Ancient Indian economy From 1st to 17th century

– Ishma Harshin 

Fathima Fabin 

Nishant Chaturvedi

 

Abstract

 

This research paper examines the transformation of economic structures across ancient civilization from the 1st to 17th century.The ancient Indian economy spanning from the Indus valley civilization (3300-1300 BCE) to the Mughal empire (1526-1756) was a marvel of its time. During ancient times India contributed around 25-30% to the world’s GDP, especially during the Mauryan and Gupta Empire. This vast and complex economic system was characterised by remarkable advancements in Agriculture, Trade, Commerce, Industry, Monetary system, taxation and fiscal policies. The Indus valley civilization’s urban planning and architecture facilitated thriving trade networks with merchants. The Mauryan empire introduced a centralised economic system with a robust administrative framework, standardised currency and a well organised taxation system. The Gupta Empire saw significant advancements in artisanship with Indian artisans excelling in textiles, mutual work and sculpture. The medieval period witnessed the emergence of powerful trade guilds, regulating commerce and Industry. This research paper contributes to a deeper understanding of ancient economic structure, informing contemporary economic policy and highlighting the relevance of historical context in shaping economic development.

 

 

 

Introduction

 

The Indian economy has come a long way to become one of the fastest growing economies. The economy is inextricably linked with our daily lives. In Ancient India also there was no exception. This economic trend has changed at different times. Like the reshuffle of power, the change in the course of the economy was  also noticeable. The wheel of the economy

 

was sometimes upward and sometimes downward. Sometimes the wheel of the economy was the cause of power shifting. Because the economically powerful rulers wanted to seize power by invading his neighboring states. That’s why the rulers wanted to run the economy of his state smoothly. One of the policy makers of the Ancient India like Maurya, Gupta, or whatever the period was depended on how active the economy of that period was. The issue of competence or incompetence of the rulers was also involved with that. Also the role of the common people of Ancient India was very important to keep the economy active. Since the economy of the Ancient India was mainly dependent on agriculture, the common people were more involved in it. Besides that, the foreign affairs of Ancient India were also involved with economics. The present research will be conducted to highlight those economic aspects of the Ancient India. Through which we hope to find out a clear direction of the economic situation of that time. So, how the rulers, the common people, the power and the economy have influenced each other and how important their influence is today that topic is the main thing of this research.The economy of ancient India was primarily agrarian, with agriculture being the main occupation for a majority of the population. Farmers cultivated crops such as rice, wheat, and barley, and irrigation systems were developed to support agriculture. Trade and commerce also played a crucial role in the ancient Indian economy, with the Indus Valley Civilization being one of the earliest examples of a thriving trading society.Ancient India was known for its rich resources, including precious metals like gold and gems, which attracted traders from different parts of the world. The Silk Road, an ancient trade route connecting India with Central Asia and Europe, facilitated the exchange of goods, ideas, and cultures

 

 

Indus valley civilization:

 

The Indus valley civilization evokes the urban, literate culture of the third and early second millennium BC that flourished in the area around the Indus river and its tributaries. It is the first known cities, Harappa on the banks of a dried up bed of Ravi river, an indus tributary, and mohenjo daro 570 kilometres downstream in the vicinity of the Indus river itself. This civilization included much more than the Indus zone; it was a combination of riverine lowlands that stretched to the east and South East, highland areas to the north, and the coastal wealth towards the Southwest and southeast of the Indus system. This period witnessed the first experiments in urbanism in the subcontinent. Also the inhabitants of the Indus region

 

were actively engaged in mutual trade. When urban civilization grew in towns such as Harappa and the mohenjo daro India established trading and economic relationships with Sumer, Egypt, Oman ,Bahrain and other western Asian countries. Urbanism also led to the development of excess agricultural production, which was first noted in India with the rise of trade and craft. Spices, gold and textiles were among the commodities traded. Cities with a great number of items to trade were wealthy. The growth of Commerce has an influence on communication, money, transportation and cultural systems. Spices and fragrances, valuable stones such as beryl, silks ,muslims and cotton were all in high demand in the Roman world. They all were exported from India. The silk fabrics played a significant role in Indian trade. The economy during this period was flourishing and India contributed approx 40% of the world’s economy. It was very advanced from its time.

