The Market as a Social Institution

The Market as a Social Institution

Question

How is it established that precolonial India had merchant groups, manufacturing centres, trading networks and banking system?

Answer

It is based on the fact that India was major manufacturer and exporter of handloom cloth (both ordinary cotton and luxury silks) and source of many goods like spices which were in great demand in the global market. There were trading communities or castes (Vaisyas) and they had their own systems of banking and credit like Hundi or bill of exchange which allowed merchants to engage in long-distant trade.

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