SOUTH ASIAN HISTORY
Pages from the History of India: European Domination http://india_resource.tripod.com/Europetrade.html
Prior to the arrival of the Portuguese in the in the Indian Ocean in 1498, no single power had attempted to monopolize the sea lanes that connected the ports of the Indian sub-continent with the Middle East and East Africa on the West, and the ports of South East Asia and China to the East. Unlike in the Mediterranean where during Roman (and earlier) times, rival powers attempted to control the oceanic trade through military means, peaceful trade had remained the norm in the Indian Ocean. Although there were periods when coastal rulers of the Malabar coast and Southern India were powerful enough to demand toll taxes from passing ships, (and Arab rulers had attempted to control the shipping lanes through the Red Sea) there had not been any systematic attempt by any single political power to eliminate all others from the oceanic trade that touched the Indian subcontinent.
Indian ports that demanded high taxes from docking ships invariably lost out to "free ports" - i.e. ports that demanded very low tariffs from docking ships. In fact, several of the Indian ocean ports were politically neutral entities - giving free and equitable access to shippers of varied nationalities and religious affiliations.
Whereas pre-15th century Arab and Chinese geographical texts spoke of various natural hazards involved in long-distance shipping, they did not cite any significant political or military impediments to undertaking long-distance voyages other than the risk from pirates. Thus, evidence left behind by chroniclers such as Marco Polo, Ibn Batuta, Persian ambassador Abdur Razzaq, the Venetian Nicolo Conti, and Genoan Santo Stefano - all indicate that the Indian Ocean was the scene of thriving trade in the 14th and 15th centuries.
But once the Portuguese had discovered their new route to India, they displayed considerable zeal in seizing the most profitable ports of East Africa, the Persian Gulf, and the Saurashtran, Konkan and Malabar regions in India. A chain of fortified coastal settlements backed by regular naval patrols allowed the Portuguese to gradually eliminate many rivals, and enforce a semi-monopoly in the spice trade by the middle of the 16th C. Local traders were coerced into buying safe passes and paying customs duties to the Portuguese. However, this attempt at a monopoly was challenged by the maritime powers of North Sumatra based in Aceh, as well as by the Omanis, and by Gujarati traders. An as the Portuguese expanded with settlements in South East Asia, China and Japan - the Western monopoly became harder to maintain.
Initial success came to the Portuguese because they had been shrewd enough to develop a strategy of divide and conquer - first concentrating on isolating Muslim traders from the Hindu monarch of Calicut and demonstrating their fire power by launching a two-day bombardment of the vital port city (which was then the largest spice market of the Indian Ocean). These intimidating tactics worked in the favor of the Portuguese who repeated this strategy at other key trading destinations. In 1510, Bijapur's Adil Shahi ruler ceded the control of Goa to the Portuguese. Having realized that the bulk of trade moving out of India landed at one of three ports in the Indian Ocean - i.e. Hormuz in the Persian Gulf, Aden on the Red Sea, and Malacca in the Malay Peninsula - Goa's Indian Governor, Alfonso Albuquerque then shifted his attention to capturing each of these crucial ports. Malacca fell in 1511, and Hormuz in 1515. Only Aden proved elusive.
In 1505, the spice trade from Asia to Europe was declared a 'royal monopoly' by the Portuguese, who saw in this the possibility of extorting tribute through military means. Once Hormuz and Malacca came under the military and political control of the Portuguese, the Portuguese then attempted to expand their monopoly to the inter-Asian trade. For this they needed to seal off independent access to the Gujarati traders who although cut off from Malacca could continue to trade through the Red Sea. For twenty years, the Portuguese kept attacking the ports of Gujarat, even gaining a military victory in 1509 (after an earlier defeat against the combined defences of Diu and an Egyptian naval fleet that had been sent to aid the defences of Diu's Amir Hussain. But nevertheless, Diu did not fall; and attempts to defeat Malik Ayaz, (the next governor of Diu) also failed in 1520-1. In 1530, the Portuguese colonists looted and burned the ports of Cambay, Surat and Rander, but it was only in 1534, when in a moment of weakness, Sultan Bahadur of Gujarat relinquished control of the small port of Bassein. Diu - which had held out for two decades, suddenly became vulnerable when Mughal emperor Humayun cut a deal with the Portuguese to defeat Sultan Bahadur. The Portuguese were given permission to build a fort on the island, which allowed the Portuguese to garner complete political control over the territory by 1555. Portuguese naval control over the Gulf of Cambay became complete when they also captured the port of Daman in 1559. Thus the merchants of Gujarat were brought under control by the Portuguese, and Gujarat - (which on account of its thriving industry and trade may have been one of the richest of India's provinces) saw its fortunes steadily decline.
