Colonial Rule and Its Effects on India's Rural Economy

The European maritime powers were obsessed with breaking the Arab-Venetian monopoly on India's spice trade and desired a larger share in the lucrative trade. The overland routes took too long and were subject to various exactions by rulers and brigands. The Silk Route from China was again the monopoly of the Venetians, Turks, Persians, and the maritime nations of Europe, tried hard to discover the fabled sea-route to India after rounding the Cape of Good Hope which the Arabs monopolized as a closely-guarded secret. Spain, Portugal and other rival powers tried their best to discover new trade markets and Manuel I of Portugal commissioned Vasco de Gama, an explorer to seek out Christian Kingdoms in the East and also Portuguese access to the rich Asian markets.

Manned by 170 sailors in four ships, Vasco De Gama reached Calicut in 1492, but could not purchase much spices and returned to Lisbon with two ships and 54 men. Pedro Cabral then visited Goa with 15 ships and returned with four ships laden with spices and made huge profits. Vasco de Gama was promoted to Admiral and sent in 1502 to establish an empire, unleashed a reign of terror on the Arab trading dhows and other slow merchant ships and established a number of Portuguese settlements and possessions in India. The Portuguese sent envoys to various Indian kings and noted that opium was widely used and highly valued in society.

In 1600, the British East India Company was set up and by 1764 when they took control of the Bengal Suba, they controlled opium production and established a monopoly which helped in defraying the huge expenses incurred in carving out a colonial empire in India and balancing the trade deficit with China (Maddison, 2007).