Some Reflections on the 18th Century 'Crisis' in the ...

88

■ Research Trends ■

Some Reflections on the 18th Century 'Crisis'

in the Indian Subcontinent

●

S. Arasaratnam

1

For historians of the Indian subcontinent there has been general agreement

about the nature of the 17th century, a period of political consolidation , economic expansion and achievement of an Indo-Islamic cultural synthesis . Likewise the 19th century was clearly a period of British colonial rule when the colonial state

was imposed on the subcontinent resulting in the transformation of society at a

number of levels. The 18th century, standing between these two clearly recog-

nisable eras, has been an enigma, giving rise to varied perceptions and diverse in-

terpretation as the study of Indian history advanced.

For Muslim chroniclers and writers in the Islamic tradition, the 18th century

was a period of decay and disintegration from the great heights reached under the

first six imperial Mughals. For British imperial historians, it was a century of

anarchy, a natural prolegomenon to the imposition of the British peace . The

collapse of the centralized, autocratic Mughal empire , it is asserted, brought into existence warring factions of regional power chiefs seeking to step into the vacuum

created in their own specific corners. Effective autocratic power was replaced by

ineffective and venal power centres waxing and waning with fluctuating fortunes .

European powers operated in this situation and were drawn into these conflicts, us-

ing and being used to secure advantage to one or the other of the interested parties .

With historic inevitability, through the struggles of the last quarter of the century,

the English East India Company emerged as the new unifying power, reducing

one by one the regional powers.

With the development of critical historical writing in the Indian subcontinent

after independence, there was no obvious need to change these perceptions. Crit-

ical empirical studies, based on contemporary evidence, appeared to agree with

S. Arasaratnam, University of New England.

Some Reflections on the 18th Century ' Crisis ' in the Indian Subcontinent 89

the overall view of a centralized, consolidated imperial system gradually weakening

from the end of the 17th century and quickly breaking apart in the first decades

of the 18th. Detailed studies of various aspects of the imperial system, emanating

from Aligarh, and those of the school that was founded by the pioneering scholars,

analysed the political, military and economic structures that had been built by the

first six Emperors. The 18th century was seen as a period when these structures

fell apart and resulted in a deterioration of conditions in all spheres of activity.

As historical research advanced, the study of the process of Mughal decline be-

came more sophisticated as various hypotheses were put forward to explain the

loss of central control, the military weakness and the successful assertion of local

power. Yet these studies did not challenge the framework of decline, deteriora-tion and decay. They examined the nature of the Mughal state, its process of ex-

pansion and consolidation to explain the rapid collapse through structural weak-nesses in this process. Part of the result of their studies was to challenge existing

ideas on the centralized nature of the Mughal polity and the effectiveness of its

bureaucratic and revenue-raising arrangements.1)

In all the research on the critical highpoint and beginnings of the downward

spiral, there was no questioning of the assumption of the 17th century as a period

of growth generally and, in the commercial sphere, even of boom. Those studies

that addressed this issue specifically noted an almost dramatic collapse of the com-

mercial economy and a definite downturn in Indian overseas trade in the first

decades of the 18th century. While there was no deep investigation of the re-

gional and domestic economy, the assumption was that this decline had its natural impact in the interior and hastened the weakening of Mughal imperial structures. Das Gupta, who has written more on this aspect than most others, specifically iden-

tified this as an Asian phenomenon, partly internal subcontinental and partly

transcontinental embracing the western parts of the Asian mainland. He repu-

diated any tendency to bring the European into this process in a cause-and-effect

relationship.2)

Das Gupta drew his evidence mostly from western India but those looking at

southern India and Bengal were in general agreement, though perhaps less em-

phatically. In some parts of this eastern region, the Europeans had penetrated deep into certain commercial sectors but not so much as to initiate changes in one

direction or the other. In both these trading regions-Bengal and Coromandel-

the decline of overseas trade was confirmed and again the main causes were autoch-

thonous rather than externally induced. In all the three regions—Gujarat, Cor-omandel and Bengal-the loss of the large economic unit that the Empire had

brought into existence and the constraints on trade between port and hinterland

emerge as major factors, with a variety of specific problems confronted by each

region.

