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What attracted European Trading Companies to India?

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  • Last Updated : 17 Aug, 2022
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As India was a rich trade nation in ancient times due to the availability of most natural resources, spices, raw materials for textiles vice versa at attractive prices and geographical feasibility for trading through land and sea has attracted most western explorers to discover various sea routes to India. Trade and commerce have played an important role in the development of the Indian economy. Archaeological evidence has shown that land and sea trade played a very important role in the growth of the Indian economy. 

India was the main business center of the world and trading cities such as Mohenjo-Daro and Harappa were established. In ancient times, India established strong trade relations with other countries such as Mesopotamia, and the trade that took place between the two countries involved silver, gold, precious stones, gems, pearls, earthenware pots, etc.

European- Indian Trade Initiative

In the 18th Century, many explorers discovered different sea routes in the search of trading. During this exploration, some European trading companies arrived in India for trading. Vasco da Gama, a Portuguese sailor was the first European to reach India by direct sea route. He returned with an abundance of goods and valuable commodities and sold them in the European market at a great price. This was the primary thing that attracted most Western explorers and European trading companies to have low-cost trade with high profits in India.

Important factors which attracted European Trading Companies to India

While venturing across oceans, most European trading companies used to seek new lands which could benefit them commercially. Due to the discovery of geographical sea routes to India below are the important factors that attracted European Trading Companies to India:

  • European trading companies aim to buy goods at very low prices in different countries and then bring them to Europe and sell them on their markets at higher prices. 
  • When India was discovered by the European trading companies, they found goods in India that they can trade at a lower price and sold them in Europe at a huge price
  • Cotton and Silk has a large market in Europe. And India is a producer of good quality silk and fine quality cotton which is a primary raw material for textile industries.
  • These good qualities of Cotton and silk produced in India had attracted these European trading companies largely because these trading companies would buy this finest silk and cotton at a cheaper price from India and sell them at huge prices in Europe.
  • Besides finest Silk and Cotton produced in India, India also attracted European trading companies with various quality spices and dry fruits available across the country due to tropical climate.
  • Variety of Spices like pepper, cloves, Kashmiri saffron, cardamom, nutmeg, dry ginger and cinnamon are produced in India and all these spices are in great demand across the Europe.
  • Due to the tropical climatic conditions and the great Himalayan range India also produced valuable dry fruits like Apricots, Walnuts, Raisins, Figs and cashew which were also in demand in the European countries.

These are the main reasons why European trading companies are attracted to India. 

Frequently Asked Questions

Question 1: When did trade start in India? 


In 1498, the Portuguese explorer named Vasco da Gama was the first European landed at Calicut (now Kozhikode) in Kerala to sail to India. The huge profits made on this voyage made the Portuguese desire to trade more with India and also attracted several other European merchants and navigators.

Question 2: What was the trade of ancient India? 


The Romans and Greeks traded wine, copper, coral, lead, tin, antimony, glass and aromatic storax for South Indian precious pearls, ivory, cardamom, turmeric, myrrh, lilac fabric, fine cotton and most of all, pepper. But olive oil and garum also came from Europe to ancient South India.

Question 3: How has trade affected India? 


Trade is an important part of India as it helps them to import and export products to several other countries. This has helped many people find employment, improved the economy, and generally improved relations between the countries they trade with.

Question 4: What were the trade routes of India? 


The Indian Ocean trade routes connecting Southeast Asia, India, Arabia, and East Africa, began at least  the third century BC. This extensive international route network connects all these regions as well as East Asia (especially China).

Question 5: What is the oldest form of trade? 


Barter system was the oldest form of trade. It helped in direct exchange of goods or services without intermediaries or money at established exchange rates or by negotiation. It is considered the oldest effective and satisfactory form of trade.

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