RAJIV GANDHI NATIONAL UNIVERSITY
OF LAW, PUNJAB PATIALA
PROJECT REPORT ON
“HISTORY OF INDIAN FOREIGN
TRADE AND CURRENCY”
SUBMITTED IN THE PARTIAL FULLFILLMENT OF
B.A. LLB.(HONS.) – 1ST SEMESTER
SUBMITTED TO: SUBMITTED BY :
MS. RACHNA SHARMA DILJOT JATANA (547)
(Lecturer in History) KRISHNA THEJ (557)
RGNUL, PUNJAB CHIRAG PARIHAR (567)
MEGHNA BAGHEL (577)
ACKNOWLEDGEMENT
we take immense pleasure in thanking Prof. MS. RACHNA SHARMA, our beloved TEACHER for having permitted us
to carry out this project work.. we would like to thank her for her able guidance and useful suggestions, which helped me in
completing the project work, in time.
Finally, Words are inadequate in offering thanks to our friends, and seniors, for all their valuable assistance in the project
work and wishes for the successful completion of the project.
Contents
1 Introduction
2 Geo Economic Features Of India
2.1 The Himalayas
2.2 Indo-Gangetic Plane
2.3 2.3 Oceans
3 History Of Indian Foreign Trade
3.1 Origin Of Foreign Trade And Commerce
3.2 Foreign Trade In Ancient India
(i) Mesopotamia
(ii) China
(iii) Persia
(iv) Phoenicia
(v) Asia Minor
(vi) Egypt
(vii) Crete
(viii) Greece
(ix) Rome
3.3 Foreign Trade In Medieval India (C.1200 – C.1757)
3.4 Foreign Trade In India (C.1757 – 2010)
4 History Of Indian Currency
5 Ancient Indian Currency
5.1 Indo-Greek Currency
5.2 Medieval; Indian Currencies
5.3 Currencies Of Independent Kingdoms
5.4 The Modern Indian Currency
6 Conclusion
7 Bibliography
8 Remarks
1.1 Introduction
India is looked upon as a country with immense resources available through its length and
breadth. India was famed for her fabulous wealth ever since the ancient times till the
establishment of the British Empire. Indian trade history reflects that despite the frequent
political upheavals during the different times throuout its history, the country was still
prosperous. The political and economic policies followed by the Muslim rulers propagated the
growth of towns in various parts of the country. These towns grew into trade and industrial
centers which in turn led to the general prosperity. From the 16th to the 18th centuries, covering
the two hundred years of Mughal rule, Indian urbanization saw further growth.
Descriptions of the wide variety of excellent goods sold in the Indian markets of those days are
found in the records of foreign travelers. India was well known for its textiles one of the chief
items of export. Carpets were used both in ancient and medieval India.
India today stands at a over a trillion economy. Darjeeling tea, Indian khadi cotton, Bombay
Duck, Kashmiri carpets, Indian spices and dry fruit are just a few of the famous gifts India has
given to the world. The economic levels have improved in the urban and semi-urban areas.
Literacy is penetrating deep in to even the far reach areas, thus creating awareness and to higher
consumption patterns for all kinds of goods across all sections of the society. Promoting the
availability of goods from different parts of the world has seen a rise in more trade with other
countries.
Indian trade history is remarkable. Indian trade has benefited and so has the world. The country
has realized that at the end of the day, maximizing use of one’s own resources is what makes all
the difference.
In the domain of economic Indian history, Indian currency plays an equally substantial role.
India is one of the earliest issuers of coins in the world. It can be comprehended that the history
of Indian coins and the system of coinage of yesteryears, goes to back to indeed undocumented
times, every pain being taken to authenticate them in systematized format presently.
The currencies in their own time own time devotedly had served the purpose for which they were
casted. But beyond that, they still retain their worth and substantiality. History of Indian currency
provides an unparalleled series of historical documents. These historical Indian coins weave the
texture into their being and not simply exemplifying it. The Indian currency provided a platform
for Indian traders to sell their products throughout the world and get maximum out of it.
1.2 GEO ECONOMIC FEATURES OF INDIA
Before going into the details about the origin, growth, and development of foreign trade
in India it will not be out of place to have a resume on the geo-economic and geo-
political features, governing the country since time immemorial. Indian subcontinent has
passed through various phases of development through centuries and its geographical
setting has greatly influenced its development. Geo-economic features arise from
commercial application of a country.