90 Journal of the Japanese Association for South Asian Studies, No. 4

The more recent trend in the historiography of this period is to reverse a num-

ber of these assumptions and propositions and force a new look at the nature of

the 18th century and at the process of decline of the Mughal Empire. It is pio-

neered by the Cambridge historian C. A. Bayly but has acquired other adherents

approaching the problem from many different angles. Bayly's work is based on

an intensive study of the Gangetic basin in the century from 1770 to 1870 but he

has projected many of these perspectives back deep into the 18th century and made

them the basis of some fundamental revision of what has come to be accepted as

the consequence of the collapse of the Mughal Empire.3) In his study of the

Gangetic valley in the last quarter of the 18th century, Bayly saw not a stagnant

and osified commercial and production system but a vibrant and even growing one in many sectors. He began to ask questions of how far back this went and con-

structed an interpretation of what happened when the central institutions of the

Empire collapsed in the first decades of the 18th century.

He saw in the 18th century the emergence of an economic order to replace the

pan-Indian economy of the Mughal Empire. This economy consisted of a num-ber of diverse elements, the chief of which were the great inland cities with their

external and internal trade, financing and money markets, the intermediate econ-

omy of rural town and artisan production and the vast agrarian village economy.

He asserts that the loss suffered by the break-up of the pan-Indian economy was

made up by the rise of vibrant regional economies located in the regional power

centres and by the expansion of European enterprise in the port cities and the in-

terior. The assertion about the expansion of European enterprise to compensate

the loss of the traditional Indian Ocean trade is a doubtful one and we will come

back to it later. Bayly's real contribution, based on research into sources generated

in the localities, is his hypothesis of the huge burst of entrepreneurship in power and money in the regions. He appears to date this back to the beginnings of

Mughal decline, thus seeing the 18th century not as a major divide between the

empires but as a continuum, when, by a gradual process of economic and political

change, new alliances were forged in the various regions of India, bringing into

existence a social system that transited smoothly into the period of Company and

imperial Raj in the 19th century.

When we look closely at Bayly's hypotheses, especially as enunciated in Rulers, Townsmen and Bazaars, its validity is limited specifically in geographical area to

the upper Gangetic valley in Awadh and temporally to in the last three decades of

the 18th century when the imposition of British control in Bengal had released new

forces of change proceeding inland from the coast and the Ocean. Even so, his

assertion of the buoyancy of this regional economy is not even hinted at in previous

historical literature and is a major breakthrough in our understanding of the period.

It is necessary to mention the many points made. Bayly sees emerging a new and


vibrant relationship between state and the economy in which a variety of com-

merical groups interacted to mutual benefit with local gentry of plural origins. The successor states of the Empire are thus strengthened to form powerful units

of regional political and economic power and replaced the activity that imperial

central control had generated, indeed without any marked diminution of the scale

of this activity. Bayly goes so far in asserting this continuity as to claim that old

imperial urban centres were replaced by new towns on an undiminished scale. Bayly pays particular emphasis to the role of commercial groups where also he

sees a continuity, in a way that historians of coastal societies and maritime trade

would find alarming. He sees little or no diminution in the activities of the mer-

chant groups, only a regrouping and a reorientation. Merchants now move mas-

sively into financing the gentry and the authorities of the state, providing them credit, transferring their money resources and helping in the maintenance of a

military machine. At the heart of this new economy is the system of revenue

farming which now became a major activity of Indian merchants. Revenue farm-

ing which had existed in a limited way under the Mughals now extended into every

nook and corner of productive activity and let loose an army of speculators and

financiers into the successor states of the empire.

The extension of investment into revenue farming at every level increased the

monetization of the economy and in this respect too Bayly sees an acceleration of the process begun during the height of the Mughal Empire. Bayly tends to dis-

count the drain of bullion out of the subcontinent in the 18th century. On the

contrary, he sees a greater diffusion of money into the locality, small towns and

villages, through merchant speculators in rural revenues. The trend towards

turning produce into quick money extended the use of money even into avenues of

production. Though Bayly sees overseas trade continuing as before (an assertion with which historians of maritime trade would disagree sharply), it is in internal

trade that he sees the real growth and implies that this internal trade may have taken over the slack in any decline of overseas trade. This provides some basis

for this assertion that the rate of urbanization was not reduced and small market

towns grew in distant parts of the country to cater to this growing internal trade.

There is now a much closer nexus between state and the economy than there had

ever been under the Mughals. These commercial groups dependent on the state

gradually de-linked themselves from the state and attached themselves to the in-truding British power. This is thus a revived version of the old collaboration

theme in imperialism, with the shift of attention from political and military col-

laborators to economic collaborators, from Mir Jaffar and Muhammad Ali to Jagat

Seth, Laldas and Muthukrishna Mudaliyar. Taking the cue from Bayly, and sometimes even independent of him, there ap-

peared studies that tended in this direction of rehabilitating the 18th century.