 

Vedic times:

 

The Vedic period, spanning from 1500 BCE to 500 BCE, was characterised by a simple yet thriving economic system. At its core, the economy was driven by agriculture, with fertile river valleys nurturing crops like barley, wheat, and rice. Pastoralism also played a vital role, with cattle rearing and sheep herding providing essential resources. Craftsmanship was another pillar of the economy, with skilled artisans like blacksmiths, carpenters, and weavers contributing to the production of goods. Regional trade existed, facilitated by barter and exchange systems, although long-distance trade was limited.

The economic structure was deeply intertwined with the social hierarchy. The varna system dictated occupations, with Brahmins serving as priests and teachers, Kshatriyas as warriors and rulers, Vaishyas as merchants and traders, and Shudras as labourers and artisans.Villages were economically self-sufficient, with joint family systems and minimal external trade. The absence of a monetary system meant that barter and exchange prevailed. Economic institutions like the Grama (village council), Sabha (assembly), and Raja (king) oversaw economic activities.Taxes, known as Bali (tribute to the king) and Shulka (tax on trade), supported the ruling elite.The Vedic economy was marked by simplicity, regional self-sufficiency, and limited state intervention, reflecting the societal values and norms of the time.

 

 

Mauryan empire:

 

The age of the mauryas is a landmark in the history of ancient India. The Maurya Empire was physically extensive and the most dominant Kingdom of Indian ancient history in the reign of 322 BC to 185 BC. During this period important changes and developments affected the Indian economy. The Empire spent considerable resources on building and maintaining roads. Improved infrastructure, combined with increased security, greater uniformity of measurement and growing use of coins as currency improved trade. It is estimated that India accounted for 32% to 35% of the world economy during this time. Maurya Empire followed the perspective instructions of the master strategist Kautilya with his Arthashastra. Most of the people of the Mauryan Empire were agriculturists and lived in villages. So one of the main sources of revenue was the money coming from agriculture. The rulers were more focused on land development. This period saw the development of artisanal industries. According to Kautilya, mines and mining production were under state control. There was a superintendent of mine to oversee all mining activities, including examination of mines that had been exploited and newly discovered mines. Kautilya also mentioned that mines that could be worked without much outlay were directly developed by the state. India had considerable deposits of gold, silver, copper and other important ores and metals. The political unity and internal peace of the Mauryan dynasty encouraged the expansion of trade in India. Trade items include Indigo, medicinal sustenance, cotton as well as silk. Trade with foreign countries was carried through both lands and the sea route. Trade roads were facilitated with special arrangements like the security of the trade routes, provisions of warehouses, go-downs and other means of transport. The Mauryans had enacted roles and regulations on trade movement, including the appointment of superintendent of shipping, Mudhrayaksha to oversee overseas trade and superintendent of trade and customs to oversee overall trade regulation including the collection of duties on commodities. The development of agriculture industry and trade and Commerce under the control of the Mauryan state continued the process of urbanisation during the period. During this time India was the richest of all richest countries in the world and a large contribution to world GDP.

