In this article we will discuss about the Indian economy during the rule of Mughal emperors:- 1. Indian Economy under Mughals 2. Industry during the Rule of Mughal Emperors 3. Communication during the Rule of Mughal Emperors 4. Foreign Trade during the Rule of Mughal Emperors 5. The Village Community during the Rule of Mughal Emperors.


  1. Indian Economy under Mughals
  2. Industry during the Rule of Mughal Emperors
  3. Communication during the Rule of Mughal Emperors
  4. Foreign Trade during the Rule of Mughal Emperors
  5. The Village Community during the Rule of Mughal Emperors

1. Indian Economy under Mughals:

Before the advent of the British, Indian economy was in a state of equilibrium, though at a low level. Land was the most important source of national income, the vast majority of population being dependent on agriculture.


In order to absorb the growing population, cultivation had been gradually extended since Akbar’s times either through a system of inducements such as rewards and changes in the mode of assessment or through outright govt. pressure.

The importance of irrigation was understood as can be seen from the tanks and canals constructed by the Mughal rulers. Private works were, however, few and the Govt. as yet insufficiently realised the urgency of irrigation works. Therefore, agriculture, then as now, was a “gamble in monsoons”.

The principal food crops were the same as they are today, namely, wheat, rice, maize, millet etc., while commercial crops included indigo, cotton, sugarcane and silk. Tobacco was first grown in Gujarat early in the 17th century but, within a few years, its cultivation spread to all parts of the country.

Methods of cultivation were as underdeveloped as in Europe before 1750. However, they were based upon experience handed down from generation to generation and, according to Buchanan, nicely adapted to the conditions of the country.


During Akbar’s reign, 1/3 of 10 year’s average produce was fixed as the state revenue, payable in cash. Replacement of produce-rent by money-rent was an important development signifying the growth of money economy to a certain extent.

This method of assessment was applied in the case of land which was in continuous cultivation. However, in the case of land which, on occasions, remained fallow, full rent was collected only in the year of cultivation and no revenue was charged for the fallow period.

2. Industry during the Rule of Mughal Emperors:

In the words of the Indian Industrial commission, “when merchant adventurers from the west made their first appearance in India, the industrial development of this country was, at any rate, not inferior to that of the more advanced European nations”. There was a considerable variety of arts and handicrafts whose products commanded ready sale both in Indian and foreign markets.


According to Micheal Edwards, “the economic and financial organisation of these crafts was far advanced in comparison with Europe, and techniques of production already contained the specialisation of tasks-artisans working in groups on particular stages of manufacture”. Among the industries, cotton textiles was the most important.

There was hardly an important city where cotton cloth was not manufactured although muslins of Dacca, “the shadow of a commodity” were the finest and the best known. Next came the manufacture of silk cloth. Here too, Bengal figured prominently as the premier production centre although Agra, Patna, Benares, Ahmadabad and Poona were also famous.

In the second half of the 16th and the first half of the 17th century, Kasimbazar emerged as the most important weaving centre in the country. Silk from Kasimbazar was sent to Patna, Agra, Ahmedabad and Surat where it was made into special fabrics. The woolen industry also had a measure of importance.

Its shawls, manufactured in Kashmir and Amritsar, were greatly admired in European capitals. Other important in­dustries were Brass, Copper and Bell metal wares which were manufactured all over India. However, Benares, Tanjore, Madura, Ahmedabad and Poona were the most notable centres. Stone carving, artistic marble and wood work, jewellery formed other important crafts.

Artisans worked on their own account as well as in ‘Karkhanas’ under master craftsmen or merchants who set them to work on a wage-basis.

Even where they worked independently, craftsmen were dependent upon the merchant for direction as to what to produce, for capital and for marketing. Unable to ‘pay out’ the sums of money advanced, they were often caught in the grip of the middlemen who retained for themselves a large share of profits.

Production for courts was mostly carried on in royal workshops under su­pervision of a superintendent of arts and crafts. The Mughal Emperors made every effort to induce master craftsmen and workers in different arts and crafts to come to the State ‘karkhanas’ which offered the possibility of improvement in design and workmanship.

3. Communication during the Rule of Mughal Emperors:

As regards the state of communications, “there never was a country with people so intelligent and rich in which roads were so few and travel so difficult”. The Indus and the Ganges, along with their tributaries, were the only river systems that were navigable to any large extent.


In addition, there were a few ‘made roads’ also. That is why state of communication was not so bad in the North as it was in the South. However, most of the so called ‘made’ roads were just mud tracks having no bridges.

In the rainy season, these tracks remained out of use except for cattle or foot passengers. Over thousands of miles, wheeled carriage was unknown and goods could be carried for the most part on buffaloes, camels and pack bullocks at enormous cost.

