JOST A MON

The Huguenot traveller and scribe Jean Chardin can be considered an early economic historian. In his Travels in Persia, 1673-77, he describes the massive sink for bullion that India was, and its enormous trade advantages with respect to its neighbours. He also astutely reasons why Hindu merchants were able to outbid and outprice their Muslim and Christian competitors. 

By the 1600s, the Mughal Empire was established as possibly the wealthiest state in the world, easily comparable even to the Mings in China. Unlike the Chinese who were a massive net importer of products from around the planet, the Mughals were fortunate in reigning over an absolutely astonishing trade surplus. Gold and silver from the Americas and Europe simply poured into India. Being an agricultural and industrial powerhouse, and to all intents and purposes self-sufficient in food, India was able to export away most of its surpluses. And, with a large population base that was able to work for cheap (and with inflation being next to zero for well-nigh on a couple of centuries), India was able to produce goods so competitively priced that even factoring in the risks of international trade, they still were cheaper than local products in Iran and the Ottoman domains.

There was a large Indian diaspora in Iran in those years, estimated at close to 10,000 permanent residents. All over the trading territory on either side of India, from South-east Asia to the Mediterranean, Hindus of the Marwari subcaste, and their Jain counterparts, maintained interconnected affiliations with their kin. There were banias, in other words, plying their trade, as they have continued to do with much skill all the way to the present. They had become wealthy under the Mughals by offering them credit, and traded and lent money in Bandar Abbas in the Persian Gulf. But the 10,000 traders in Isfahan that Chardin referred to were Punjabi Khatris.

Many of these people had begun overland treks in search of trade even before the advent of the Mughals. Babur himself estimated that 20,000 of them came to Kabul every year from India. Many continued further west, establishing family firms in Persia in the manner of the Italians (e.g. the Medicis). Iran at the time was seriously cash-starved, being a net importer of nearly every possible good, and the Khatris were able to lend large amounts of money in that country to keep its markets functioning.

They were reputed to be very aggressive wheelers and dealers. An Englishman, Edward Pettus, who was posted to Isfahan by the East India Company said this of them (using the term 'bania' to mean all non-Muslim Indians):

Although Chardin was a Huguenot who had taken refuge in England from persecution in France, he was not above some bigotry himself. His description of the Khatris evoked similar distaste for the Jews in his homeland, referring to them as nefarious and usurious moneylenders who drained Iran of its wealth by repatriating bullion back to India.

Despite this assessment, he was in general quite nuanced in his perception of Indian merchants. Clearly, Hindus and Jains had no religious proscriptions against charging interest. Chardin believed this gave them a leg up in new markets, and a serious advantage in established ones. But simultaneously, he also pointed out that Muslims had developed a subtlety in their financial methods as well, concealing interest payments when it suited them. On the other hand, the prohibition of usury meant that money didn't circulate quite as easily in Iran or Turkey amongst the locals, who preferred to invest in infrastructure ancillary to trade (such as caravanserais and bazaars). The Khatris by dint of their willingness to lend created a multiplier effect that redounded to their own benefit far more than the Muslims.

Check out: Stephen F. Dale, The Muslim Empires of the Ottomans, Safavids, and Mughals, Cambridge University Press, 2010.