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Inland Trade and Commerce in Mughal India: Structure

and Organization
Trade in Mughal India was a multi-tiered system at the rural and
urban centres fully integrated on a Pan-Mughal Indian scheme. Even
though the majority of the population lived in the villages, there was a
brisk exchange of goods in Mughal India. Even though exchange
accounted for a relatively small proportion of economic activity, the
economic life was impressive in its magnitude and complexity. The
creation of a Pax Mughalica facilitated the movements of goods from
one part of the country to the other without restrictions. The
commonality of the legal structure, fiscal institutions and the brilliant
infrastructural back up given by the Mughal state activised trade and
commerce in India at that time.
Intra-Local Trade in Villages and Towns
The rural market exhibited pictures of intra-local trade. The
Mughal villages were self-sufficient and that Tavernier had commented
that even 4000 pilgrims can travel in Mughal India without any prior
arrangements for food. Villages had two to three market days in a
week. There were ‘bazars’ (retail markets) and ‘mandis’ (wholesale)
markets in the country side.
The intra-local trade of the towns and cities was necessarily more
complex and varied that of the villages. Most major towns had several
markets or bazaars. One of such market was a big bazaar, like Surat.
Surat is described as a terrestrial paradise. It was a crowded market
with a city gate in the outskirts. There was a multitude of textile
merchants in that city, who traded in different types of clothes.
Ovington remarked that was difficult to pass through the vast
multitude of traders in Surat. Similarly Hughli and Agra were also
great urban markets with every variety of items. Since most of the
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items sold in such urban centres were products of other places, the
bulk of the urban commerce was inter-local rather than intra-local.
Inter-regional Trade
Predominantly, the flow of commodities from the villages to the
towns was a one-way process. Because of the splendid production of
food grains, the abundant villages were able to sustain the urban
population. In the villages it was a customary arrangement that they
exchanged their products among themselves. Due to the heavy
demand from the urban centres, there was a strong supply of food
materials in this inter-local trade. Bombay, with a population of
60,000 received its food grain supply from the countryside. Even
during famines, it is reported that there was food supply.
The Merchants
The Indian merchants were well organised and highly
professional. They can be broadly classified into big merchants,
independent traders and small merchants. Seth, bohra or modi
specialised in long distance and inter-regional trade. Becoparis or
banik were the local retail traders. Coming between, the merchants
were the dalals (commission agents) who acted as link between buyers
and sellers. The European companies depended much on this class.
In Bengal, there were government dalals.
Big Merchants
Usually the entrepots and port town had very rich merchants.
Virji Vohra, the wealthiest of the times dominated Surat trade for a very
long time. He owned a large fleet of ships. Medul Ghafur Bohra left 55
lakh rupees in cash and goods and a fleet of 17 sea going ships at the
time of his death in 1718. Similarly Malay Chetty of the Coromandel
coast, Kashi Niranma and Sunca Rama Chatti were reputed to be
extremely wealthy and had extensive commercial dealings in India and
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abroad. There were many wealthy merchants at Agra, Balasore, Delhi

and Bengal. Some of them lived in great pomp and splendour like
nobles. Among these big merchants there were big bankers and
financiers like Manikchand. The wealthiest merchants had rapport
with the political elite and their fortunes were also short-lived due to
political reasons.
Independent Traders
In the second tier we can see the independent traders. They had
their own capital investments. They operated on limited commodities
in a limited geographical area. They also employed agents for their
trade.
Small Merchants
Those merchants who did business for substance earnings were
the small merchants. In Mughal India, they co-existed with the big
merchants. They traded in milk, butter, rice and vegetables.
Sometimes, the Mughal peasant himself became a small merchant.
The Banjaras or the Cargo Movers
The special class of traders who specialised in carrying, bulk
goods were the ‘banjaras’. They used to move long distances with
goods assigned to them through the land. They transported food items
and other items like textiles and silk. They had ‘tandas’ (camps) of
thousands of carrying animals, bullocks, camels and horses. The
Banjaras who organized transport of food stuff by land on pack-ocean
had in their larger camps or ‘tandas’ anything between 12,000 and
20,000 bullocks capable of carrying 1600 to 2700 tons. The bullocks
were able to cover 20 miles a day in great speed. Besides catering to
regular supply, they supplied the imperial army during user times.
With ‘banjaras’ the Mughal trade could deal with sudden increases in
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demand. Sometimes the ‘banjaras’ themselves traded in corns, pulses,

