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Impact of Europeans on India’s foreign trade

During the period of 1500-1800, Asian commodities flooded into the West. As well as spices and tea, they included silks, cottons, porcelains and other luxury goods.

Since few European products could be successfully sold in bulk in Asian markets, these imports were paid for with silver. The resulting currency drain encouraged Europeans to imitate the goods they so admired.

In Asia, there was no comparable mass importation of western goods. However, there was a great fascination with European scientific and artistic technologies. These influenced local lifestyles and inspired Asian scholars, artists and craftsmen.

The East occupied an important place in the western imagination. The reverse was also true. European objects and artefacts, sometimes reworked to suit Asian lifestyles, created a corresponding vision of a mysterious and exotic West.

When the Portuguese arrived in Asia they encountered a sophisticated trading network centred on cosmopolitan ports. Here they found luxury goods from throughout Asia, produced by specialist workshops specifically for different markets. These goods had immediate appeal for Europeans, who began commissioning pieces suited to western tastes.

Asian craftsmen were remarkably adept at interpreting western designs and applying traditional techniques to new forms. In the 18th century, European trading companies capitalised on these skills and developed a mass market for Asian commodities in Europe.

The appeal of these objects was so strong that attempts were made to imitate them in the West. The vogue for Asian goods inspired the creation of a distinctive oriental style, Chinoiserie.

Asia was not a natural market for western luxury goods, which were often unsuited to the climate and lifestyle. However, western scientific technology did have a great impact.

Asian rulers and scholars developed a keen interest in European medicine, astronomy and cartography. Glassware, mirrors and precision instruments such as clocks were highly prized and transformed many aspects of Asian life. Such western goods were also copied locally, with modifications to suit Asian tastes and needs. The influence of western military technology was also particularly significant.

Different Asian cultures also developed an appreciation for western aesthetics. Artists found that western painting offered them a new way of representing the world, while patrons in India and China occasionally commissioned fantasy buildings in European styles.

In the late 18th century any uncertainty that existed about the position of Europeans in Asia evaporated. The British solved the trade imbalance with China by flooding the country with Indian opium, damaging both the economy and the health of the people. The tensions that this inevitably created led to the Opium Wars, which sealed western economic dominance of East Asia.

In India, the collapse of the Mughal empire created a power vacuum that was filled by the East India Company. Its administrative and military machine gradually reshaped the subcontinent to suit British priorities. After the defeat of Tipu Sultan in 1799, British control of the subcontinent was assured. With this, the character of the European presence in Asia changed and rigid assumptions of East and West began to replace the more fluid boundaries between different cultures.

Changes in the Organisation of Trade

Trade played a more central role in the mercantilist period of European history from 1500 to 1750 – sometimes referred to as early capitalism or trade capitalism – than in almost any other period.

During the 16th and early 17th centuries were periods of strong commercial growth. Conversely, the second half of the 17th century and the first half of the 18th century must be viewed as phases of weaker or stagnating economic growth in Europe.

Growth was clearly driven by maritime expansion . Those who controlled the ocean had a position of hegemony in intercontinental mercantilist trade.

From the 17th century, the trade in goods with regions outside of Europe grew as a result of the emergence of Dutch and British colonial trade. However, this could not fully compensate for the decrease in trade over land during the periods of weakness.

In general, trade and economic development now occurred primarily in the central ports and their surrounding regions along the coasts of the European mainland.16 It is in this context that some speak of the “économie du pourtour”, or the economy of the surrounding area, which refers to a particular economic region – for example, the Mediterranean – and its specific development.

In the two periods of weak European growth, growth in maritime trade in the overseas regions was not particularly spectacular either. On the contrary, during the great depression in the 14th and 15th centuries, the conquests of the Turks and, in particular, the Mongol Tatars deprived European trade of access to important markets in the Levant.

During the second period of weak economic growth in the late 17th and early 18th centuries, European overseas trade did not begin to expand significantly again until after the Portuguese-Spanish colonial empire had been replaced by the Dutch-British empire. This involved a certain shift of geographical focus, but it was essentially based on simple trade and exchange at garrisons and coastal bases, as well as plantation agriculture, which bore characteristics of slash-and-burn economics. In other words, colonial  expansion also remained an économie du pourtour.

European industrialization lead to a rapid increase in demand for agricultural and industrial raw materials as well as for other goods, and it made the provision of quicker, cheaper and more efficient means of transportation and communication necessary.

The population of Asia in 1500 was five times as big as that of Western Europe (284 million compared with 57 million), and the ratio was about the same in 1600. It was a very large market with a network of Asian traders operating between East Africa and India, and from Eastern India to Indonesia. East of the straits of Malacca, trade was dominated by China. Indian ships were not sturdy enough to withstand the typhoons of the China sea, and not adequately armed to deal with pirate activity off the China coast.

The Portuguese displaced Asian traders who had supplied spices to Red Sea and Persian Gulf ports for onward sale to Venetian, Genoese and Catalan traders. But this was only a fraction, perhaps a quarter, of Asian trade in one group of commodities. In addition there was trade within Asian waters in textiles, porcelain, precious metals, carpets, perfume, jewellery, horses, timber, salt, raw silk, gold, silver, medicinal herbs and many other commodities.

Hence, the spice trade was not the only trading opportunity for the Portuguese, or for the other later European traders (Dutch, British, French and others) who followed. Silk and porcelain played an increased role, and in the seventeenth and eighteenth centuries, cotton textiles and tea became very important. There were possibilities of participating in intra–Asian trade as well. In the 1550s to the 1630s this kind of trade between China and Japan was a particularly profitable source of income for Portugal.

Asian merchants were familiar with the seasonal wind patterns and problems of the Indian Ocean, there were experienced pilots, scientific works on astronomy and navigation, and navigational instruments not greatly inferior to those of the Portuguese.

From East Africa to Malacca (on the narrow straits between Sumatra and Malaya), Asian trade was conducted by merchant communities which operated without armed vessels or significant interference from governments. Although Southern India, where the Portuguese started their Asian trade, was ruled by the Empire of Vijayanagar, conditions in coastal trade were set by rulers of much smaller political units, who derived income by offering protection and marketing opportunities to traders.

The income of the rulers of Vijayanagar and later the Moghul Empire was derived from land taxes, and they had no significant financial interest in foreign trade activities.

Asian merchants operated in mutually interactive community networks with ethnic, religious, family or linguistic ties and an opportunistic concentration on profit. In this respect their trading habits were not very different from those of Venetians or of Jewish traders in the Arab world of the Mediterranean. In Western Asia and the Middle East merchants were generally Arabs and Muslims, but further east they included “Gujarati vaniyas, Tamil and Telugu Chettis, Syrian Christians from Southwestern India, Chinese from Fukien and neighbouring provinces”.

If they paid for protection and market access, they found that they were free to trade. If the protection became too expensive they usually had some leeway for moving elsewhere.

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