Muzaffar Alam, investigating the Subahs of Awadh and Punjab in the first half of

the 18th century, does not go so far as Bayly in seeing uninterrupted continuities

from the 17th century.4) He does note serious dislocation and decline of com-

merce and economic activity during the critical periods of conflict between local

powers and imperial authority. He sees merchants caught between the two con-tending forces, supporting central authority against regional powers and suffering

in the process. But once the dust settled and regional power was firmly in place,

economic decentralization followed and merchants made suitable adjustments to their relations with state and the new organs of power. Thus Alam, while con-

ceding that the early decades of the 18th century saw traumatic changes in the

Mughal economic system of the preceding century, warns against treating the 18th

century as an unmitigated disaster. He sees, by the middle of the century, systems

in place which made possible some renewal and resuscitation.Andre Wink, looking at Maharashtra, comes down more firmly in support of

Bayly's hypotheses and asserts that this region fits in with the profile of the 18th

century sketched by Bayly.5) To some extent he goes even further than Bayly in

his assertion that the political dissolution of the Empire went hand in hand with

the expan sion of the agrarian and mercantile economy and the rise of the inter-

mediate sections of society. Wink sees a continuity in the expansion of trade and

the cash economy into the villages and districts from the mid-17th century, a con-tinuity that is not broken by the events of the early 18th century. He sees a con-

tinued growth of traders and financiers at the intermediary level into the 18th

century. Like Bayly, he sees the power of the locality and the region as catelysts

of this growth and a symbiotic relationship developed between state at this level

and commercial elements. Wink puts a great deal of emphasis on revenue farm-

ing and speculation on revenue farms by merchants and financiers as an important

elment in the economic growth of the 18th century. While revenue farming has

generally been considered to be playing a negative role in the economy, he con-tests this vigorously and sees it as a means of bringing capital into agriculture and cash into the local economy.

Washbrook, looking at evidence of the late 18th century in the inland districts

of south India, also tends in the direction of a revival and rehabilitation.6) While

not discounting the vast drop in overseas trade and its impact on the textile in-

dustry, he sees, like Wink, the entry of money into village production through tax

farming and investment by speculators tied to regional powers like the Nawab of

Arcot and the Rajah of Tanjore. Utilizing evidence from the early British records,

he sees a brisk internal market in food grains, in the buying and selling of rights

over land, monopolies asseted by rulers or their assignees, and in all this merchant

capital was playing a major role in the interior economy. Admittedly he is not entering the debate on the nature of the 18th century but his portrayal of develop-


ments in the end of the century are of relevance to the debate.

In sum, the cumulative effect of these writings is to bring about a reconsidera-

tion of the Mughal Empire both at its height and during its collapse and to look

closely at various stages of the 18th century in the different regions in relation to

the performance of the economy and economic activities. Some factors of general

agreement emerge among these revisionist historians. They all see a picture of

economic buoyancy in some region or the other of the subcontinent, contrary to

the present verions of a uniform disintegration during the 18th century. They see

powerful merchant groups operating in trade and finance and a symbiotic rela-tionship between ruling elites and these commercial groups. They see revenue farming, a phenomenon generally seen as regressive and destructive , as a positive factor in promoting growth. They see war and rebellions not as uniformly de-

structive but as performing a positive role in generating the economy. They see

a military expenditure induced economic growth in the second half of the century.

Interesting and innovative as these hypotheses are, they have to be rigorously

tested by empirical data on economic performance in various parts of the subcon-

tinent in the 18th century. It has to be ascertained whether the evidence supports

the conclusions of regional revival, primarily as now claimed for the central Gan-

getic plains and Maharashtra, and further whither this justifies a general characteri-zation of the 18th century as merely a continuation of the 17th and bridging the

19th. My intention here is to turn the spotlight of these revisionist generaliza-

tions to the coastal economy of maritime India and look closely at India's seaborne

trade and the internal productive forces that it supported. I am doing this on the basis of recent research into aspects of commerce in the many trading regions

of the subcontinent and on the basis of my own work on the Coromandel coast during this period.

Any characterization of the 18th century as a period of revived economic activity

flies in the face of the consensus in the current literature on maritime trade. In

fact, the general drift of these studies of maritime India is that the decline in these

sectors was, if at all, more dramatic and climacteric than it was in the interior.

Among historians of the decline of the Mughal Empire, Athar Ali asserted more

forcefully than others the effect of the disruption of overseas trading contacts of

the Empire on wealth creation and living standards among the Mughal nobility.7)

More rectntly, he has drawn attention to the need to study the competitive demand in Europe for consumption goods derived in India and its effect on the terms of

trade.8) The historians of commerce see a fundamental difference between the

17th century and the 18th, when an active overseas trading economy crumbled

and led to a decline of port connurbations, industrial production and in the crea-

tion of merchant capital. They would relate this to the dismantling of the political

and military structure of the Empire.