 

Gupta Empire:

 

During Gupta period the economic stability and prosperity facilitates all round cultural progress. Besides having agriculture as an important part, industry and trade in the Gupta Empire had a significant progress. In this time the combination of agriculture and trade made

 

the economy prosperous and advanced. The Agricultural system prospered in the Gupta economy. It was a well developed and scientific method used by the Gupta emperors to increase agricultural production. There was also the development of industry. Textile industry was an essential industry. Many products were produced in those industries and exported as well. Metal work of precious metals like gold,silver,copper,iron,bronze, led, pearl industries were also very popular. The Gupta rulers issued a large number of gold coins. In ancient India gold coins of the Gupta Empire were found more than any other Empire. They also issued silver coins. Trading activities within the Empire were carried out very smoothly and efficiently. Commercial activity flourished during the Gupta dynasty leading to a better financial system led by a Nagara shreshthi. Taxes were collected at a higher rate than usual. Printers and weavers may have been obliged to pay a tax equal to half the price of their wares.The Mauryans traded mostly with the east through Kalinga ports, the Guptas not only expanded their eastern trade but also opened up western sea-borne trade, resulting in unparalleled economic success.

 

Between the 7th and 10th centuries in northern India, trade and commerce declined, resulting in the fall of cities and urban life in religion. The collapse of the Roman Empire in the west, as well as the collapse of the Iranian Empire kingdoms, contributed to a notable shortage of gold and silver coinage in North India from the seventh to the tenth centuries. With the establishment of a powerful and widespread Arab kingdom in West Asia and Africa, the situation in north India progressively altered. India was ruled by a number of mighty kingdoms throughout this period. Western India’s Gujara Prathiharas, Eastern India’s Palas, and the Decan’s Rashtrakutas

are among them.

 

 

 

Feudalism in India, which lasted from the 7th to the 12th century, had a profound impact on the economy. The feudal economy was primarily agrarian, with agriculture serving as the backbone. Villages were self-sufficient units, producing most of their needs. Kings granted land to nobles, officers, and temples, creating a hierarchical system consisting of lords, vassals, and peasants. Peasants paid taxes in the form of produce, labour, or cash. Agricultural production was a significant aspect of the feudal economy, with crops like rice, wheat, and cotton being major staples. The development of irrigation systems, such as canals and tanks, facilitated agricultural growth. Craftsmanship also thrived, with textiles, pottery,

 

and metalwork emerging as prominent crafts. Regional trade flourished, with merchants and guilds playing crucial roles. Coinage, including gold, silver, and copper coins, was widely used. Feudalism had several drawbacks. Economic growth stagnated due to a lack of technological innovation, and the gap between rich landlords and poor peasants widened. Social and economic mobility was restricted, and the weakened central authority made India vulnerable to external invasions. International trade declined due to regionalization exacerbated economic stagnation. Regional variations existed, with North India experiencing more centralised feudalism under delhi sultanate. South India had a more decentralised feudal system under the chola,chera and pandya dynasties. Agricultural production increased by 20-30% during 8th-10th centuries , while craftsmanship accounted for 10-15% of India’s GDP during feudalism

 

 

Imperial Cholas:

 

The Cholas were the first dynasty who tried to bring the entire south India under a common rule and to a great extent succeeded in their efforts. During the period of the Imperial Cholas trade was highly developed and the economy of the Chola kingdom seemed to be well advanced. This period when the barter system was prevalent, the Chola coins were received with high expectation by the people who brought materials from abroad. The Chola coins were mostly gold coins and in turn for the goods they supplied they received gold coins. The Chola coin had a weight of 5 grams. South India exported textiles, spices, drugs, jewels, ivory, horn, ebony and camphor, elephants, cardamom, cotton, textile were exported. Arabian horses were imported. Mahabalipuram, Kavirippumpattinam, and Korkai were Chola ports which were useful for foreign trade.The Cholas established connections throughout southern India. They then connected Sri Lanka, Southeast Asia, and possibly China in the north to the trade network. The Cholas, who rose to prominence in the 10th century A.D., gave a huge boost to international trade. Merchant guilds such as Manigramam, Nanadesis, and Ainnurruvar took part in sea-borne trade that stretched from the Persian Gulf in the west to Indonesia and China in the east. Trading expeditions were sent by the Chola emperors to China.The Chola rulers contributed more for the development of industries. Metal in and utensils were made in gold, silver, bronze, copper, brass etc., The art of jewellery was famous. Gold and pearl were used in making jewels and ornaments. Kanchipuram was an important centre of textile industry.The metal industries and the jewellers, art had reached a

 

high state of perfection. Household utensils made of metal were apparently confined to the rich, earthenware being often mentioned in connection with cooking and eating in sales, charitable feeding halls.The Chola emperor encouraged economic organisation and individual enterprises. The liberal taxation policies of King Kulothunga I encouraged both internal and foreign trade. Internal and foreign trade led to the economic, cultural and religious developments in Chola territory.Under the patronage of Chola rulers, trade and commerce blossomed.

