Chapter-1 (Evolution and Fundamentals of Business) History of Commerce in India

April 16, 2020

Good morning boys! I am Mrs Khanna, your Business Studies Teacher. This is a new subject for you. It is basically a theoretical subject. To achieve mastery over this subject, you need to focus on the concepts and there should be complete clarity of all the topics given in the chapter. There will be case studies in exam which will be based on various topics of the chapter. Also, application based questions will be there. First of all, we are starting Chapter-1 which is Evolution and Fundamentals of Business and our first topic is HISTORY OF COMMERCE IN INDIA. This is a very general topic. I am sending you the notes, you just copy that in your register. Except this topic, rest all topics are in question- answer form.

LEARING OBJECTIVES- At the end of the topic, students will be able to-
a) Understand the history of commerce in India.
b) Explain the variod types of Hundi.
c) List the export and import items of India.

HISTORY OF COMMERCE IN INDIA

Trade and Commerce have played a vital role in making India to evolve as a major sector in the economic world in ancient times. The period was marked by substantial commercial activities and urban development.

a)  Indigenous banking system -
-Money served as a medium of exchange,  so the introduction of metallic money and its use accelerated economic activities.
-Documents like Hundi were used for carrying out transactions in which money passed from hand to hand.

TYPES OF HUNDI.
a) Dhani-jog = It is payable to any person and there is no liability over who received payment but payment over a fixed term.
b) Sah-jog= It is payable to a specific person who is someone respectable. There is no liability over who received payment.
c) Firman-jog= Hundi made payable to order following a fixed term.
d) Dekhan- har= Payable to the presenter or bearer.
e) Jokhmi= It is drawn against dispatched goods. If goods lost in transit, the drawer or holder bears the costs and the Drawee carries no liability

Indigenous banking system played a prominent role in lending money and financing domestic and foreign trade with currency and letter of credit. Workshops were prominent where skilled artisans worked and converted raw materials into finished goods which were high in demand.

RISE OF INTERMEDIARIES

1) They played a prominent role in the promotion of trade. It comprised of commission agents, brokers and distributors both for wholesale and retail goods.
2) The emergence of credit transactions and availability of loans and advances enhanced commercial operations.
3) The Indian subcontinent enjoyed the fruits of favourable balance of trade where exports exceeded imports with large margins and indigenous banking system benefitted the manufacturers, traders and merchants with additional capital funds for expansion and development.

TRANSPORT
1) Transport by land and water was popular in ancient times.
2) Pepper was particularly valued in the Roman Empire and was known as Black Gold. For centuries, it remained the reason for rivalry and conflict between various empires and trade powers to dominate the route for this trade.

TRADING COMMUNITIES

1) Punjabi and Muttani merchants handled business in the northern region, while the Bhats managed the trade in the states of Gujarat and Rajasthan.
2) In western India, these groups were called Mahajan, Chatt were important traders from the South.
3) In urban centres, such as Ahmedabad the Mahajan community collectively represented by their chief called Nagarseth . Other urban groups included  professional classes.

MERCHANT CORPORATIONS

1) Trade and industry taxes were also a major source of revenue, traders had to pay octroi duties that were levied on most of the imported articles at varying rates. They were paid either in cash or in kind.
2) Custom duties varied according to the commodities.
3) The right to receive the labour tax was usually tranferred to the local bodies.
4) The commercial activity, enabled big merchants to gain power in the society.

MAJOR TRADE CENTRES
1) The leading trade centres in ancient India are as follows:
a) Pataliputra b) Peshawar c) Taxila d) Indraprastha e) Mathura f) Varanasi g) Mithila h) Ujjain i) Surat j) Kanchi k) Madura l) Broach m) Kaveripatta n) Tamralipti
2) Exports consisted of spices, wheat, sugar, indigo, opium, cotton, live animals, parrot and animal products like hides, skin, furs, horns, pearls, crystal, lapis, turquoise ans copper, etc.
3) Imports included horses, animal products, chinese silk, flax and linen, wine, gold, silver, tin, copper, lead, rubies, coral, glass, amber, etc.

Note- The Indian economy is one of the fastest growing economy in the world today and a preferred FDI destination.