Ashin Das Gupta is prominent among historians who have furthered the under-

standing of this phenomenon and analysed the complex process in the transforma-

tion of India's overseas trading capacity in the 18th century. In two major works

which look at two trading regions-Gujarat and Malabar-he goes in great detail

into the inter-linkage between politics and commerce.9) The picture he presents

of the two trading regions is interesting in revealing the individuality of the pro-

cesses at work in different parts of the subcontinent but also in presenting some

uniformity in overall trends within India as well as in the Indian Ocean trading world.

The picture he presents of Gujarat, through his study of Surat in 1700 to 1740,

is reasonably straightforward and acceptable as providing a general pattern for the

whole 18th century. He identifies a number of factors in the decline of Indian

mercantile activity based on Surat. There is firstly the shrinking hinterland

which progressively reduced the outreach of the port to distant markets, a gesture that affected both import and export trade. The Maratha wars and the weakening

of Mughal authority had reduced the area of producing markets from which Surat

could obtain its export goods. Likewise, the flourishing import trade of Surat saw

a reduction in the markets of consumption in the hinterland. Secondly, there is a falling off of official and noble investment in trade and in shipping. In the great

period of growth, much capital had come into trade through the investment of nobles, largely through prominent merchants. Equally important was their invest-

ment in the construction of ships in which members of the imperial family down to

regional officials had participated. These powerful officials were able to marshal

the resources of the state to have great ships of heavy burthen constructed in and around Surat for overseas trade. This had considerably increased shipping capac-

ity of the port. This had virtually disappeared by the first decades of the 18th

century. Thirdly, these above factors had the effect of weakening the Surat-

based merchant community and breaking the nexus that had existed between the

administration and commerce. A symbiotic relationship turned into one of con-

frontation and Das Dupta discovered a number of cases of merchants-state conflict

that proved debilitating to the former. On a broader front, Das Gupta raises the adverse effects of the contemporaneous

decline of the three Islamic Empires of south and west Asia-the Mughal, the

Safavid and the Ottoman. The disruption in coastal India is matched by the in-

terruption of trade with the Persian Gulf, southern Arabia and the Red Sea. The

great markets of the Persian kingdom were denied to Indian shipping. The great traffic to the Red Sea ports of Mokha and Jeddah and the haj traffic which strength-

ened this commerce had become uncertain. The commercial nexus between the

heartlands of Islam and the subcontinent had been greatly weakened. This reduc-tion in the westward trade, from Das Gupta's evidence, was steep in the first three

Some Reflections on the 18th Century ' Crisis' in the Indian Subcontinent 95

decades of the 18th century. Later on the situation fluctuated vigorously with

new forces regrouping in the suthern Arabian peninsula and the Persian Gulf.

The general picture presented by Das Gupta from the Surat and Gujarat evid-

ence seems applicable, with appropriate modifications, to the maritime trade of

India in the 18th century. Admittedly not all the trading regions have been stu-

died in similar detail but there is enough evidence from what is now known to test

out these propositions. The decline and eventual total eclipse in the participation

of administrative and military elites in commerce and the transfer by this means of capital from land revenues to commerce is clearly evident in many other regions.

It is seen very early on in the 18th century in Bengal where Om Prakash's work

shows the decline in ship owning and in trade investment by the Mughal officials of the subah from even the 1690's.10) More so than in other areas, this seems to

have had a debilitating effect on Bengal's indigenous subah-based merchants and

shipping and after the 1720s there is very little Bengalee shipping based in the

traditional ports of Hughli, Balesore and Pipli engaged in long-distance Asian

trade. While the effects were not as dramatic in Coromandel, they are visible and tend in the same direction. The nexus between administrators and commerce is

broken with the conquest of the Sultanates of Golconda and Bijapur by the Mu-

ghals. The large ship-building complexes of the Godavari delta—Madappollam and Narsapore-which used to be sustained partly by the investiment in construc-

tion by the rulers of Golconda dissipated from the 1680's. Similarly Bijapur rulers

and generals who had supported merchants and shipping towards the south were

no longer able to continue this support. The Mughal machinery which was put in place was preoccupied with raising revenue from the land and with consolidat-

ing its hold over those revenues. It did not step in to play the roles that the

Golconda and Bijapur rulers had played in fostering the trade of the region. On

the contrary, it encouraged European powers to expand their activities and their

presence, hoping to reap the spin-off benefits from European investment in their territories.