 

 

Delhi sultanate:

 

The establishment of Delhi sultanate that started in the thirteenth century and its continued existence until the beginning of the sixteenth century was a period of continuous series of political, economic and social changes and gradual developments throughout the Indian sub-continent. During this time period, the main occupation of the people was agriculture. Although the methods adopted by people of agriculture were old and traditional, the land was cultivated during that period. So there was excessive production of harvests.Wheat, rice, sugarcane, and cotton were the chief crops. During the sixteenth century, the production of potato and tobacco started on a large scale. During the Delhi sultanate period, Bengal was famous for cotton, Allahabad and Sirsa were popular for the production of rice, and Firozabad was known for wheat. Firoz Shah Tughlaq is primarily known for the encouragement of agriculture.The farmers were dependent largely on rain for the production of crops.wells and rivers were also the sources of water for crops. During the Delhi sultanate period, there was excessive production of the crops which was used not only for fulfilling the needs of the people but also for export to other regions. But the condition of farmers was very miserable. Industry was the second occupation of the people during the

sultanate period. Generally, two types of industries were prevalent : first, those which were under the control of government which were run to fulfil the needs of sultan.second type of industries were run by the people themselves and were under their control.Textile industry was the most famous industry during this period where cotton, silk and woollen clothes were produced. At that time, the production of cotton was in abundance in India. At that time, the production of supreme quality clothes was at its peak in India. Bengal and Gujrat were the famous centres of cloth at that time. Apart from textile industry, metal industry, leather industry, sugar industry, paper industry were there at that period. this period also witnessed

 

rise in the field of trade and commerce. During the sultanate period, the most important centres of trade and commerce include Delhi, Lahore, Mulatan, Devgiri, Calicutt and Vijaynagar. The people belonging to Marwari, Gujraji, Multani and Chetty communities were the leading among the tradesmen and commerce. The Sultans of Delhi encouraged the trade and commerce of the day by making inns and roads as well as made these ways safe from robbers and thieves. Foreign trade and commerce was carried by two ways. In that

period, India had its trade and commerce with the countries like Burma, China, Nepal, Afghanistan, Java and Sumatra. The export of the country was more than import during the sultanate period. The Delhi Sultanate period, did not appropriate a comprehensive economic policy with the object of promoting the material condition of the people in general, yet the volume of trade, both internal and external, carried out by the people of the country, was enormous. During this period, India also got prosperity in the field of technological development.

 

 

Pandyas:

 

The merchant’s guilds were very powerful organisations in medieval times in the Pandya region .With the growth of the commercial enterprise, trade began to assume certain fixed forms and passed through many stages of development. In this process, production was earmarked for some definite markets.In markets, trade became a permanent feature. Trade plays a significant and permanent role in economic history. Moreover, the traders of Tamil country had both the knowledge of navigation and land routes. They maintained close commercial contacts with outside countries like Egypt, Rome, the Middle East, the Far East and Southeast Asia. Favourable overseas trade was a still and important source of the country’s wealth. The overseas commerce which flourished under the Cholas was continued by the Pandyas. In medieval times, Ayyavole or Ainnurruvar, Nanadesis, Nagarattar, Disai Ayirattainnurruvar, Manigramattar, Anjuvanam, Chitrameli Periyanattar and valanjiyar were some of the merchant guilds. These guilds were involved in overseas trade from the sixth to fourteenth century A.D.They played a vital role in the multipurpose activities of trade and commerce. They also played a prominent role in matters concerning social, religious, administrative and judicial affairs of the country. They acted as trustees of both the rulers and ruled. They received endowments of money from the rulers. They built and maintained charity houses, temples and tanks for the welfare of the people.