rice and meat.
The ‘banjaras’ were a heterogenous group. When the load was
heavy the ‘banjaras’ struck and they also met with casualties on the
way. For them it was very difficult to get animals during draught
seasons. Sometimes the ‘banjaras’ quarrelled and fought among
themselves. Even though the roads were not in good condition there
were a number of bridges made with bricks / stones and boats. In
addition to bullocks, camels and horses, elephants were used to carry
goods in Kashmir.
The Sarais
For the comfort and rest of the long distance traders the Mughal
state had a number of ‘Serais’ on high ways. Shershah Sur had built
1700 Serais in his empire. Even then traders complained about the
inadequacy of ‘Serais’ in many routes. A big Serai could accommodate
800-1000 persons built their carts and horses. The ‘Serais’ varied in
the comforts and luxuries offered. Some of the best had many rooms,
verandhas and even open spaced with trees inside them. It contained
provision store for the travelling merchant to cook food. Security was
provided in the best Serais. The foreign traders could stay for months
in such ‘Serais’ after paying rents. Some of the ordinary ‘Serais’ had
huts inside them. The traders were allowed to cook food inside such
Serais.
The Markets
Despite the divergent and brisk inland trade and trade routes,
the scale of markets in Mughal India was small by modern standrards.
It had two functions:
i. It brought together commodities for the local buyer, and
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ii. For the distribution to consumers (buyers) in far off places. The
markets can be classified into four types in a hierarchical order.
They were emporias for long distance trade like Agra, Surat,
Hughli, Lahore and Burhampur. They were again surrounded by
other minor port towns and cities. The emporias were again
subdivided into three, i.e., for
i. Purely city customers,
ii. Wholesale for bazaars, retailers and inter-regional commerce and
iii. A whole sale forward market. In the second category came the
small scale bazaars and ‘mandis’ or wholesale markets. In the
third section comes the periodic trade fairs of specialised traders
and consumers. In the last category they had the rural markets.
The Dadni System
Apart from direct purchases and purchase through ‘dalals’, a
system had come into practice in Mughal India called the ‘dadni’
system. It was an advance contract system for purchase of
commodities. The system became active with the spreading of the
European companies. This system enabled the desire of a trader to
corner a part of the purchasing market. Some commodities like calicos
and European goods were not procurable without the ‘dadni’ system.
But dadni system was not applicable to big merchants like virj. Vohra
and Kasi Viranna who out rightly purchased the goods from an entire
village, be it textile or pepper.
Credit and Financing
On a simultaneous plane there developed in Mughal India a
network of private banking and financing firms? Some of these firms
were owned and run by big merchants like Virji Vohra and Gafur. The
great financiers of the time were the Jagath Seths. The most
characteristic credit institution in India was the ‘hundi’ (also known as
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‘hundawis’ or bill of exchange or a letter of credit promising payment