Das Gupta's discussion of the role of India in inter-Asian trade, which he high-

lights in relation to the westward trade to the Persian Gulf and the Red Sea, could be considered in a pan-Asian context. The decline of demand for Indian goods

in west Asia has been already noted and this must have resulted in a reduction in

bullion imports into India from that region. In a sense more serious were the

trends in the eastward trade, to the mainland kingdoms of Southeast Asia, the

peninsula and the archipelago islands. Here the great age of commerce which was the 17th century had come to an end with the destruction, one after the other, of

a number of port-cities and trading kingdoms and the decline of indigenous ship-

ping and enterprise. By the end of the 17th century, Indian shipping had lost the markets of the Spice Islands, the Celebes, Java and large parts of the Sumatran


coastline. Some parts of the Malay peninsula were still open to it as well as the

kingdoms of mainland Southeast Asia. But the evidence seems to suggest that

these kingdoms had lost the vitality they had in the 17th century. Internicine warfare and changing boundaries had created problems for trade . It is true that the Dutch East India Company sought to supply these markets as part of its vast

inter-Asian trade. But all their efforts could not take up even a fraction of the

volume that had been supplied by Indian and Southeast Asian merchants in the era of free trade. Bullion (mainly gold) had flowed into India from Southeast Asia

through this trade and it must be assumed that this flow was substantially reduced

in the 18th century.

Bayly, Wink and others who postulate the continuing vitality of the commercial

classes in various parts of India will find little to support this in the maritime dis-

tricts. In fact the one feature that comes through with consistency is the break

up of the merchant groups trading overseas. In Surat this began in the 1730's

with merchants abandoning seaborne trade in numbers. There seems to be a

drift to smaller neighbouring ports to retain a lower visibility. A similar trend

is noted in Bengal with the indigenous port-based fleet being decimated and the long-distance trade to the Malay peninsula, Acheh, Sri Lanka and Maldives being

cut down or even abandoned. The same happened in the Coromandel coast

where Masulipatnam, the home of a large shipping fleet, has dwindled to a shadow

of its former self. Golconda-based shippers who had featured in the trade to

Acheh eastwards and to Surat and the Persian Gulf westward, had dispersed by

the early 18th century. Hindu shipping of Coromandel that had plied from a

number of ports north and south of the Coast died a slow death.

It was noted above that Bayly has asserted that most of this slack was taken up

by the expansion of European enterprise. This is only partially and sectionally true. If we look at the English Company's investment in India in the 18th cen-

tury, there is no doubt of a steady growth in the first four decades after which the

fifth decade (1750-59) saw a decline of 10%, a decline which continued sharply

into the 1760's and 1770's and only began to recover after the total conquest of Bengal.11) Similar cumulative figures have not been brought together for the

Dutch East India Company but regional studies show a steady decline in all the

three areas-Bengal, Coromandel and Gujarat-where investment had stood at

peak levels in the end of the 17th century. It may be argued that English private trade helped to pick up some of the slack in India's overseas trade and there is no

doubt of the power of private shipping and investment in the 18th century. This is particularly so in Bengal where Marshall has discussed and documented the

phenomenal growth of the fleet based on Calcutta.12) This gowth was, of course, fostered by the favourable situation English traders acquired by the farman of

1717 which gave them a competitive edge over Indians not only in the long-distance

Some Reflections on the 18th Century 'Crisis ' in the Indian Subcontinent 97

trade but also over the coastal trade in commodities of daily consumption . But evidence from other regions does not tend in this direction. English private trade in Madras was very sluggish through most of the 18th century and began to pick

up only after this port entered the China trade triangle and was given a role in

this trade. Bombay too took long to overhaul Surat and bring whatever trade

was left there under its influence. It was able to do this only after the English

secured control of the Surat citadel in 1759 and imposed regulations on Surat

shipping that conduced to the advantage of English interests in Bombay.