 

 

The Mughal Empire:

 

The Mughal Empire, from 1526 to 1756, witnessed remarkable economic growth driven by agriculture, industry, and trade. Efficient administration and a standardised currency, the rupee, supported this growth. Agriculture formed the backbone of the economy, producing wheat, rice, cotton, and indigo, with advanced irrigation systems increasing crop yields.Industry thrived, with textiles, handicrafts, and luxury goods like silk, wool, and carpets being produced in centres like Lahore, Delhi, and Agra. Skilled artisans created intricate designs, making Mughal products highly sought after. Extensive trade networks connected the empire to Europe, Central Asia, and Southeast Asia, fostering cultural exchange.

Centralised taxation funded imperial activities, with land revenue, customs duties, and tributes collected through officials. Economic prosperity led to cultural exchange, architectural innovations like the Taj Mahal and Red Fort, literary and artistic advancements, urbanisation, and increased standards of living.The Mughal economy’s key features included efficient administration, standardised currency, thriving agriculture and industry, extensive trade networks, centralised taxation, and advanced irrigation systems. This prosperity had a lasting impact on India’s emergence as a major economic power, development of new industries and trade routes, and increased economic integration with global markets.The Mughal Empire’s economic legacy endured long after its decline, shaping India’s economic trajectory. Agricultural production increased significantly, trade volume grew substantially, and urban populations expanded. Effective governance, innovation, and strategic trade policies drove growth and prosperity, demonstrating the significance of a well-managed economy.The Mughal period’s economic achievements left a lasting legacy, influencing India’s economic development for centuries to come.

 

 

 

 

Conclusion

 

The economic structure of ancient India, spanning from the Indus Valley Civilization to the Chola and Chera dynasties, reveals a complex and dynamic system that evolved over time.

 

This research paper has examined the economic systems of six significant periods in ancient Indian history: the Indus Valley Civilization, the Vedic period, the Mauryan Empire, the Gupta Empire, the Chola and Chera dynasties and the Mughal empire.Throughout these periods, agriculture remained the backbone of the Indian economy, with the majority of the population engaged in farming and related activities. The Indus Valley Civilization’s sophisticated irrigation systems and the Mauryan Empire’s land revenue policies demonstrate the importance of agricultural management. Trade and commerce played a vital role in ancient India’s economic growth, with extensive networks connecting the subcontinent to Central Asia, Southeast Asia, and the Mediterranean. The Gupta Empire’s maritime trade and the Mughal Empire’s establishment of trade routes with Europe exemplify the significance of international trade. The Vedic period’s varna system and the Mauryan Empire’s guilds demonstrate the organisation of labour and the emergence of specialised crafts. The Chola and Chera dynasties’ temple-based economies highlight the interplay between religion and economics. The Mughal Empire’s standardised currency, the rupee, and the Gupta Empire’s gold coins illustrate the development of monetary systems. The Mauryan Empire’s centralised taxation and the Chola and Chera dynasties’ decentralised systems reveal varying approaches to revenue collection.

This research has also underscored the impact of political stability, technological advancements, and cultural exchange on economic growth. The Mauryan and Gupta Empires’ periods of relative peace and stability fostered economic prosperity, while the Mughal Empire’s military campaigns expanded trade and cultural exchange.

 

In conclusion, ancient India’s economic structure was characterised by Agriculture-based economy,Extensive trade networks,Organised labour and specialised crafts,Development of monetary systems, Varied approaches to taxation and revenue collection.Interplay between politics, technology, and culture.These features demonstrate ancient India’s significant contributions to the development of economic systems, many of which continue to influence contemporary economic thought.

 

 

 

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