The cotton of Nagpur and Amravati, for example, was brought for sale to Mirzapur, a distance of 500 miles, by oxen carrying 160 lbs. each travelling, on an average, 7 miles a day. The cost of carrying one ton in this manner was about £ 17-10.

In view of this prohibitive cost, carriage of cheap and bulky goods was almost impossible and internal trade was restricted to light and high-priced products. Another consequence was that prices varied from village to village. In one part, grain was valueless while a hundred miles off, there was scarcity and, still further beyond, famine raged.


A few trading centres such as Mirzapur, Benares and Patna in the East, Lahore and Multan in the North West, Surat on the West coast and Golconda in the Deccan were prominent as they served as important posts along trade routes.

4. Foreign Trade during the Rule of Mughal Emperors:

During the greater part of the Mughal period, India has an active and considerable foreign trade with different countries of Asia and Europe. Traders from all the world over visited her shores for trade in her manufactures.

In the words of Bal Krishna, “India was the respiratory organ for the circulation and distribution of moneys and commodities of the world; it was the sea wherein all the rivers of trade and industry flowed and thus enriched its inhabitants”.


Goods were carried either by the overland routes in the North-west through Lahore and Kabul to Central Asia or through Multan and Kandhar to Persia or by sea to the Persian gulf and Red sea-ports in the west and to the Indian Archipelago and spice islands in east. The chief ports were Lahori Bander and Surat in the west, Masaulipatam in the South, Chittagong, Satgaon and Sonargaon in the East.

India’s exports consisted of manufactures such as Calicoes, muslins, Silks and fancy goods and raw materials comprising indigo, Salt-petre, spices and pepper. Indian textiles, in particular, found extensive markets in the countries of Asia and Europe bearing “ample testimony to the adaptation by Indian weavers of quality and prices to the varied requirements, fashions and tastes of people, representing different cultures and stages of development from savages and slaves to kings, nobility and common people in different lands.”

India’s chief imports were gold, silver, precious stones, horses, metals, tobacco and African slaves.

The country always has a favourable balance of trade. The gap between exports and imports was made good by imports of bullion and precious stones. This feature of the Indian economy attracted widespread notice.

In the words of Terry, “many silver streams runne thither as all rivers to the sea, and there stay, it being lawful for any nation to bring in silver and fetch commodities, but a crime, not less than capital, to carry any great summe thence.”

In the 18th century, the dominant feature of India’s foreign trade was the ascendency of the East India Company. The exclusive privileges it secured from the Mughal Emperor in 1717 further reinforced its position. As though these privileges were not enough, European merchants practiced a regular system of piracy in the open seas against which there was no protection.


This seriously jeopardised the interests of Indian traders who turned either to usury or land. This was precisely the time when expansion of trade and accumulation of capital were powerfully operating to usher in the dawn of Industrial Revolution in England. In India, however, the loss of predominance in trade by the Indian merchant class checked the growth of capital and the development of capitalist enterprise.

5. Currency and Prices during the Rule of Mughal Emperors:

Since the time of Akbar, the units of currency had been the gold mohur and the silver rupee, both being equal in weight, and common measure of value which circulated without any fixed ratio of exchange between them. In south India, pagoda, the coin of ancient Hindu kings, was the standard of value and also the medium of exchange. It continued to be so till the time of the East India Company.

These coins, issued from various mints, situated even in the remotest corners of the country, did not materially deviate from the standard i.e. 175 grams troy. But, with the disruption of the Mughal Empire into separate kingdoms, branches of the Imperial Mint became independent factories for purposes of coinage.

The result was that the country was soon flooded with a bewildering variety of coins. It caused great inconveniences to the trading community and the Govt. provided an opportunity to defraud the poor and the ignorant but brought handsome profits to money-changers.

In the absence of good, efficient means of transport, price movements in each region were mostly determined by local factors. Thus, drought or famine caused prices to shoot up while rich harvests brought the prices down.


In Surat, for example, food-grain prices normally were much higher than in the North, whereas, in Bengal, rice, wheat, butter and oil were available at half the price prevailing in other provinces. All the same, the overall level of prices was low.

As regards the standard of living, the rich lived a life of case and comfort. In the big commercial centres, the merchants lived in elegant style, building for themselves comfortable and imposing houses, wearing costly dresses and their women-folk possessing plentiful jewellery. As for the common man, he had more and better food to eat than what he was to get in the 19th century.

Even Moreland admits that “butter (ghee) and seeds furnishing edible-oils were, relatively to grain, distinctly cheaper……… and in this respect, the lower classes were better off as consumers………. In grains, milk and ghee which form traditionally the larger part of diet in India, the 17th century was marked by conditions of plenty and cheapness.”

The per capita consumption of these commodities must, therefore, have been higher. It is quite likely that the average consumption of cloth, furniture and salt was less in the Mughal period than under the British.