Both Bayly and Wink refer to the brisk movement of capital in interior India

and the transformation of land revenues into monetary resources which in turn fed

the military power of the state and its dependents. They give the impression of

an abundance of capital in the regions they are studying and Bayly downplays the

effect of the drain of bullion for the China trade and the remittances to Europe

after 1757. The picture seen in the coastal region is totally different. It is one

of capital-starved economies with interest rates going up continually in the 18th century. In the 17th century venture capital in and near the great ports was easy

to come by. Interest rates on long term loans were a modest 6% to 8%. In the

18th century these rates rose to 10% and 12% and in the second half of the cen-

tury commercial capital was very difficult to secure. Indian merchant middlemen

to the European Companies who once were able to work on low advances of 25 %,

now asked for 50% and more and immediate payment of the balance on delivery

of goods. In the 17th century, the Companies used to encourage the formation

of Indian merchant joint-stocks with substantial subscribed capital. These are

unheard of in the 18th century. This put the merchants in the position of com-

mission agents to the Companies, reducing their ability to influence prices and correspondingly their profit margins. Evidence from Coromandel and from Mal-

abar in the second half of the 18th century suggests an increase in merchant in-

solvency. When we move into the last quarter of the 18th century in Coromandel

with the Carnatic and Tanjore state debts assuming large proportions, there is a

highly volatile climate of speculation, default and bankruptcies.

European enterprise, both Company and private, in India had ceased to play the

productive role it played in the 17th and first half of the 18th centuries. As the English Company's China trade expanded by the 1760's, India became subsidiary

to the China trade and took on the role of provider of capital and bullion to pay

for exports from China to Europe. The Company gave precedence to the China

tea exports whenever it was short of capital. The trade of European freemer-

chants was even more parasitic on the Indian economy. They competed directly and successfully with Indian merchants in their overseas markets. They utilised

the political and military dominance that the Company had secured in the three

nodal commercial regions-Bengal, Coromandel and Gujarat-to enter into the


international networks of Asian trade. An index to their dominance of Indian

commerce was their penetration of the coastal trade of India on the east and on the

west, a sphere that had so far been totally in Indian hands. They entered the

trade in rice, cotton, sugar, salt-commodities which had formed the bulk of the

coastal trade of Indians for centuries. The English freemerchants had, besides, the advantage of the import trade to China, been facilitated by the Company's

presence in Canton and its arrangements with the Chinese provincial authorities. The net effect of the trade of the English Company and the freemerchants was to drain the country of bullion by a chain of transactions, either to Europe or to

China, to pay for ever-increasing tea imports. In this way, European enterprise

had the opposite effects from what it had before about 1750.

The decline of India's overseas trade and the demand for Indian textiles in var-

ious Asian markets seem to have had their effects on textile production and the

handicraft weaving industry. Again there is a problem here of determining wheth-er European demand made up in any measure for this decline. The chances are

that it did not. A decline in productivity appears to have set in from the early 18th century with the loss of vital Southeast Asian markets and the instability of

West Asian markets. A general depopulation of weaving villages is noted in mid-

century in Bengal and Coromandel.13) Merchant capital which had flowed into

the weaving villages throughout the 17th century through reasonably secure ad-vances was now reluctant to do so. This was partly due to the declining profit-

ability of the textile trade, partly the changing political relationships in the weav

ing districts and partly the attraction of speculative revenue farming and support

of warring factions.

This affected the movement of prices and wages in the weaving industry in

special ways. The constant demands of itinerant armies on food resources in the

countryside pushed food prices sharply upwards. From every region of India

the trend is towards the upward movement of the price of food grains. The

previous flexibility which enabled districts to tide over short periods of climatic disasters-floods, drought, pestilence-was not there any more. While sale prices

of textiles in the weaving villages were understandably going up, the increase in

no way matched the increase in price of food grains and even of raw materials

such as cotton. The Companies and the major bulk purchasers and financiers

were able to make hard bargains to keep prices down. With the decline in over-

seas exports to Asia they had little compettition in the weaving villages. There is

general evidence of decline in quality of weave, in bad debts with weavers. The

position becomes worse in the last quarter of the century, with the English in the

position of monopsonists in weaving villages, having ejected competition from other European Companies and even from Indian private traders.

To consider this question of the maritime trade of India in greater depth, it will


be necessary to look closely at the trends in Asian trade in the 18th century . Writ-ing in 1948 Holder Furber had first posited a ' commercial revolution ' in Asia in

the second half of the 18th century, resulting from the growing China tea trade

which had a series of chain reactions in the Asian maritime world.14) He noted

the drying up of the westward trade and a drift eastwards, ending up in China to feed the European tea trade with China. He saw this primarily as a phenomenon

of European ' country ' trade which took over from a severely weakened Asian

trade. Later work has enabled us to see these trends more clearly, though much

remains to be done. The China trade had opposite effects on the rest of Asian

trade. As a triangular trade between Europe, India and China, if fostered some

growth in India itself, in the form of creating a demand for Indian goods in China and in markets where other goods could be procured for China. On the other

hand, it had the adverse effect of draining India of bullion to fulfil the demands of

the China trade. The effects of this drain were particularly serious in Bengal where both treasure and revenue surpluses were exported for the China trade .15)

Some changes occurred in the westward trade of the Indian Ocean with the

growth of Oman and of Muscat as a trade centre of the southern Arabian region. Omani Arabs became the agents of a mini-revival of Indian trade westwards and

there was an increased demand for Malabar pepper and Gujarati cotton textiles.

