Indian Heritage in Business, Management, Production and Consumption

India was the one of the largest economies in the world, for about two and a half millennia starting around the end of 1st millennium BC and ending around the beginning of British rule in India.

Around 500 BC, the Mahajanapadas minted punch-marked silver coins. The period was marked by intensive trade activity and urban development. By 300 BC, the Maurya Empire had united most of the Indian subcontinent except Tamilakam, which was ruled by Three Crowned Kings, who were allies of Mauryas. The resulting political unity and military security allowed for a common economic system and enhanced trade and commerce, with increased agricultural productivity.

The Maurya Empire was followed by classical and early medieval kingdoms, including the Cholas, Pandyas, Cheras, Guptas, Western Gangas, Harsha, Palas, Rashtrakutas and Hoysalas. The Indian subcontinent had the largest economy of any region in the world for most of the interval between the 1st century and 18th century. Though it is to be noted that, up until 1000 AD,its GDP per capita was higher than subsistence level.

India experienced per-capita GDP growth in the high medieval era during the gupta empire and, during the Delhi Sultanate in the north and Vijayanagara Empire in the south, but was not as productive as Ming China until the 16th century. By the late 17th century, most of the Indian subcontinent had been reunited under the Mughal Empire, which became the largest economy and manufacturing power in the world, producing about a quarter of global GDP, before fragmenting and being conquered over the next century. Bengal Subah, the empire’s wealthiest province, that solely accounted for 40% of Dutch imports outside the west, had an advanced, productive agriculture, textile manufacturing and shipbuilding, in a period of proto-industrialization.

By the 18th century, the Mysoreans had embarked on an ambitious economic development program that established the Kingdom of Mysore as a major economic power. Sivramkrishna analyzing agricultural surveys conducted in Mysore by Francis Buchanan in 1800-1801, arrived at estimates, using “subsistence basket”, that aggregated millet income could be almost five times subsistence level. The Maratha Empire also managed an effective administration and tax collection policy throughout the core areas under its control and extracted chauth from vassal states.

The Indus Valley Civilisation, the first known permanent and predominantly urban settlement, flourished between 3500 BCE and 1800 BCE. It featured an advanced and thriving economic system. Its citizens practised agriculture, domesticated animals, made sharp tools and weapons from copper, bronze and tin, and traded with other cities. Evidence of well-laid streets, drainage systems and water supply in the valley’s major cities, Dholavira, Harappa, Lothal, Mohenjo-daro and Rakhigarhi, reveals their knowledge of urban planning.

Along with the family- and individually-owned businesses, ancient India possessed other forms of engaging in collective activity, including the gana, pani, puga, vrata, sangha, nigama and Shreni. Nigama, pani and Shreni refer most often to economic organisations of merchants, craftspeople and artisans, and perhaps even para-military entities. In particular, the Shreni shared many similarities with modern corporations, which were used in India from around the 8th century BCE until around the 10th century CE. The use of such entities in ancient India was widespread, including in virtually every kind of business, political and municipal activity.

The Shreni was a separate legal entity that had the ability to hold property separately from its owners, construct its own rules for governing the behaviour of its members and for it to contract, sue and be sued in its own name. Ancient sources such as Laws of Manu VIII and Chanakya’s Arthashastra provided rules for lawsuits between two or more Shreni and some sources make reference to a government official (Bhandagarika) who worked as an arbitrator for disputes amongst Shreni from at least the 6th century BCE onwards. Between 18 and 150 Shreni at various times in ancient India covered both trading and craft activities. This level of specialisation is indicative of a developed economy in which the Shreni played a critical role. Some Shreni had over 1,000 members.

The Shreni had a considerable degree of centralised management. The headman of the Shreni represented the interests of the Shreni in the king’s court and in many business matters. The headman could bind the Shreni in contracts, set work conditions, often received higher compensation and was the administrative authority. The headman was often selected via an election by the members of the Shreni, and could also be removed from power by the general assembly. The headman often ran the enterprise with two to five executive officers, also elected by the assembly.

India experienced deindustrialisation and cessation of various craft industries under British rule, which along with fast economic and population growth in the Western world, resulted in India’s share of the world economy declining from 24.4% in 1700 to 4.2% in 1950, and its share of global industrial output declining from 25% in 1750 to 2% in 1900. Due to its ancient history as a trading zone and later its colonial status, colonial India remained economically integrated with the world, with high levels of trade, investment and migration.

