Introduction

Economic Benefits of the Empire

For hundreds of years, India contributed immensely to world GDP (between 1 A.D to 1600 A.D, 25-30 % of the World's GDP was Indian). As mentioned by Adam Smith in "The Wealth of Nations," the commodities traded from India were from the wealthiest and most fertile lands, the best cultivated, most industrious, and most populous country in the world.

The Mughal Empire (1526-1757) comprised the most fertile lands and, for 300 years, was one of the respected and most powerful empires in the world. The major commodities produced and traded were spices, silk, muslin and fine handlooms, cotton, dyes, salt, tea and opium. After the Battle of Buxar (1764), the British East Indian Company managed to use the opium trade to save them from a massive trade deficit vis-a-vis China. By the 17th century, opium was an important source of income for the Mughal Empire. The British then cultivated poppy in Bengal, Bihar and Malwa and built efficient factories for export of purified opium to China which later became an immense economic and social burden for the Chinese during the 18th and 19th centuries.

Soon company agents dominated internal trade in India and, with the decline of markets in west Asia, the popularity of Indian raw cotton and opium in China, Japan, and Southeast Asia, encouraged English private traders to look to the east for trading opportunities. The Parsi merchants profited immensely from this opium trade and the Parsi commercial firms built their fortunes in China based on the opium trade. British and Parsi traders soon dominated internal and export trades.