Following their conquests in Gujarat, the Portuguese then proceeded to augment their control in Sri Lanka by taking over Colombo, and founding a settlement in Meliapur (Sao Tome) on the Coromandel coast. Realizing that the trade from Goa to Bengal was even more lucrative than the Coromandel trade, they then turned their aggressive energies on Bengal. After initial resistance, they were allowed to settle in Chittagaon and Satgaon (near Kolkata), and later moved up-river to Hooghly. This enabled them to establish a virtual monopoly on the trade out of West Bengal by the end of the 16th C, until they were expelled by the Mughal armies in 1632. The Livra das cidades, e fortalezas documented in detail Portuguese control over numerous Indian ocean ports (in addition to those previously mentioned), such as Sofala in Mozambique - a major supplier of African gold, Mangalore, Cannanore, Cranganore, Cochin and Quilon - all important sources for spices and other tropical produce.
This success had come about mainly because unlike the trading ships of their Asian predecessors, the Portuguese ships were extremely well-armed for their times. Moreover, they were fortunate to arrive in the Indian sub-continent at a time when many of the ports were outside the political control of any powerful local ruler who could mount any effective resistance against their superior fire-power, and their willingness to use it without hesitation. This was also due to the fact that the great Asian economies of the time were essentially land-based self-reliant economies. External trade did not comprise a significant portion of the economy, and the rulers had little stake in defending the interests of the sea-faring merchant classes. Where the merchant class was of some local significance - such as in Gujarat, the Portuguese did meet with considerable resistance (as also in Sumatra). But when squeezed between two enemies (the Mughals to the North and the Portuguese to the South), Gujarat had little choice but to give in.
Smaller and less-established traders from the Southern and Eastern Indian coast were completely eliminated from the inter-Asian trade, and were never able to recover. Others survived by accepting Portuguese conditions and demands of tribute for safe passage. However, some Gujarati and other Indian traders (along with their counterparts from East Africa, the Middle East and Indonesia) tried hard to bypass the Portuguese monopoly by using smaller ports that were relatively free from Portuguese domination. In addition, Gujarati traders began to emulate the Portuguese practice of arming their fleets, so as to resist the attacks from their Portuguese rivals.
However, the bulk of the profits went to the Portuguese who shipped highly-prized Indian textiles to Indonesia - picking up valuable spices in return for shipment to Europe. But the very profitability of this trade brought competitors. First the Dutch, and soon after the English and the French. In 1656, Colombo fell to the Dutch, and in 1663, the Portuguese lost Cochin to the Dutch. Competition with the British East India Company had led to the loss of Hormuz earlier.
Very quickly, the Dutch and then the English attempted to replace the monopoly of the Portuguese with a monopoly of their own. This led each of them to form their own fortified settlements along the chief trading routes as alternatives to the former Portuguese trading bastions. At first, the Dutch appeared to be more successful than their British and French rivals, and succeeded in establishing their pre-eminence in Indonesia, and once they had outmaneuvered the Portuguese, also came to dominated the shipping out of Gujarat and Sind. It was now the Dutch that imposed their will on most Indian shippers, exacting the taxes that were earlier levied by the Portuguese. At the same time, each of Portugal's European rivals began setting up local factories and trade outlets that matched or exceeded Goa.
Surat (1612), Madras (1639), Bombay (1668), Pondicherry (1674) and Calcutta (1698) thus gradually overshadowed Goa, and took over as the main centers of Indo-European trade. Nevertheless, the Indian (and other Asian) ship-building industry continued to thrive, as ships built in the ports of the Indian Ocean often matched (or even exceeded) the European-built ships in finish and craftsmanship.