“after a specified period of time” at a discount. This was an easy
transmission of money from one part of the country to another. It also
included insurance coverage for the goods. As a market in this fully
saleable hundis developed, they provided a channel for investments.
This hundi business was mainly in the hands of the Saraffs or Shroffs;
the professional money changers. The Saraffs later on became
commercial bankers, providing a specialised service as suppliers of
credit.
The ‘Shroffs’ later developed themselves into big bankers. They
engaged in deposit banking with an interest rate of 7½ percent per
annum. They provided big advances to big merchants. Deposits were
accepted by the Shroffs in kind and cash. Even government officials
invested with the Shroffs in Mughal India. During the Shahjahan reign
even Government provided loans to the merchants. The Jagath Seths
the great financiers of the time had the patronage of the Mughal ruler.
At the lower level, the ‘mahajans’ and the ‘Sahu’ provided credit for the
small merchants. The peasants and the local traders also borrowed
money from these money lenders.
Trade Routes
Water ways: The Mughal trade was further facilitated through a
network of waterways and land routes. The trade in food grains in the
interregional scale was done through waterways. It was a cheaper
means of transport and considerably reduced the charges of transport
of essential items. It also facilitated the movement of export goods on a
cross country basis. The main riverine routes were through the
Ganges, Indus and the Yamuna and their tributaries. The Ganges
linked Allahabad to Rajmahal via Benarese and Patna. Its tributaries
linked the interior areas with the main land. Yamuna in the west
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linked Allahabad to Agra. In the North-west, the Indus especially

catered to the needs of regions in an around Lahore and Multan. Later
on the river became non-navigable.
Land routes
From Agra to Patna the land route followed the riverside.
Another important route linked Benarese with Patna. Bengal was
connected with Balasore in Orissa via Midnapur, Karim bazaar,
Rajmahal and Monghligr to Patna. In North-West – trade route from
Agra linked up with Kandahar via Delhi, Lahore and Kabul between
Gujarat and N. India. There were two main routes. The first one linked
Surat with Agra. The second passed through Malwa and Khandesh
through Gwalior, Ujjain and Burhampur.’ Surat was linked with
Aurangabad and later to Mausilipatam. There was also road
connectivity between Goa and Golconda and Goa and Bijapur.
What do these Routes Mean?
These trade routes suggest an elaborate infrastructure which
facilitated the growth of an integrated market covering many areas in
India – Rajasthan, Bengal, Malvas, Gujarat, Kabul and Deccan. The
trade with the interior regions were facilitated through the branch
roads. All these do not suggest the establishment of a national market
but do suggest brisk trade on a pan – India level. The strong
inter-regional trade further boosted foreign trade.
These trade routes, land and riverine indicate the lazy movement
of commodities from one region to the other in India. Consequently
coromandel coast had active trade with the west coast, Gujarat, Deccan
and the north via Burhampur. Bengal goods reached all parts of the
country. Gujarat while effectively supplied textile to other parts
including Bengal received back food grains in plenty. Punjab and Sind
through their integrated trade network with Indus delivered its goods at
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Kabul, Kandahar, Delhi, Agra and Surat Malbar. Pepper reached

important destinations in India. Contextually the advancement in the
inland trade greatly increased the volume of foreign trade through the
port cities.
The Price Factor
According to Moreland the commodity prices, remained stable
down to the 1660’s. There was change only in the prize of copper and
silver, copper going up and silver coins down. Recent research shows
that the findings of Moreland are wrong. Together in the increase of
prices of silver and copper, the prices of food grains too shot up during
this period. There were also inter regional price variations. For eg: the
price of wheat in Agra and Gujarat differed. This might have been
caused due to the heavy cost of transport. The price change in Mughal
India can be ascribed to real economic factors, stimulates agricultural
production, intensive urbanisation and increase in population.
A Critical Evaluation
The political stability offered by the Mughal rule, the increased
agricultural productivity of multiplicity of food crops and cash crops,
the monetisation of the economy together with the new banking and
financial agents, the spending infrastructural facilities and the
transport network and all have contributed in their respective ways to
the development of trade and commerce in India during the Mughal
rule. Fragmented markets co-existed and interacted with integrated
systems of exchange encompassing this sale continent as did pedlars
with merchant princes. The organization of trade at all levels was
sophisticated and complex. Trade, both inland and foreign prospered
side by side with. The volume of trade always marked an upward
trend. In short the world of inland commerce, like its counterpart in
manufacture was complex, vigorous and even changing. The
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increasing demands of commerce, inland as well as overseas, were met

comfortably within the existing structures of trade and manufactures.
The countries commercial organization was so impressive and
accommodated the changing needs of the time well within its structure.