TRANSOCEANIC TRADE

 It is beyond doubt that the Indian merchants had trade monopoly in the Indian Ocean during the sixteenth and seventeenth century. It was only in the eighteenth century that Indian shipping and the trade in the Indian Ocean declined to make way for European traders.

On the whole the trade in the Indian Ocean remained firmly in the hands of Indian shipping merchants with only occasional uncertainty particularly in the sixteenth and seventeenth century. Several factors worked towards vitality (power) of Indian shipping:

The higher freight rates (transport charges on goods) charged by the Europeans – The European rates were double that charged by Indian owners.

Indian merchants preferred to stick to the ships owned by men of their own community.

It was a practice of Indian freighters to divide their risk by distributing their freight (goods).

Indian merchants were occasionally embarrassed by private demands made by European naval officers, which was not known to the companies.

Thus, though European ships were better sailed and better protected, over the entire period it made no significant difference.

Not interested in ship owning – The Indian merchants did not invest more in ship owning because it was felt that substantial part of capital was locked into it and the return on it was also poor, where as the profit in the trade was 20% more. Indian merchants did not own more than one or two ships however rich they might be.

Indian merchants who travelled across the sea fell into three different economic categories. They were:

Substantial merchants – who travelled in style with their valuable cargoes and obtained special treatment on board as well as in the Indian ocean ports.

There were merchants who travelled as agents of their principles who were not on board, because they were managers of their business at home or were travelling elsewhere i.e., the Nakhoda on board of an Indian vessel.

Small merchants who provided ships with majority of its passengers.

Men who travelled purely as agents (representatives) of other merchants earned only commission. These small merchants were looked down upon by the rich and influential merchants.

The people on the Indian vessel reflected the nature of the Indian society and in particular the nature of overseas trade. Merchants interested in foreign trade were small men who invested little and profited less, but were never driven out of business. Overseas trade at large was a merciless world leading to competition and degenerating into rivalries.

The social and economic structure supporting Indian overseas trade was based on cooperation and conciliation. The ship owner merchant relied on merchants and brokers specialized in supplying a port with specific commodities. Bigger the business, larger was such reliance upon the intermediaries and there was no difference between an Arab, Persian, Indian or European.

The Indian overseas merchants did not enjoy the patronage of the state.

They lived in a competitive world. Instances of Hindus and Muslims working together in close business relationships were common but the main tendency was to keep business confined within one community for the reason that disputes arising in the course of business could be solved through social consensus.

Gujarati Muslim ship owners were interested in preserving the freedom of high seas navigation bitterly opposed to Portuguese penetration. Hindu merchants on the other hand were less hostile and cooperated with the Portuguese. The Portuguese were inclined to cooperate with the Indians because the trade with the Indian ports was important for Portuguese establishments in their commerce with Europe.

Trade in the 17^th century – By the last decade of the seventeenth century there were significant changes in the European commercial activity and there was a growth in trade between Indian Ocean and outside world. There was an increase in the flow of gold and silver from America and rising demand in Europe and America for large quantities of Indian goods for consumption.

Commercial Revolution – During the eighteenth century there was a commercial revolution in the Indian Ocean. The British dominated major trade routes in the Indian Ocean and established a major territorial empire on the shores of South Asia. The revolution was based on cotton textile, opium, and Chinese tea.

The bulk trade in South Asian cotton textiles and Chinese tea brought about a major chance in the economic relationship between Europe and Indian Ocean resulted into opening of Suez Canal in 1869. Goods from British India were sold in China, cargoes of Indian cloth and Sumatra pepper along with slaves from East Africa found profitable markets in the USA. By the twentieth century the raw materials and manufacturers of India and other countries of the region traded round the world.