BUSINESS – TRADE AND COMMERCE
(CHAPTER1-MODULE1)
History of Trade and Commerce
Trade and commerce have played a vital role in making India as
a major actor in the economic word in ancient times
History of Trade and Commerce
Commercial cities like Harappa and Mohenjo-Daro were some
examples for the business development of ancient India
History of Trade and Commerce
These civilizations had established commercial
connections with Mesopotamia and traded in gold,
silver, copper, gemstones, beads, pearls, sea shells
etc.
History of Trade and Commerce
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
Indigenous Banking System
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
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 payment
Dhani-jog
Darshani
Sah-jog Payable to a specific person (someone respectable). Liability over who received the payment.
Firman-jog Payable to order
Dekhan-har Payable to the presented or bearer.
Dhani-jog Payable to any person – no liability over who received the payment, but payment over a fixed term.
Muddati
Firman-jog Payable to order following a fixed term.
Drawn against dispatched goods. If goods lost in transit, the drawer or holder bears the costs and the drawee carries no liability.
Jokhmi
Rise of Intermediaries
Intermediaries played an important role n the promotion of trade. They helped the
producers especially in foreign trade.
They consist of commission agents, brokers and distributors for wholesale
and retail of goods.
Transport
Land Transport and Water Transport were popular in Roads as a
means of transportation had assumed key importance in the
process of growth especially in inland trade
Eg: The northern trade route from Bengal to Taxila
Transport
Maritime trade was another important branch of global trade network
Muziris (ancient harbor) in Malabar Coast (near to the present-day
Cochin) has a long history of international maritime trade
Merchant Corporations
They were autonomous corporations (guilds) formed to protect
the interests of the traders
These corporations were organized on formal basis, framed their
own rules and code of conduct, which even kings were supposed to
accept and respect
Major Trade Centres
Pataliputra
Patna in Bihar today Commercial town and major centre for export of
stones
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
Taxila
City in Pakistan, also called Thakshashila
Popularly known as the city of financial and commercial banks
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)
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)
Varanasi City in UP
Well known centre for textile industries and became famous for gold silk cloth and
sandalwood workmanship
Mithila (City in Bihar)
The traders in this city crossed the seas by boats, through Bay of
Bangal to the South China
Ujjain (City in MP)
Different verities of clothes were exported to different centres.
Major Exports
and
Imports
Export Items:
Spices, wheat, sugar, indigo, opium, sesame oil, cotton, parrot, live animals
and animal products etc
Import Items:
Horses, animal products, Chinese silks, linen, wine, gold, silver,
copper, etc.
Position of Indian Subcontinent in World Economy
(1AD to 1991
India in World Economy
From 1st to 7th centuries, India was estimated to have the largest economy in the
world
The country was often referred as ‘Swarnabhumi’ and ‘Swarnadweep’ by many
writers and travelers like Megasthenes, Faxian (Fa Hien), Xuanzang (Huen
Tsang) etc. because of its prosperity
During 18th century, the British empire began to take roots in India, thereby the Indian
economic condition was slowly changed from being an exporter of processed goods to the
exporter of raw materials and buyer of manufactured goods
India begins to Reindustrialise
India begins to Reindustrialise
After independence, the process of rebuilding the Indian economy have been
started
As a part of this the first five year plan was implemented in 1952.
5 Year Plan
Due importance was given to the establishment of modern industries,
modern technological and scientific institutes, space and nuclear
programs
To overcome the problems of lack of capital, rise in population,
huge expenditure on defence, inadequate infrastructure etc.
India relied heavily on borrowings from foreign sources and
finally, agreed to economic liberalization in 1991
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
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