This tied into the Dutch trading system centred in Cochin which provided them

with Southeast Asian spices and Javanese sugar. This mini-revival, which began

in the 1740's, continued till the end of the century, leading to an upsurge in trade

in Calicut and further to the south in the kingdom of Travancore where the king

took major steps to attract trade to his port and carry it on through a royal monop-

oly. Ships from northern ports were by-passing Surat and proceeding to Malabar

and indirectly Coromandel merchants were also cutting into this trade. Muscat

grew as a distributing point for Indian goods to the Persian Gulf, southern Arabia and the East African coast. It is interesting to note that the major beneficiaries

of this trade were the Omani Arabs and not Indian shippers which is an index to

the decline of Indian maritime enterprise in the western Indian coastline. It is

possible that the Omani Arabs had partnership arrangements with Moplahs of Malabar, another group whose long-distance traffic westwards and eastwards had faded away.16)

There was also a revival in the trade to Southeast Asia caused by the demands

of the China trade. The need to purchase goods in Southeast Asia for sale in

the Chinese markets stirred up once again the sluggish markets in Southern Asia for Indian textiles. While part of this revival was handled by English free mer-

chants engaged in the trade to China via Southeast Asia, a good share of it fell in

the hands of the traditional Indian shippers to Southeast Asia who had survived

through the lean years of the first half of the 18th century. Coromandel Hindu


shipping to archipelago Southeast Asia had virtually disappeared by this time.

Some of it survived in the trade to the mainland kingdoms of Burma and Siam

and, in partnership with Portuguese and English free merchants, in Manila. But

the bulk of this trade was carried on by Chulia Muslim merchants of the south

Coronmandel ports of Cuddalore, Porto Novo, Nagore and Nagapatnam.

The picture presented here is very different from the confident assertion of the

18th century in parts of inland India as a period of continuity in economic activity

and even a resurgence in some sectors. Historians of maritime India will find it

difficult to move away from the consensus among them of an almost dramatic col-

lapse of Indian overseas trade with a consequent downturn in the commercial

economies of the coast. This picture is pervasive throughout the subcontinent.

It is most visible in the two areas of intense activity towards the end of the 17th

century: Gujarat and Bengal. At first in Gujarat, somewhat later in Bengal, the nexus with traditional maritime Asia was cut and merchant groups, shipping,

production which thrived on this nexus were set back. In both these areas the causes of these changes were both internal and external. Internally, the collapse

of the political infrastructure that had been so much a support to overseas trade

was a fundamental factor. Far from there being political and administrative

support to rade, these were now major disincentives to trade. In both areas, the

Maratha invasions had similar effects. In both areas the decline of indigenous

shipping based on old Mughal ports was massive. In the remaining areas of coastal India, the decline was more gradual and tradi-

tional trading networks persisted with adjustment to changing conditions. In

Malabar and Coromandel, where there were two export commodities which had

a persistent demand in Asian markets, a skeletal inter-Asian trade continued. In

Malabar, pepper was in demand for the China trade and there seems to have been

a revival in demand in west Asia. In Coromandel, cotton piece-goods had a con-

tinuing demand in Southeast Asia where merchants could utilise old networks.

In Malabar it could be argued that the second half of the 18th century saw an over-

all revival with the northward and eastward trade picking up in some measure.

This revival is reflected in the growing power of the indigenous states of Travan-

core and Calicut and a regeneration of trade in the Cutch port of Cochin. The

revival continued till the last two decades of the century when westward expanison of Mysore brought it to a halt.

The Coromandel coastal economy was depressed through most of the 18th cen-

tury, caused by the combination of a number of factors : decline of overseas trade,

almost continuous fighting over half a century, recurring climatic crisis, capped

towards the end of the period by a rigorous mercantilist state strictly regulating

trade and stifling competition. The area became a major importer of food grains,

primarily from Bengal, and the reduction in exports caused a serious shortage of


bullion. Populous weaving villages were deserted and depopulated . What was left of the weaving industry was strictly controlled by the English whose power had

extended into the weaving villages. The only regions of the Coromandel where

some activity picked up were in the north-the Godavari delta-and the south-

Tanjore. In the north the existence of surplus rice production kept food prices

from rising as high as in other districts. There was some competition by other

European Companies and by private European trade for textiles manufactured

here. In this way money was coming into the Godavari delta districts and em-

ployment in the weaving industry was maintained. In the far south also the Kaveri delta continued to produce surplus rice and be a net exporter . The Southeast Asian trade was carried on from ports along this coast . This brought money into the area and kept weaving villages in employment. So the position

in these two districts contrasts with that in the large central areas where the once flourishing textile industry centred around Kanchipuram had been decimated .

