Business, Trade and
Commerce
A RT I N T E G R AT E D P R O J E C T
• All Human beings have different types of
needs. To fulfill these needs, they
perform certain activities.
• Business is a major economic activity as it is
Introduction concerned with the production and sale of
goods and services with the purpose of earning
money by meeting people’s demands for goods
and services.
• Indian subcontinent has Himalayas in the North
and bordered by water in the South.
• Silk Routes, a network of roads helped in
establishing commercial and political contacts
History of Trade with adjoining foreign kingdoms and empires of
Asia and the world.
and Commerce • With the help of wealth earned through trade, the
chief kingdoms, important trade centres and the
industrial belt flourished that helped ancient India
in progress of domestic and international trade.
Indigenous Banking System
• Metals came to be used as money as the economic life of the
people progressed as they are durable and divisible. This
Accelerated economic activities.
• Documents such as Hundi & Chitti were in use for carrying
out transactions in which money passed from hand to hand.
• Hundi involved a contract which — (i) warrant the payment
of money, the promise or order which is unconditional (ii)
capable of change through transfer by valid negotiation.
• With the development of banking, people began to
deposit precious metals with lending individuals
functioning as bankers or Seths.
• Money became an instrument for supplying the
manufacturers with a means of producing more
goods.
• Agriculture and the domestication of animals were
main part of the economic life of ancient people.
• Also, weaving cotton, dyeing fabrics, making clay
pots, utensils, and handicrafts, sculpting, cottage
industries, masonry, manufacturing, transports (i.e.,
carts, boats and ships), etc., helped in generating
surpluses and savings for further investment.
• Intermediaries provided considerable financial security
to the manufacturers by assuming responsibility for the
risks involved, especially in foreign trade.
• During the Mughal period and the days of the East
India Company, the institution of Jagat Seths also
Rise of developed and exercised great influence.
• Commercial and Industrial banks later evolved to
Intermediaries finance trade and commerce and agricultural banks to
provide both short-and long-term loans to finance
agriculturists.
Transport
• Transport by land and water was popular in the ancient times that
helped in maintaining trade.
• Trade routes were structurally wide and suitable for speed and
safety.
• Maritime trade was another important branch of global trade
network.
• Malabar Coast has a long history of international maritime trade
going back to the era of the Roman Empire.
• Exports - Spices, wheat, sugar, indigo, opium,
sesame oil, cotton, parrot, live animals and
animal products— hides, skin, furs,
horns, tortoise shells, pearls, sapphires, quartz,
Major Exports and crystal, lapis, lazuli, granites, turquois and
copper etc.
Imports • Imports - Horses, animal products, Chinese
silk, flax and linen, wine, gold, silver, tin,
copper, lead, rubies, cora glass, amber, etc.
Position of Indian Subcontinent in
World Economy (1 AD upto 1991)
• Between the 1st and the 7th centuries CE, India is
estimated to have the largest economy of the ancient and
medieval world, controlling about one-third and one-
fourth of the world’s wealth.
• The 18th century India was far behind Western Europe in
technology, innovation and ideas.
• In the mid-18th century, the British empire began to take
roots in India and used revenues generated by the
provinces under its rule for purchasing Indian raw
materials, spices and goods.
• Hence, the continuous inflow of bullion that used to
come on account of foreign trade stopped.
India begins to Reindustrialise
• After Independence, India went for centralised planning. In 1952, the First Five Year Plan was
implemented and importance was given to the establishment of modern industries, modern
technological and scientific institutes, space and nuclear programmes.
• However, the Indian economy could not develop at a rapid pace due to lack of capital formation
rise in population, huge expenditure on defence and inadequate infrastructure.
• Thus, India relied heavily on borrowings from foreign sources and finally, agreed to economic
liberalisation in 1991.
• Today, Indian economy is one of the fastest growing economies in the world today and a
preferred FDI destination.
• The recent initiatives of the Government of India such as ‘Make in India’, Skill India’, ‘Digital
India’ a roll out of the Foreign Trade Policy (FTP 2015-20) is expected to help the economy in
