Chapter – 1
Introduction
BUSINESS, TRADE & COMMERCE
All human beings require different types of goods and services to satisfy their needs.
The necessity of supplying goods and services has led to certain activities being
undertaken by people to produce and sell what is needed by others. Business is a
major economic activity in all modern societies as it is concerned with the production
and sale of goods and services to the needy people.
History of Trade and Commerce
Trade and commerce have played a vital role in making India to evolve as a major
actor in the economic word in ancient times. Commercial cities like Harappa and
Mohenjodaro were some examples for the business development of ancient India.
These civilizations had established commercial connections with Mesopotamia and
traded in gold, silver, copper, gemstones, beads, pearls, sea shells etc. There were
different types of coins and weighing practices during that time.
Indigenous Banking System
As economic life progress, metallic money had been introduced which in turn
accelerated the economic activities. Documents such as Hundi and Chitti were in
use for carrying out transactions in which money passed from hand to hand.
Hundi as an instrument of exchange, it involved a contract which warrant the
payment of money, the promise or order which is unconditional and capable of
change through transfer by valid negotiation.
Indigenous banking system played a prominent role in lending money and financing
domestic and foreign trade with currency and letter of credit. With the development
of banking, people began to deposit precious metals with lending individuals
functioning as Bankers or Seths.
Hundies practiced by Indian Merchant Communities
Name of Hundi Category Function
Payable to any persons – no liability over who received the
Dhani-jog
payment
Darshani Payable to a specific person (someone respectable). Liability
Sah-jog
over who received the payment.
Firman-jog Payable to order
Dekhan-har Payable to the presented or bearer.
Payable to any person – no liability over who received the
Dhani-jog
payment, but payment over a fixed term.
Firman-jog Muddati Payable to order following a fixed term.
Drawn against dispatched goods. If goods lost in transit, the
Jokhmi drawer or holder bears the costs and the drawee carries no
liability.
Major Trade Centres
1. Pataliputra – Patna in Bihar today. Commercial town and major centre
for export of stones.
2. Peshawar – City in Pakistan. Very popular for export of wool and for the
import of horses. Major transactions between India, China and Rome in the
first century.
3. Taxila – City in Pakistan, also called Thakshashila. Popularly known as the
city of financial and commercial banks.
4. Indraprastha – Located in the region of present-day New Delhi. It was a
commercial junction where most routes leading the east, west, south and
north converged (joined).
5. Mathura – City in UP. It was an emporium of trade and people here
subsisted (lived) on commerce. Many routes from South India touched
Mathura and Broach (Bharuch in Gujarat).
6. Varanasi – City in UP. Well known centre for textile industries and became
famous for gold silk cloth and sandalwood workmanship. It had links with
Taxila and Bharuch.
7. Mithila – City in Bihar. The traders in this city crossed the seas by boats,
through Bay of Bangal to the South China. They established trading colonies
in South China.
8. Ujjain – City in MP. Different verities of clothes were exported to different
centres. It had trade connections with Taxila and Peshawar.
9. Surat – City in Gujarat. It was an emporium of western trade during
Mughal period. They were also famous for gold boarder sarees.
10. Kanchi – Present day Kanchipuram in Tamil Nadu. Chinese came here to
purchase pearls, glass and rare stones and in return they sold gold and silk.
11. Madura – City in Tamil Nadu. It was the capital city of Pandya dynasty who
controlled the trade of pearl and fisheries of the Gulf of Mannar (shallow in
between India and Sri Lanka).
12. Broach –Present day Bharuch in Gujarat. It was a major trade centre in
Western India.
13. Kaveripatta –Present day Kaveripattanam in Tamil Nadu. It was scientific in
its construction as a city and provided loading, unloading and strong facilities
of merchandise. It was also famous for perfumes, cosmetics, scents, silk,
wool, cotton and also for ship building.
14. Tamralipti –City in West Bengal (Kolkata). It was one of the greatest ports
connected both by sea and land. It was linked by road to Banaras (UP) and
Taxila.
Major Exports and Imports
Spices, wheat, sugar, indigo, opium, sesame oil, cotton, parrot, live animals and
animal products were the major export items, whereas import items include horses,
animal products, Chinese silks, linen, wine, gold, silver, copper, etc.
The Indian economy is one of the fastest growing economies in the world today.
The high growth sectors have been identified, which are likely to grow at a rapid
pace and the recent initiatives of the Government of India such as ‘Make in India’,
‘Skill India’, ‘Digital India’, Foreign Trade Policy 2015-20 etc. is expected to help the
economy in terms of exports and imports and trade balance.