COMMERCE between Europe and India has existed from very early times, but its character has undergone various important changes. When trade was carried on by routes partly overland, and even for a considerable time after the discovery of the seaway by the Cape, the chief articles sent from or to India were, in pro portion to their bulk, of high value : and spices, gems, silks, and calicoes exported were paid for by imports of the precious metals. With the improvement of communication, both by land and sea, in the eighteenth and nineteenth centuries, and with the develop ment of the resources of India under British rule, trade became more diversified as it became possible to export and import goods of a less valuable nature. At the present time the exports are such as might be expected from a country in which the vast majority of the people are engaged in agriculture, while manufactured goods constitute the bulk of the imports.
The greater part of the rice exported from British India is grown in Burma, where there is a considerable surplus production, which is shipped to Europe, to various parts of Asia, and to South America. The wheat of the Punjab and the North-West Province is loaded at Karachi, and finds a market mainly in the United Kingdom. Raw cotton is no longer utilised in English mills to an appreciable extent, but a new market has in recent years opened up in Japan, which is now the chief consumer of Indian cotton after the home demand has been satisfied. Of the jute crop, about half is consumed at home, and the bulk of the remainder goes to Europe, where Scotland, Germany, and France are the chief purchasers. Oil seeds, which form one of the staple crops of India, are exported to Europe in large quantities, where they are used in the manufacture of soap, candles, and oil-cake. Opium has hitherto found its chief market in China, but the recent attempts made by the Chinese authorities to reduce the consumption of that drug have induced the Indian Government to put an end to the trade. Tea is exported mainly to the United Kingdom, where, within the last fifty years, Chinese teas, which had previously held the field, have been almost entirely superseded by those of India and Ceylon, which are also beginning to make their way in the United States and elsewhere.
The better methods employed in India and Ceylon, both of growing the plant and of preparing the leaf, account in great part for the change which has taken place.
The chief manufactured exports of India consist of cotton yarn and jute goods. The first of these is exported to China, where within recent years it has been in great demand. Jute goods in the form of gunny-bags and gunny-cloth are exported to all parts of the world.
At one time India exported considerable quantities of cotton goods, but with the growth of the Lancashire industry the demand for these gradually declined. Instead, India became a large importer, and has continued to be such, though, with the recent development of the modern factory system within the country, the nature of the trade has somewhat changed. There is no longer the same demand for yarn as before, and the imports of it are confined to the higher counts, for the spinning of which Indian cotton is unsuitable. With regard to piece-goods, conditions are different, and large quantities are imported, though even here Indian competition is making itself felt, and the English manufacturer is being gradually restricted to the higher and finer classes of goods.
Metals and machinery, which together rank next to cotton goods in the table of imports, come principally from Great Britain, but Germany and Belgium supply large quantities of cheap iron and steel, which are much in request.
The demand for sugar in India is a growing one, and instead of exporting, as was formerly the case, almost as much as was imported, India has practically ceased to export, while large quantities are imported from Java, Germany, and Austria-Hungary.
The value of the merchandise exported from India considerably exceeds the value of that which is imported, and this is in part accounted for by the import of treasure, by the charges which the Government of India has to meet in the United Kingdom, by interest on loans, and in other ways.