The diversity in the geographical distribution of wealth renders it necessary for man to obtain
from a distant area those commodities which are not produced within his own localities. The
differences of human wants account for an extensive system of exchange between the inhabitants
of different places and nations. The division of labour asserts itself and gives rise to production
which helps the cycle of trade even between different trades and industries and different nations.
Thus foreign trade, which is between geographically separated groups, has dominated practically
all the societies and the economic sources are so unevenly distributed over the earth that even the
possibility of human life in places is contingent upon the transport and exchange of goods1.
1.2.1 The Himalayas
On the north extremity of the country the great Himalayan forms the most elevated
mountain chain, which extends from hindukush to assam with natural breaks in between
the hills which served as natural roads(passes) to the traders and merchants in particular
and the masses in general.2 The great commercial trade routes passed through the western
hilly gateways which helped a lot in
Establishing commercial and political contacts with adjoining foreign countries of Asia in
particular and the world in general. Access could be gained either from the Indus delta to
southern Baluchistan by the rocky track or Afghanistan by the polan, the tochi and the
Khyber pass as well as by the river valleys of gomal. The importance of these natural
1
Foreign Trade and Commerce in Ancient India by Prakash Chandra Prasad, p. 6
2
roads from commercial point of view was so much that they remained closed for some
part of the year.
1.2.2 The Indo-Gangetic plane
The Indo-Gangetic plain, mainly drained by the Indus, the Ganges, the Yamuna, the
Brahmaputra along with their tributaries, played an important role in the progress of
Indian commerce. It provide not only the land routes, but also water routes to have
approach directly into the seas. It was within the valleys of these rivers chief kingdoms,
the important trade centers, the industrial belt, which helped in international trade were
founded.
1.2.3 The River System
India is not only the land of hills and forests but also a land of rivers.
The river systems of northern India are. The Indus and its tributaries, the Sutlej, beas,
Ravi, Chenab and Jhelum; the Ganges and its tributaries. The peninsular river systems are
Irrawaddy, besides the Godavari, Krishna, Cauvery, Narmada, Tapti, Mahanadi,, and
others the river system prooved as a key to the economic progress of India which flow
into the plains all year round.
These systems helped a lot for people to carry on their trade throughout the year without
any much difficulty.
1.2.4 Oceans
The west of Arabian sea, separating India from Arabia and Egypt is bounded on the north
by the coast line of Persia. It has been the busiest sea route throughout. As a result of the
seasonal monsoon it constituted at least for four thousand years a great sea route for
commercial intercourse. The Indians, the Arabians, the Phoenicians and the
Mesopotamians, in fact all the sea faring nations of the west, have considered this to be
the chief sea route for commercial activities. It communicates with china sea by the strait
of flores including the principal inlets such as bay of Bengal, the sea of Oman, the red
sea, and other chief straits such as channel of Madagascar, Mauritius, bourbon, the
Comoro islands, Maldives, Ceylon, the Andaman an d nicobar islands, etc.
Indian seas are essentially of tropical character. Its coastal area is therefore free from
effects of iceberg and the other oceanic obstructions resulting from the frozen polar
regions, heavy mists, fog, etc. which prevented early navigation.
Like topography the climate of India is full of variety and contrast, ranging from the
tropical monsoon type to the cool temperature type in Punjab from hot desert type in
rajputana to the wet tropical type in assam indicated by the heavy rainfall of assam and
cherrapunji. The monsoon is the predominant feature of Indian climate which helped the
mariners to a great extent in navigation.
India lies completely in the belt of north east trade winds blowing in India from about the
end of October to February and march which helped the traders from the Mediterranean
world, Egypt and Mesopotamia.
Consequently from the diversity of her physical features India came to possess a great
variety of animal, vegetables and mineral products which helped the economic pursuit of
india to a great variety of animal, vegetable and mineral products which helped the
economic pursuit of india to a great extent3.
1.3 history of Indian foreign trade
1.3.1 ORIGIN OF FOREIGN TRADE AND COMMERCE
The diversity in the geographical distribution of wealth renders it necessary for man to
obtain from a distant area those commodities which are not produced within his own
localities. The differences of human wants account for an extensive system of exchange
between the inhabitants of different places and nations. The division of labour asserts
itself and gives rise to production which helps the cycle of trade even between different
trades and industries and different nations. Thus foreign trade, which is between
geographically separated groups, has dominated practically all the societies and the
economic sources are so unevenly distributed over the earth that even the possibility of
human life in places is contingent upon the transport and exchange of goods4.
