UPSC Notes / Medieval Indian History / Chapter 13
Chapter 13 of 24

Mughal Economy

Agriculture, textile manufacturing, and India's dominant position in global trade — the economic foundations of the Mughal Empire's fabled wealth.

📖 ~13 min read 🕌 Medieval Indian History

Introduction

The Mughal Empire presided over one of the world's largest and wealthiest economies of its time — India under the Mughals is estimated by economic historians to have accounted for a substantial share of global GDP, driven by highly productive agriculture, a renowned textile industry, and extensive trade networks.

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Image space — add illustration here
Suggested: Mughal-era artisans weaving fine muslin or cotton textiles
Suggested visual: Mughal-era textile production or a bustling trade port

Agriculture

  • Predominant occupation; key food crops (wheat, rice, millets) alongside significant cash crops — cotton, indigo, sugarcane, and (increasingly, from the 17th century) tobacco and later, in limited areas, the newly introduced potato and maize (New World crops arriving via the Portuguese).
  • Land revenue (via the Dahsala system, previous chapter) was the state's overwhelming primary source of income.

Crafts and Manufacturing

IndustryKey CentresNote
Cotton textiles (including fine muslin)Bengal (Dhaka), Gujarat, Coromandel CoastIndia's most important export industry; Dhaka muslin was famed internationally for its exceptional fineness
SilkBengal, GujaratBoth domestic production and imported raw silk processing
ShipbuildingGujarat, Bengal coastSupported extensive maritime trade
Metalwork and jewelleryVarious imperial karkhanas (workshops)Karkhanas were state-run workshops producing luxury goods for the court

Trade — Domestic and International

Flowchart — Mughal-Era Trade Networks
Mughal India — major global exporter
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Overland — Central Asia, Persia, via traditional caravan routes
Maritime — European companies (Portuguese, Dutch, English, French) via coastal ports (Surat, Masulipatnam, Hooghly)

India ran a favourable balance of trade with Europe through much of this period — large quantities of European silver/gold flowed into India in exchange for textiles and spices.

  • Surat emerged as the principal Mughal-era port on the west coast, a major hub for the Hajj pilgrimage and international trade alike.
  • European trading companies established fortified factories along the coasts during this period, gradually expanding their commercial — and eventually political — footprint (this transition is covered further in the Advent of Europeans chapter).

Currency System

CoinMetalNote
MohurGoldHigh-value coin, primarily ceremonial/hoarding use
RupiyaSilverStandard currency (inherited and refined from Sher Shah Suri's model)
DamCopperUsed for everyday, lower-value transactions
📌 Economic Historians' Estimate: Some economic historians (e.g., Angus Maddison) estimate that Mughal India accounted for roughly a quarter of world economic output at its peak — a striking figure often cited to contextualise the empire's global economic significance before its later decline.
✅ UPSC Focus: Cotton textile industry's global significance (Dhaka muslin) · Karkhana system · Favourable balance of trade with Europe and bullion inflow · Mohur-Rupiya-Dam currency hierarchy.

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