India can lay claim to one of the world's oldest
civilizations, and its economic history is truly long
and complicated.
India's beginnings and pre-colonial times
The Indus Valley civilization, an urbanized society
that thrived between 2800 BC and 1800 BC, was
economically very sound. The city-states of Mohenjo,
Daro, and Harappa were well-planned and apparently
carried on a flourishing trade with other civilizations,
such as the Mesopotamians, Sumerians, and
Egyptians. Doing business with foreign countries is
nothing new to India.
Throughout India's early history, a number of empires
and dynasties rose and fell. Economically speaking,
the most notable dynasty was the Mauryas. They
united most of the subcontinent between 321 and
185 BC. The Mauryas established a common
currency, and trade flourished.
The Maurya dynasty owes its existence to a scholar-
politician named Chanakya, who wrote Arthasasthra, a
renowned book on the science of material gain . This
early economic whiz is still talked about today.
The Mauryas introduced the world to Indian products
like muslin, calico, pashmina shawls, and exotic
spices. These commodities continue to be hot-ticket
items in the world of trade more than 2,000 years
later.
After centuries of rule by various groups, India was
visited by Portuguese explorer Vasco de Gama in
1498. An influx of Europeans, including the Dutch,
French, and British, continued until the 17th century,
when the British East India Company established
itself in the country, setting in motion a chain of
events that resulted in India's inclusion in the British
Empire.
Colonial India: Under the Union Jack
From the self-sustaining, village-centric economy it
had followed in ancient times, the land had gradually
moved to new and different market systems. Many
rulers minted their own currency, and no common
monetary system existed in the subcontinent. Trade
was based on barter or on the exchange of goods for
precious metals.
The British soon changed things. When the British
came to India, they found a traditional rural economy
driven by a strong commercial network, but it was
hampered by poor technology. So they introduced
infrastructure — including road and rail networks —
set up factories and communication systems to
facilitate trade and commerce, and created a uniform
currency. Trade prospered, but the balance was
decidedly skewed.
The assets of the British East India Company
became so huge that the British government decided
to step in. India was made a colony, and Queen
Victoria was named Empress of India. From a small
trading outpost, India became the jewel in the British
crown.
But the focus of the British was on exploiting the
resources of India for its own material gain; India
itself was unable to benefit from the many
opportunities that opened up in the changing world
order. The country remained economically backward,
fettered by poverty, illiteracy, and disease. The
partition of the land into the two nations of Pakistan
and India added to the burdens of an already
impoverished country.
When India gained its independence in 1947, it was
one of the world's poorest economies. Sixty years
after independence, all that is history.
civilizations, and its economic history is truly long
and complicated.
India's beginnings and pre-colonial times
The Indus Valley civilization, an urbanized society
that thrived between 2800 BC and 1800 BC, was
economically very sound. The city-states of Mohenjo,
Daro, and Harappa were well-planned and apparently
carried on a flourishing trade with other civilizations,
such as the Mesopotamians, Sumerians, and
Egyptians. Doing business with foreign countries is
nothing new to India.
Throughout India's early history, a number of empires
and dynasties rose and fell. Economically speaking,
the most notable dynasty was the Mauryas. They
united most of the subcontinent between 321 and
185 BC. The Mauryas established a common
currency, and trade flourished.
The Maurya dynasty owes its existence to a scholar-
politician named Chanakya, who wrote Arthasasthra, a
renowned book on the science of material gain . This
early economic whiz is still talked about today.
The Mauryas introduced the world to Indian products
like muslin, calico, pashmina shawls, and exotic
spices. These commodities continue to be hot-ticket
items in the world of trade more than 2,000 years
later.
After centuries of rule by various groups, India was
visited by Portuguese explorer Vasco de Gama in
1498. An influx of Europeans, including the Dutch,
French, and British, continued until the 17th century,
when the British East India Company established
itself in the country, setting in motion a chain of
events that resulted in India's inclusion in the British
Empire.
Colonial India: Under the Union Jack
From the self-sustaining, village-centric economy it
had followed in ancient times, the land had gradually
moved to new and different market systems. Many
rulers minted their own currency, and no common
monetary system existed in the subcontinent. Trade
was based on barter or on the exchange of goods for
precious metals.
The British soon changed things. When the British
came to India, they found a traditional rural economy
driven by a strong commercial network, but it was
hampered by poor technology. So they introduced
infrastructure — including road and rail networks —
set up factories and communication systems to
facilitate trade and commerce, and created a uniform
currency. Trade prospered, but the balance was
decidedly skewed.
The assets of the British East India Company
became so huge that the British government decided
to step in. India was made a colony, and Queen
Victoria was named Empress of India. From a small
trading outpost, India became the jewel in the British
crown.
But the focus of the British was on exploiting the
resources of India for its own material gain; India
itself was unable to benefit from the many
opportunities that opened up in the changing world
order. The country remained economically backward,
fettered by poverty, illiteracy, and disease. The
partition of the land into the two nations of Pakistan
and India added to the burdens of an already
impoverished country.
When India gained its independence in 1947, it was
one of the world's poorest economies. Sixty years
after independence, all that is history.