The Republic of India, founded in 1947, adopted central planning for most of its independent history, with extensive public ownership, regulation, red tape and trade barriers. After the 1991 economic crisis, the central government began policy of economic liberalisation. While this has made it one of the world’s fastest growing large economies.

Economy in the Indian Subcontinent performed just as it did in ancient times, though now it would face the stress of extensive regional tensions. Like earlier, the economy of Indian Subcontinent in medieval era was also performing in disparate units, limits of which were determined by multiple political entities which existed during this period. India during this era had multiple and divergent political units in form of Mughal Empire, Maratha Empire, Vijayanagara Empire, Ahom kingdom and several others which were all prosperous in the early 18th century. Parthasarathi estimated that 28,000 tonnes of bullion (mainly from the New World) flowed into the Indian subcontinent between 1600 and 1800, equating to 30% of the world’s production in the period.

An estimate of the annual income of Emperor Akbar’s treasury, in 1600, is $90 million (in contrast to the tax take of Great Britain two hundred years later, in 1800, totaled $90 million). The South Asia region, in 1600, was estimated to be the largest in the world followed by China.

During the time of Akbar, the Mughal Empire was at its peak as it controlled vast region of North India and had entered into alliances with Deccan States. It enforced a uniform customs and tax-administration system. In 1700, the exchequer of the Emperor Aurangzeb reported an annual revenue of more than £100 million, or $450 million, more than ten times that of his contemporary Louis XIV of France, while controlling just 7 times the population.

By 1700, the Indian Subcontinent had become the world’s largest economy, ahead of Qing China and Western Europe, containing approximately 24.2% of the World’s population, and producing about a quarter of world output. India produced about 25% of global industrial output into the early 18th century. India’s GDP growth increased under the Mughal Empire, exceeding growth in the prior 1,500 years. The Mughals were responsible for building an extensive road system, creating a uniform currency, and the unification of the country. The Mughals adopted and standardized the rupee currency introduced by Sur Emperor Sher Shah Suri. The Mughals minted tens of millions of coins, with purity of at least 96%, without debasement until the 1720s. The empire met global demand for Indian agricultural and industrial products.

Manufacturing

Until the 18th century, Mughal India was the most important manufacturing center for international trade. Key industries included textiles, shipbuilding and steel. Processed products included cotton textiles, yarns, thread, silk, jute products, metalware, and foods such as sugar, oils and butter. This growth of manufacturing has been referred to as a form of proto-industrialization, similar to 18th-century Western Europe prior to the Industrial Revolution.

Early modern Europe imported products from Mughal India, particularly cotton textiles, spices, peppers, indigo, silks and saltpeter (for use in munitions). European fashion, for example, became increasingly dependent on Indian textiles and silks. From the late 17th century to the early 18th century, Mughal India accounted for 95% of British imports from Asia, and the Bengal Subah province alone accounted for 40% of Dutch imports from Asia.[8] In contrast, demand for European goods in Mughal India was light. Exports were limited to some woolens, ingots, glassware, mechanical clocks, weapons, particularly blades for Firangi swords, and a few luxury items. The trade imbalance caused Europeans to export large quantities of gold and silver to Mughal India to pay for South Asian imports. Indian goods, especially those from Bengal, were also exported in large quantities to other Asian markets, such as Indonesia and Japan.

The largest manufacturing industry was cotton textile manufacturing, which included the production of piece goods, calicos and muslins, available unbleached in a variety of colours. The cotton textile industry was responsible for a large part of the empire’s international trade. The most important center of cotton production was the Bengal Subah province, particularly around Dhaka. Bengal alone accounted for more than 50% of textiles and around 80% of silks imported by the Dutch. Bengali silk and cotton textiles were exported in large quantities to Europe, Indonesia Japan, and Africa, where they formed a significant element in the exchange of goods for slaves, and treasure. In Britain protectionist policies, such as 1685-1774 Calico Acts, imposed tariffs on imported Indian textiles.

Mughal India had a large shipbuilding industry, particularly in the Bengal Subah province. Economic historian Indrajit Ray estimates shipbuilding output of Bengal during the sixteenth and seventeenth centuries at 223,250 tons annually, compared with 23,061 tons produced in nineteen colonies in North America from 1769 to 1771.