The ever-growing demand for Indian silk and an inevitableincrease in the sale of calico in England led to an organised protest by some English merchants, interlopers, champions of mercantilism and leader of the Whigs against the sale of Indian goods in English markets. But the advocates of the East India Company supported its claim on such grounds as have become familiar to us since the days of Adam Smith. They strove to show that the English pocketed considerable profits from the use and sale of inexpensive Indian goods in England or Europe.

THE characteristic features of India’s foreign trade during the 17th century has been its export of commodities like textiles and spices in exchange of gold and silver, say a number of European travellers. India came to be known as the ‘sink of precious metals.’ The English merchant Terry put it like this: "Many silver streams run thither river as all to the sea and there stay". The most conspicuous feature of Indian commerce was the absorption of precious metals by way of the heavy exports by the Europeans from this country. On the other hand, most of the English goods like woollens, lead, tin, coral, quick silver, vermilion and ‘presents’ like pictures and satins brought to India were either exchanged with certain commodities or remained unsold for quite sometime.

Bernier’s testimony to Indian trade is extensively detailed and looks impressive. He succinctly remarked: "Gold and silver after circulating in every quarter of globe, came at length to be swallowed up, lost in some measure in Hindustan. Indian goods enjoyed tremendous reputation in the European markets and in the Middle East, and were highly sought after. Countries sent ships laden with gold and silver to the Red Sea ports of Mocha, Bassra and Bander Abbas or Gombron during the onset of monsoons, before they reached India". Import of foreign goods in no way prevented India from absorbing a large portion of the gold and silver of the world, admitted through a variety of channels, while there was scarcely any opening for its return, he adds.

Tavernier also held similar views. According to him, it was always profitable to carry gold and silver to India. "In bullion rather than in coin because gold and silver were not valued in India except by their standard and because there was always a deduction in coined money on account of the cost of minting".

Herbert Moll has also corroborated that the ships came to India from England, laden with gold in order to buy Indian commodities. The author felt obliged to remark, "All the goods we carry to India are a trifle, compared with the bullion and foreign coin transported thither." Careri endorsed Bernier’s view that all the gold and silver, after circulating round the world, came to India. "The American Gold, after running through several kingdoms of Europe went to Turkey or Persia from where it went to Mokha on the Red Sea, near Babu-ul-mandal to Basra on the Persian gulf of Bandar Abbas and to Gombroon and this money was afterwards sent over to Hindustan, for the Indian commodities purchased by these countries. Besides the Indian, Dutch, English and Portuguese ships that every year carry the commodities of Hindustan, to Pegu, Tannessary, Siam, Ceylon, Achin, Maccasar, Maldive islands, Mozambique and other places, must of necessity convey much gold and silver to India from these countries. All that the Dutch fetch from the mines in Japan, sooner or later goes to Hindustan, and the goods carry’s hence into Europe, whether to France, England or Portugal, are all purchased for ready money which remains here."

The East India Company has been criticised from time to time by Parliament for its pursuance of ‘bullionest or mercantilist policy’ as it was considered not in the interest of the country. In defence of the company, Sir Dudley Digges published his famous pamphlet in 1615 entitled, ‘A Defence of Commerce’, which stated that re-export of Indian goods from England to the continent had yearly exceeded the value of bullion exported from England to India. He proved that "the English Nation had from the time of establishment of the East India Company saved 70,000 pounds a year in price of pepper and spices and had further benefitted from commerce with India by the increase in customs revenue and the building of great ships and the employment of a large number of Englishmen in the Company’s business.

There is enough evidence to believe that the commercial position of India during this period was quite comfortably placed as the Indian commodities had managed to attain considerable popularity in England. The ever-growing demand for Indian silk and an inevitable increase in the sale of calicoes in England led to an organised protest by some English merchants, interlopers, champions of mercantilism and leader of the Whig party against the sale of Indian goods in English markets. But, the advocates of the East India Company supported its claim on such grounds as have become familiar to us since the days of Adam Smith. They strove to show that the English pocketed considerable profits from the use and sale of cheap Indian goods in England or Europe. Some of the writers who stood for the freedom of trade carried the theories of Thomas Mun to their logical conclusion. They proved that England derived considerable benefits from the East Indian trade; "If trade is stopped or damned up in one part, it will overflow in another. The freedom of trade would make all manner of commodities cheap, the cheapness of work encourages foreign trade, foreign trade brings wealth and that raises the price of the land."

The huge profits accrued to India through the export of bullion by the company to the East worked out to be anywhere around £ 800,000 per annum. The company exported no fewer than a million pounds of goods annually during the year 1698-1700. It was asserted that England exported almost one-third of the total silver coined in England. The growth of trade during the period was the most important factor in the development of the company, which flooded Europe with Indian goods, especially cloth.