, includ-ed tribes or descendants of intercaste marriages.

A child born out of brahmin and vaishya combination was called ambastha and that of brahmin and sudra as nisada, vaishya and sudra as ugra, brahmin and sudra as parsava.

In the later vedic period, there were as many as 17 kinds of priests look-ing into various sacrifices. The Brahmin was one such priest, who gradually sur-passed them and became their representative.

Besides the four varnas, there was a Panchamvarna (5th varna), comprising the untouchables.

The principal tax-payers were the vaishyas.

The social transformation of vaishya and sudras was under crisis in the 3rd century A.D., due to refusal to stick to their occupations and pay taxes. The prac-tice of land grants was started by a few rulers to relax the tax collections, now entrusted to grant holders.

The term Rajanya, existing in liter-ary sources as well as in coins, signifies kshatriyas.
In the Buddhist texts, the social order is denoted as: kshatriya, brahmin, vaishya and sudra (i.e. brahmins at 2nd place, not first). Vaishyas are called graha-patis or householders.

The samskaras were important religious sacraments for the human body. They are generally 16 in number.

There are eight forms of marriage, according to the Dharmasastras. The approved ones are: Brahma, Prajapatya, Daiva and Arsa. Divorce was severely con-demned. The unapproved ones were: asura, paisacha, rakshasa and gandharva (love marriage). Re-marriage was allowed by the Brahmanical law givers as well as by Kautilya.

Polygamy was generally practiced by the socially upper classes.

Intercaste marriages were gener-ally in Anuloma system (marriage of high caste male with low caste female).

There were several mixed castes also, arising out of tribals and foreigners.

The asura form of marriage (marriage by purchase) was quite preva-lent, even though not approved by the shastras.

The position of women declined during the pre-Gupta and Gupta times and further more in later periods.

The use of veils (purdah) by women can be noticed near Harsha’s times (his sister Rajyasri used it) and increased during the advent of Muslims.

Some smritis encourage the prac-tice of sati. The first definite historical inci-dent of sati is recorded in 510 A.D., in the case of wife of Goparaja (a general of Bhanu Gupta). It existed mostly in Deccan and Central India.

Smritis recommend an austere life for widows. The skanda purana advocates the shaving of heads of widows.

During post-Gupta period, Vaishnava Dharma was prevalent in India. Lalitaditya of Kashmir, Sens of Bengal, Chandels and Chauhans were mostly Vaishnavites. However, the epicentre of Vaisnavism was the Tamil region.

Alwar saints brought the worship of Vishnu to new heights, mainly in the 9th and 10th centuries. Two famous female Alwar saints were Andal and Namallalwar.

Among Hindus, Shaivites were most numerous. The Pala rulers of Bengal were Buddhists, but their inscriptions begin with Om Namah Shivaya.

Ganesha became a popular deity of the Hindus in the 10th century A.D., especially in the western States, where Ganapati cult arose and held Ganesha as higher than other deities. Ganesha Chaturthi celebrations (mentioned in Agni Purana) are believed to originate somewhere around 9-10th century A.D.

Huen Tsang, speaks of a flourish-ing Buddhist faith, even in the 7th century A.D., besides other faiths, especially in U.P., Bihar and Bengal.

The Kayastha caste was also born somewhere during Gupta period. They were usually scribes under State service. First mention of Kayasthas is made by Yajyavalkya. During Guptas, they existed only as a social class and later they got converted into a caste.

Antayajas were a class of people living outside the town, as they were con-sidered untouchables. The synonym Chandala has also been used for them. They were considered even lower than the sudras.


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13.1 Introduction

13.2 Initiatives towards Constitutional Status to Local Governance

13.2.1 Features of 73rd Constitutional Amendment

13.2.2 Features of 74th Constitutional Amendment

13.2.3 Decentralised Planning in Context of 73rd and 74th Constitutional Amendment Act

13.3 Initiatives after Economic Reforms

13.4 Functioning of PRIs in Various States after 73rd Amendment

13.5 Functioning of Local Governance after 73rd and 74th Constitutional Amendment: Observations

13.6 Conclusion

13.7 Key Concepts

13.8 References and Further Reading

13.9 Activities


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• Outlines the functioning of local governance in various states after the amendment.


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