The East India Trade in the 17th Century

Overview

Sir Shafaat Ahmad Khan’s 1923 study examines East India trade from both political and economic perspectives, analyzing the commercial relations between Great Britain and the East Indies during the 17th century. The 346-page work, published by Oxford University Press, traces the evolution of English mercantile interests from the East India Company’s founding in 1600 through the consolidation of its trading networks by 1700. Khan, an Indian historian, brought non-European perspectives to understanding trade relationships typically narrated solely from British viewpoints, examining how commercial exchange shaped political relationships and laid foundations for eventual British territorial control in India.

About Sir Shafaat Ahmad Khan

Sir Shafaat Ahmad Khan (1893-1947) was an eminent Indian historian who chaired the Department of Modern Indian History at the University of Allahabad (from 1921) and founded the Journal of Indian History in 1924. Earning his D.Litt. from Dublin University in 1918, where he received a Gold Medal, Khan brought rigorous historical methodology to studying Indo-British economic relations. He later served as India’s High Commissioner to South Africa (1941-1944), demonstrating the intersection of historical scholarship and diplomatic service in colonial and post-colonial contexts.

The 17th Century East India Trade

The 17th century marked the English East India Company’s establishment and growth from marginal trader competing with Portuguese, Dutch, and French rivals to dominant commercial power in Indian Ocean trade. Key developments included:

Early Period (1600-1630): The Company received its royal charter from Elizabeth I in 1600, granting monopoly over English trade east of the Cape of Good Hope. Initial voyages faced Portuguese opposition, limited capital, and unfamiliarity with Asian markets. Early factories (trading posts) at Surat, Masulipatnam, and other ports established presence.

Consolidation (1630-1660): Growing trade in textiles, indigo, saltpeter, and spices alongside declining Portuguese power allowed expansion. The Company shifted from voyage-by-voyage financing to permanent joint-stock organization, enabling long-term planning and infrastructure investment.

Expansion (1660-1700): Receipt of Bombay from Charles II (1668), establishment of Madras and Calcutta as major trading centers, and increasing involvement in Indian political affairs marked this period. The Company evolved from purely commercial entity toward territorial power, acquiring fortifications and armed forces.

Political-Economic Analysis

Khan examined the interconnection between commercial and political dimensions:

Mercantile Capitalism: English trade operated within mercantilist economic theory emphasizing accumulation of bullion through favorable trade balances. The drain of silver to India in exchange for textiles and spices concerned mercantilist thinkers, who advocated developing domestic manufactures to reduce imports.

Chartered Monopoly: The Company’s royal monopoly generated conflicts with independent merchants (“interlopers”) demanding free trade. Khan analyzed how monopoly privileges shaped Company behavior, investment strategies, and political lobbying.

Indigenous Economic Systems: Unlike purely British-perspective accounts, Khan examined Mughal economic policies, Indian textile production systems, indigenous merchant networks, and how Asian commercial structures shaped European trading activities. The Company operated within existing Indian Ocean trade networks, adapting to local commercial practices.

Political Consequences of Commerce: Khan traced how commercial competition with European rivals and conflicts with Indian rulers over trading privileges gradually drew the Company into political and military entanglements, setting precedents for later territorial acquisitions.

Trade Goods and Networks

The study documents major trade categories:

Indian Exports: Cotton textiles (calicoes, muslins), indigo, saltpeter (for gunpowder), pepper and spices, silk, sugar, and other commodities drove European demand.

British Exports: Woolen cloth, metals (lead, iron, tin), and manufactured goods had limited Indian markets. The trade imbalance required silver bullion exports to fund purchases, generating mercantilist concerns.

Triangular Trade: Complex trade networks developed involving England, India, Southeast Asia, and China, with commodities and bullion flowing through multiple ports.

Methodology and Sources

Khan employed rigorous historical methodology using:

• East India Company records in London
• Parliamentary inquiries and commercial correspondence
• Contemporary economic treatises and merchant handbooks
• Mughal administrative documents (where available)
• Dutch and Portuguese sources for comparative analysis

His multilingual capacity and familiarity with both British and Indian archival sources enabled more comprehensive analysis than typical British-only perspectives.

Scholarly Significance

Khan’s work contributed to economic history and imperial studies by:

• Documenting the commercial foundations of British imperial power
• Analyzing economic relationships rather than merely political narratives
• Incorporating Indian perspectives and economic systems
• Examining the transition from trade to territorial control

The study influenced subsequent scholarship on mercantile imperialism, the economic dimensions of colonialism, and the role of chartered companies in empire building.

Historical Context of Publication

Published in 1923, four years after Khan’s D.Litt., the work emerged during debates about Indian economic exploitation under colonialism. Indian nationalist economists like Dadabhai Naoroji and Romesh Chunder Dutt had argued that British rule systematically drained Indian wealth. Khan’s historical analysis of 17th-century trade patterns provided background for understanding how commercial relationships evolved into extractive colonial economics.

Digital Preservation

This 346-page Oxford University Press work has been digitized from the University of Toronto library and is freely accessible through the Internet Archive, ensuring continued scholarly access to Khan’s analysis of the commercial foundations of British involvement in India.