Impressed by the range of Indian manufactures (especially textiles), and to supplement their trade, Dutch and British merchants established factories not only in their new port settlements, but also inland. Factories in the centers of textile weaving - such as Bahruch and Ahmedabad in Gujarat, and further inland in Burhanpur, Agra and Lahore were set up. Masulipatam, Pipli, Balasore and Dacca also drew their attention as did Patna later. In this way, the Dutch and British merchants could keep a much more significant share of the profits that would have otherwise gone to local Indian middlemen. Manufacturing and trading emporiums were also set up in Indonesia by the Dutch.
But even as European-initiated manufacturing grew quite dramatically in the period leading up to direct colonial rule, a successively smaller proportion of the revenues that were generated in Europe reached the highly skilled and industrious Indian or Indonesian workers.
However, with only limited political control in India, British and Dutch traders could not entirely control the price of skilled labor, and had to deal somewhat respectfully with local factory owners, traders and tax officials. India continued to maintain a positive trade balance with respect to its European trade, and European traders were compelled to cover this trade deficit with a steady supply of precious metals. And as long as the European traders furnished the Indian subcontinent with gold and silver, Indian monarchs had some incentive to tolerate the Europeans even as they continued to expand their presence, and artfully resist political control over their Indian activities.
For a while, an equilibrium was maintained, but the European trading companies were always trying to increase their bargaining power by exhibitions of their steadily improving military might. They were constantly testing their powers, probing any weakness on the part of the Indian rulers. In 1691, the East India Company even attempted to challenge Mughal authority, but lost to Aurangzeb's armies, who was determined not to allow the European traders any more concessions than what they had already won.
But once the Mughal empire began to disintegrate, it was only a matter of time before one or the other of the European powers that dominated the Indian Ocean trade would find a way to extend its domination on the Indian heartland as well. In the end, it was the British who won the battle to rule over India, edging out their European rivals who found other territories to colonize in Asia and Africa.
The colonization of India was followed up by the colonization of Burma, Indo-China, the Middle East and virtually all of Africa. China's coastal areas also come under European domination. By the dawn of the 20th century, the US had also emerged as a colonial power, as it took over Spanish colonies in the Caribbean and in the Philippines.
Thus what began as a war against the unarmed free-trading merchants of the high seas, ultimately led to the almost complete subjugation of much of the planet by the Western European (and American) powers, and an enormous and unprecedented flow of wealth from the colonies to Europe and North America. For a century, the Portuguese managed to exact tribute from most of the regional traders who were active in the Indian Ocean. This was followed by a period of Dutch domination, although there were also pockets (and periods) of competitive trade as other European rivals attempted to outflank the Portuguese (and later the Dutch). But in the end, it was the British who won the largest prize - two-thirds of mainland India - which they brought under direct colonial rule and exacted tributes far greater in magnitude than what had accrued to the Portuguese and the Dutch before them.
Thus even as much of Asia and Africa were forced into a state of unprecedented poverty and misery, Europe and North America witnessed astonishing developments in science, technology and culture. It is important not to ignore this important dialectic of history - that the wealth (that in large part) funded the foundation and sustenance of "Western Civilization" came from the South and the East. What was for the West, a triumph of awesome proportions, became an unmitigated tragedy for those that had to suffer the tortuous ordeal of colonization.
Western champions of "free trade" might also note that it was the armed and willing European monopoly traders who destroyed the free trade of the Indian Ocean. Not the other way around. Protected trade, at the barrel of the gun, not "free" or "fair" trade was at the very heart of the West's early contacts with the South and the East, and to this date, it is the West that appears most unwilling to bring down its own trade barriers even as it attempts to preach "free trade" to the rest of the world.
N.K. Sinha's Economic History of Bengal - From Plassey to the Permanent Settlement (Calcutta, 1956)
Auguste Toussaint: History of the Indian Ocean
K.N. Chaudhri: Trade and Civilization in the Indian Ocean