As these form a far less significant part of the poor man’s family budget than food, it can be safely presumed that, till the beginning of the 18th century, India was economically better off than she was under the earlier part of British rule.

6. The Village Community during the Rule of Mughal Emperors:


The most outstanding feature of the Indian economy before the advent of the British was “the self-subsisting and self-perpetuating” character of the Indian villages. The village itself consumed most of the food-stuffs and other raw- materials produced within itself. Its needs for handicrafts were satisfied by the artisans living within the village.

The village community, within its domain, ad­ministered justice, settled land, divided occupations and distributed the produce of the land. In short, as Elphinstone” says, “these communities contained, in miniature, all the materials of a State within themselves, and were almost sufficient to protect their members if all other Govt. were with drawn.”

The village society was composed of the cultivating class, the artisans and menials. Almost every village possessed a blacksmith, a potter, a barber, a washer man, a shoe-maker, a weaver, and a dyer.

On the basis of method of payment, these artisans can be classified into two, viz:

(1) Village servants and

(2) The independent class.


Artisans such as the washer man, carpenter, potter and the black-smith, whose services were daily required by the community, belonged to the class of village servants. The obligation of remunerating them was borne by the village community as a whole which discharged it by permanently assigning to the artisans plots of land belonging to the community and by gift of a fixed measure of grain at harvest time.

The services of the independent class of artisans were required occasionally and they were paid by job but in kind. There was, thus, little scope for exchange and consequently the market was limited.

As regards arrangement of village lands, these were divided into three parts: areas set apart for habitation, for cultivation, and for pasture.

According to Dr. R.K. Mukerjee, the general principle was, “To each family a homestead and plot of arable land parceled out of the common soil, to the community the meadow and waste.” A point to note is that the individual family was the possessor and not the owner of the arable land which was the property of the village community.

As Maine explains, “there was ownership, but joint ownership by bodies of men was the rule, several ownership by individuals was the exception”. The family holding of the arable land was not allowed to be transferred either to another member family of the village or to any stranger.

In other words, under the village community system, land was never used as a commodity to be bought and sold. Crop or no crop, famine or prosperity, the arable land of the village stood there and none could take possession of another’s plot.

In such a system, there was little scope for the development of landholder-share-cropper or supervising- farmer agricultural-labourer relationship. As land was available in plenty, any member of the village community could get it to become self-possessing and self-working peasant. This basic production relation continued throughout the Mughal period.

The Mughal emperors did create nobles and settled territories on them. But these nobles, like the emperor himself, did not have any direct contact with the villages nor control over the peasants. They were merely the collectors of king’s revenue from the territories assigned to them. Therefore, the production relation, as represented by the self-possessing, self-working and self-sufficient cultivators, remained unaffected.

India was, thus, characterised by an aloofness from the outside world; it consisted of an immense number of entirely self-contained and self-supplying units with little contact with each other and practically no knowledge of the world outside. The towns were few and not very influential. They were, as Gadgil says, “almost as something apart from the general life of the country.”

This system gave a peculiarly compact form to the Indian village community and, for that reason, it was able to resist outside attacks. It was also good device for ensuring a regular supply of essential services in the village. It was, however, not free from defects. In the words of Karl Marx, “It was contaminated by distinction of caste and by slavery.” It also ensured against progress in the methods of the artisans.

To begin with, the artisan, who did all the miscellaneous duties connected with his occupation in the village, did not specialise and, therefore, division of labour was extremely limited.

The system also effectively protected the artisan from the pressure of external competition. A cultivator, for example, did not buy his tools from an outside carpenter even though his wares were superior. This absence of competition resulted in an absence of localisation of industry in India.

The political disintegration which followed the fall of the Mughal Empire adversely affected the economic life of the country. Trade and industry declined while agriculture languished. In the political field, short-sighted opportunism took the place of statesmanship; compromise of leadership; loyalty to the emperor gave ground to personal ambitions.

The same conditions prevailed in the intel­lectual and religious life. Islam still had its learned men but no new school of thought.

No new philosophic system and no new religious cult, like the Bhakti Movement of the 15th and 16th centuries, appeared within Hinduism either. In short, there was lack of hope and enterprise in the economic sphere, lack of purpose and vigour in the cultural field, while in the public affairs, there was a bewildering array of cross purposes.

There was energy, ability and intellect in abundance, but they were directed to mutually contradictory ends or wasted in sterile endeavors. To use a Chinese phrase, the signs were many that for the Mughals in India, the Mandate of Heaven was about to expire. And it did expire in 1757.

The Battle of Plassey, described by some as “a mere armed demonstration” and by others as an “imposing Red-coat drill of a few hours,” has a sure place in the history of both India and Britain. To the British, it was the victory which first set them upon the high road that ended with the conquest of whole of India. To the Indians, it is a symbol of their defeat and subsequent exploitation by foreign rulers.