To sum up, historians of maritime India cannot accept the proposition that the

18th century saw growth and renewal in areas of economic activity along the In-

dian coastline. To them the evidence is overwhelming that the Mughal Empire

was a great generator of Indian overseas trade. Its collapse had the opposite

effect. While there are phases when the decline of trade was faster than in others , and there appears to be some years when particular factors operated causing a

minor revival in particular regions, the overall trend of Indian trade as of Asian

trade is downward. The 18th century continues to be, to maritime historians,

a woeful century. India's integration with the Indian Ocean commercial econ-

omy underwent drastic changes in the 18th century and the effect of most of the

changes was to the detriment of entrepreneurs based in the Indian subcontinent. The 18th century was thus a period of acute crisis to the maritime trade of India . If we were to accept the proposition that the latter part of the century saw growth

and revived economic activity in the interior of the subcontinent, we should in-

quire carefully as to what took the place of overseas trade as a generator of this activity: Was it regional state power? Was it increased internal demand? Was it military fiscalism? Was it reurbanization and regrouping of towns? We may

have to look to different combinations of these factors in different regions of the

subcontinent.

Notes

1) Some of these advances in the study of Mughal imperial decline are brought together in Symposium: Decline of the Mughal Empire , Journal of Asian

Studies, xxxv, 2 (1976), pp. 221-63. 2) A. Das Gupta, Indian Merchants and the Decline of Surat c1700-1750 (Wies-

baden 1978)pp.6ff.


3) C. A. Bayly, Rulers, Townsmen and Bazaars. North Indian Society in the

Age of British Expansion, 1770-1870, (Cambridge 1983); C. A. Bayly, Indian

Society and the Making of the British Empire, The New Cambridge History

of India II. 1 (Cambridge 1988). 4) Muzaffar. Alam, The Crisis of Empire in Mughal North India. Awadh and the

Punjab 1707-1748, (New Delhi 1988).

5) A. Wink, Land and Sovereignty in India, (Cambridge 1986).

6) D. A. Washbrook, " Some notes on market relations and the development of

the economy in south India c1750-1800 ". Paper to Second Anglo-Dutch

Conference on Comparative Colonial History, Leiden, September 1981.

(unpublished). 7) M. Athar Ali, " The passing of Empire: The Mughal case ", Modern Asian

Studies, 9.3, (1975), pp. 387-90.

8) M. Athar Ali, " Recent theories of eighteenth century India ", The Indian

Historical Review, XIII, 1-2, (1986-7), pp. 102-10.

9) A. Das Gupta, Indian Merchants ... , A. Das Gupta, Malabar in Asian

Trade 1740-1800, (Cambridge 1967).

10) Om Prakash, The Dutch East India Company and the Economy of Bengal 1630-1720, (Princeton 1985), especially pp. 22-34.

11) K. N. Chaudhury, The Trading World of Asia and the English East India

Company 1660-1760, (Cambridge 1978), Appendix 5: Statistical Tables.

Table C. 2, pp. 508-511.

12) P. J. Marshall, East Indian Fortunes. The British in Bengal in the Eighteenth

Century, (Oxford 1976), pp. 51-75.

13) For Bengal there is an excellent, detailed study of the weaving industry.

Hameeda Hessein, The Company Weavers of Bengal. The East India Com-

Pany and the Organization of Textile Production in Bengal 1750-1813. (New

Delhi, 1988). For Coromandel the evidence is still to be systematically stu-

died But it is there in abundance in the reports of Company officials' visits

to weaving districts to be found in Madras Public Proceedings of the period

1770-1790.

14) H. Furber, John Company at Work. A Study of European Expansion in India

in the Late Eighteenth Century (Cambridge, Mass. 1948), pp. 160-90.

15) Tan Chung, " Britain-China-India trade triangle ", Indian Economic and So-

cial History Review. XI. 4 (1976). pp. 411-32.

16) Patrician Risso, Omani and Muscat. An Early Modern History (London 1986). A. Das Gupta, Malabar in Asian Trade, pp. 87-102.

Some Reflections on the 18th Century 'Crisis' in the ...

Documents

Transcript of Some Reflections on the 18th Century 'Crisis' in the ...