Why did the network of export trade in textiles that was controlled by Indian merchants, break down by the 1750s ? What were its effects ?
(a) Causes : Following were the causes for breaking down of the network of export trade : The European companies gained power by securing a variety of concessions from local courts (rulers or officials). They got the monopoly rights to trade. European companies started their operations from new ports of Bombay and Calcutta. Trade through the new ports was controlled by the European companies and was carried in European ships. (b) Effects : Old ports of Surat and Hoogly declined. Exports from these ports fell, the credit that had financed the earlier trade dried up and the local bankers went bankrupt. The gross value of trade at Surat fell from ? 16 million in the last years of the seventeenth century to ? 3 million in 1740s. Export from Bombay and Calcutta grew with the growth of colonial power. Trade was now controlled by European companies and was carried out in European ships. It also led to collapse of old trading houses.
