Ancient Indian Economy - History of India
Welcome to Study Guides!

Ancient India - Economy

red-brown cinnamon sticks
Indian herbal medicines

September 2016 - Most people in ancient India, as in other parts of Asia and Europe at this time, were farmers. In India, farmers mainly grew wheat and rice, and cotton for cloth. They grew opium for medicine too. On the coast, people produced salt in big evaporation flats, and in Sri Lanka they dove for pearls. Indian traders shipped teak wood to Iran to use in ship-building. Many men and women and children also worked in manufacturing, spinning, weaving, and printing cotton cloth, pouring steel into crucibles, boiling off sugar into lumps, and drawing out glass into tiny glass beads.

India always made money from trade, because India is between China and West Asia and Europe. From the Harappan period on, Indian people were selling gold to West Asia, using their carefully made weights to weigh the gold out. Soon Indian traders were selling West Asian glass and wool to people in China, and Chinese things like silk and pottery to people in West Asia.

Traders in India also sold a lot of Indian things to both China and West Asia; early on it was mainly medicine, but also spices like cinnamon and black pepper, clothing dyes like indigo (named for India) and luxuries like pearls. The trade made India a very rich country. But because the trade mainly went through northern India, the north part of India was usually richer than the south part.

blue and brown glass beads
Beads from Arikamedu

Sometime around 600 BC, Indian traders began to trade using ships on the ocean, which could carry more stuff more easily and safely than donkeys or camels could on land. This was good for South India, because some of the ships went to ports in the south, or sailed right around the south of India. About the same time, Indian rulers began to mint metal coins.

Also about this time, pearl divers were collecting pearls to sell off the shores of Sri Lanka. By 200 BC, manufacturers had extended the pearl industry to include cheaper stone and glass beads on the south-east coast of India, at Arikamedu, and traded both pearls and beads as far as the Philippines to the east and as far as West Africa to the west.

row of tubes stuck in a hillside
Steel furnace from Samanalawewa, Sri Lanka

This successful shipping trade, and the Sogdian creation of the Silk Road route from Central Asia east to China and west to the Persian Empire, encouraged Indian manufacturers to develop new industries. By around 300 AD, India was making and selling high quality steel along the Silk Road; a hundred years later India was also making and selling paper. In the 600s AD there was a big steel factory with wind-driven bellows in Sri Lanka. About the same time, India began to make and sell tons of lump sugar to China, to the Sogdians, and to the Parthian Empire.

elephant and giraffe stone carving
African giraffe in India
(Konarak Sun Temple, Odisha, ca. 1250 AD)

About 130 BC, the Ptolemies established direct sailing from Egypt and East Africa to India. By 800 AD, Indian manufacturers were also selling a lot of cotton cloth, silk, and glass beads to Arab traders and African traders, who sailed with the cloth to East Africa and sold it there, bringing back African ivory, gold, and slaves. Very soon, looking for other things to trade for, the traders also began to bring back coffee.

Learn by doing: go to a bead store and make a bracelet or necklace.
More about the Indian economy

Bibliography and further reading about the ancient Indian economy:

Arab Seafaring Eyewitness India Ancient India

Arab Seafaring: In the Indian Ocean in Ancient and Early Medieval Times, by George Hourani and John Carswell (2002). For adults, a time-tested account of trade between India and the Arabian Peninsula.

Eating India: An Odyssey into the Food and Culture of the Land of Spices , by Chitrita Banerji (2007). Not a cookbook, but a discussion of food in India, for grown-ups.

Eyewitness India, by Manini Chatterjee (2002). Written for kids.

Ancient India, by Virginia Schomp (2005). Written for teens. Very good for reports.

More about the Indian economy home

LIMITED TIME OFFER FOR TEACHERS: Using this article with your class? Show us your class page where you're using this article, and we'll send you a free subscription so all your students can use Study Guides with no distractions! (Not a teacher? Paid subscriptions are also available for just $16/year!)
Please help other teachers and students find us: link to this page from your class page.
Karen Carr is Associate Professor Emerita, Department of History, Portland State University. She holds a doctorate in Classical Art and Archaeology from the University of Michigan. Follow her on Instagram or Twitter, or buy her book, Vandals to Visigoths.
Cite this page
  • Author: K.E. Carr
  • Title:
  • Site Name: Study Guides
  • Publisher:
  • Date Published:
Did you find what you needed? Ask your teacher to link to this page so other people can use it too! Send it in and win a "Great Page!" award!
Sign up for more free articles and special offers in' weekly newsletter:
We will never share your e-mail address unless you allow us to do so. View our privacy policy. Easy unsubscribe links are provided in every email.
Comment on This Article

Does your class page honor diversity, celebrate feminism, and support people of color, LBGTQ people, and people with disabilities? Let us know, and we'll send you a Diversity Banner you can proudly display!
Looking for more? is loading comments...
(Comments will appear after moderation, if they are kind and helpful. Feel free to ask questions, and we'll try to answer them.)
Cite this page
  • Carr, K.E. . Study Guides, . Web. 28 April, 2017