THE ECONOMY OF MUGHAL INDIA

During the ‘golden age’ of the Mughal rule, Indian subcontinent was one of the biggest contributors to the world economy.

The economy was largely agrarian, growing a wide variety of food crops including wheat, barley, rice and millet. Cash crops like cotton, tobacco and indigo were grown too. How did Mughals, improve the productivity of agriculture? They made substantial investments in irrigational infrastructure. If we talk about the manufacturing sector, Indian artisans produced a wide variety of manufactured goods like cotton textiles, processed silk products, refined sugar and processed alcoholic beverages. The internal commercial activities were thriving too! With goods flowing freely between cities and rural areas. If we speak about international trade, this was the very period during which the English and Dutch East India Companies sought to create new markets in Europe for Indian goods, further increasing the already large demand for them.

It’s a fact , Mughal empire was one of the greatest and wealthiest empires that ruled India. But rulers right from the founder Babur, to his last great successor Aurangzeb sent gifts and revenues to Damascus, Baghdad, Cairo, Uzbekistan, modern Tajikistan, modern Xinjiang in China, Mecca, Medina and many other places, aside from also sponsoring religious activities. All of this was charged to the state coffers. The agricultural sector was treated quite poorly: the pre-Mughal Hindu rulers collected sixteen percent of total produce as tax, while the Mughal rulers collected thirty to forty percent. Death penalty was given to tax defaulters during Aurangzeb’s reign. The Mughal rulers neglected irrigation, other developmental works in the field of agriculture, and only viewed this sector as a means to finance their personal whims and fancies.

INDUSTRY

The industry during the Mughal era shone brighter than that of any other period. Until 1750, India produced 25% of the total world industrial output. The goods produced were distributed throughout the world. The key industries during this era were textiles, shipbuilding, and steel. Processed products such as cotton textiles, silk, thread, yarn, jute products, metalware, and food items like sugar and butter were also available. The growth of the manufacturing industries in India under the Mughal rule is often compared to the proto-industrialization era in Europe.

In early modern Europe, there was noteworthy interest in items from Mughal India, especially cotton materials. Flavours, peppers, indigo, silk, and saltpeter (for use in weapons) were in high demand. European design turned out to be progressively subject to Mughal Indian materials and silks. From the late seventeenth century to the mid-eighteenth century, Mughal India represented 95% of British imports from Asia, and the Bengal Subah region alone represented 40% of Dutch imports from Asia. Interestingly, there was little interest in European merchandise in Mughal India, which was to a great extent independent. In this manner, Europeans had nothing to bring to the table, aside from certain woolens, natural metals, and a couple of items built for show and display. The imbalance in exchange made Europeans trade massive amounts of gold and silver to Mughal India to pay for South Asian imports. Indian merchandise, particularly from Bengal, was additionally traded in vast amounts to other Asian markets, such as Indonesia and Japan.

LABOUR

Labour in the Mughal empire was mostly focused on the primary sector. Up to 64% of the working population was employed in the agricultural sector, the tertiary sector took in about 25% and the industrial sector employed the least labour, a little over 11%. The real wages and living standards of the people of Mughal Bengal were high in contrast to Europe, during the early seventeenth century. Economic historian Paul Bairoch even claims that both India and China had a higher GNP per capita than Europe up until the late eighteenth century. Conclusively, we see that in a time where mechanical labour was undervalued, the Mughal economy was quite accepting of this section of the working class.

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TRADE

Throughout the Mughal Golden Age, India had a substantial trade with various Asian and European countries. India was, in the words of Bal Krishna, "the respiratory organ for the world's movement and distribution of money and commodities; it was the sea where all the rivers of trade and industry flowed and thus enriched its inhabitants."

Goods were transported either by overland routes to Central Asia in the North-West via Lahore and Kabul, or to Persia via Multan and Kandahar, or by sea to the Persian Gulf and Red Sea ports in the West and the Indian Archipelago and Spice Islands in the East. Lahori Bander and Surat in the west, Masulipatam in the south, Chittagong, Satgaon and Sonargaon in the east were the primary ports.

Indian exports included products such as Calicoe, muslin, silk, and fancy products; and raw materials like indigo, saltpeter, spices, and pepper.

Indian textiles, in particular, found extensive markets in foreign countries bearing “ample testimony to the adaptation by Indian weavers of quality and prices to the varied requirements, fashions and tastes of people, representing different cultures and stages of development from savages and slaves to kings, nobility and common people in different lands.”

Gold, silver, precious stones, goats, metals, tobacco and African slaves were the main imports. The nation has always had a favourable trade balance. The inflow of bullion and precious stones created the gap between exports and imports. This characteristic of the Indian economy has drawn widespread attention.

In the words of Terry, “many silver streams run thither as all rivers to the sea, and there stay, it being lawful for any nation to bring in silver and fetch commodities, but a crime, not less than capital, to carry any great sum thence.”

The units of currency have been the gold mohur and the silver rupee since the time of Akbar, both equal in weight and a general measure of value circulating without any fixed exchange ratio between them. The pagoda, the coin of ancient Hindu kings, was the standard of value and also the means of trade in southern India. It continued to be so until the time of the East India Company.

These coins, issued from different mints, located even in the most remote corners of the country, did not deviate significantly from the norm, i.e. 175 grams troy. But, with the disruption of the Mughal Empire into separate kingdoms, for coinage purposes, branches of the Imperial Mint became autonomous factories.

The outcome was that a bewildering variety of coins soon flooded the country. It caused the trading community considerable inconvenience. The government offered an opportunity to defraud the poor and the ignorant but brought money-changers with a handsome income.

In the absence of the commodity, local factors in each country determined the efficient means of transport and price movements. Thus, drought or famine caused prices to inflate. Rich Harvests brought down these inflated prices.

For example, food-grain prices in Surat were usually much higher than in the North, whereas rice, wheat, butter and oil were available in Bengal at half the price prevailing in other provinces. All the same, the overall price level was inadequate.

The rich lived a life of status and luxury concerning the standard of living.

The merchants lived in elegant style in the large commercial centres, constructing comfortable and imposing houses for themselves, wearing expensive dresses and their women-folk possessing ample jewellery. As for the common man, in the 19th century, he had more and more food to consume than what he had to offer.

Even Moreland admits that butter (ghee) and seeds furnishing edible-oils were, relatively to grain, distinctly cheaper and in this respect, the lower classes were better off as consumers. In grains, milk, and ghee, marked the conditions of plentifulness and cheapness, for they constituted a large part of the traditional Indian diet in the 17th century.

Therefore, the per capita intake of these goods has to be higher. In the Mughal period, the average consumption of cloth, furniture and salt was probably lower than that of the British. As these form a much less significant part of the family expenditure of the poor man than food, we conclude that India was economically better off than it was under the earlier part of British rule till the beginning of the 18th century.