3
Cambridge Economic History of India vol.i, p.11
4
Foreign Trade and Commerce in Ancient India by Prakash Chandra Prasad, p. 8
The evolution of trade could be explained as following:
1. In the prehistoric age man appeared on earth as a food gatherer. He lived in the
natural habitat-dwelling. Fruits, nuts and roots as well as animals served as food. The
discovery of fire and the emergence of man as a tool maker opened the second scene
of hunting stage. We do not know how and when the primitive man came to
understand that the leaping flames could make life less hard and project him from a
danger. The invention of bow and arrow made the wild game of hunting a regular
item. The use of pottery made his home economy perfect. Now exchange could take
place occasionally within the family or tribe. This gave birth to division of labour
between two sexes. Accordingly, man was engaged chiefly in hunting, fishing, and
making of tools, etc. On the other hand, his wife and daughters devoted their time in
the building of huts, the gathering of herbs and fruits, the cultivation of the field, the
grinding of corn and the other similar works. These different phases of human
civilization form the first stage of commercial development in which producer and
consumer were united and no trade existed outside family group.
2. With the domestication of animals the primitive economy changed its phase. The
people than not only produced more articles of food but also a greater variety which
naturally required division of labour among the members of community. Division of
labour was ultimately responsible for exchange of goods, which ultimately brought
the society to the second phase of trade development which was between the different
tribes. The trade here was more on barter system. Where cattle and other farm
products became a commodity unit for exchange of goods.
3. In the third phase trade developed between the strangers. The luxury trade in
precious and decorative substances was also the call of time. The desire for
ornaments, was a chief factor in the development of trade and the growth of
civilization. Shells from Indian ocean and the red sea have been discovered in the
tombs dating back Mesolithic and Neolithic periods.
4. With the growth of commercial enterprise, trade began to assume certain fixed forms
and passed through the fourth stage of development in which production was now
earmarked for some definite market. This may be called the period of town economy.
Division of labor received great impetus and the branches of production became
socialize. Markets arose as a centre for industries where trade became a permanent
feature. Trade with distant places was usually conducted by foreigners who met
periodically at markets and fairs to dispose of their commodities which gradually
gave birth to merchant guilds.
5. The fifth stage of development witnessed the evolution of the world market.
Commodities were no longer transferred direct from the producer to the consumer but
were first passed through the hands of collecting traders.
6. The sixth stage was marked by the growth of a host of intermediaries through whose
hands the goods usually pass before they reach the consumers.
1.3.2 FOREIGN TRADE IN ANCIENT INDIA
In spite of geographical, linguistic and racial isolation India always maintained its contact
with the outside world. The ports and the passes of our country were used by many
indigenous and foreign traders from very early times of its history. She formed an
integral part of the ancient commercial world which extended from the Mediterranean sea
to the Indian ocean. It is well supported by the prevalence of the strikingly similar stone
age implements and other antiquities of the past in this wide area.5
India had trade relations with many parts of the world from times immemorial. Indians
used to trade with people from every part of the world. The trade relations and the
commodities traded between India and different parts of the world are described below:
(i) Mesopotamia
India has a history of trade with the people of Mesopotamia from centuries. Two great
rivers, the Tigris and the Euphrates find prominent place in the history of Mesopotamia,
where legends locate the Garden of Eden. Its very name signifies the land between the
two rivers. In Greek meso means middle and potames means river. Sumerians were the
earliest civilized inhabitants of Mesopotamia.
In the 13th century b.c., the sea-faring people from India came explore the land of
Mesopotamia for commercial markets. In view of the close affinity between the
Sumerians and the Indians in their spiritual, religious, and secular thoughts, language and
literature, arts and sciences, medicine and agriculture, social organization and the way of
worship Langdon admits that the Indus script was known in Sumer in pre-sargonic times6
as a result of commercial contracts between the two countries. It further shows that the
Sumerians and the Indians had a common origin and had commercial and diplomatic
relations for which script was necessary. Fr. S. Ganana Prakasar believes that was a great
similarity between the old Sumerian language and the Dravidian language spoken in
5
The indo-Asian culture Vol.III , 1954-55 ; K.C. Chakravarti, p.182
6
Langdon, A New Factor in the Problem of Sumerian Origin, J.R.A.S. 1931, p.593
india. Indian traders settled in the island of Bahrein in the Persian gulf as is evidenced by
the stupa like tombs and the temple of mother goddess. The merchants trade in goods
like grain and agricultural products from India to the
