The Causes of Indian Ocean Commerce

cash (2)

AP Theme

Economic Systems

Learning Objective 2.3E

Explain the causes of the growth of networks of exchange after 1200.

Historical Development 1

 Increased Indian Ocean commerce was encouraged by multiple economic causes, such as new commercial practices.

Historical Development 2

Technologies also led to the expansion of Indian Ocean commerce. 

Historical Development 3

Political changes like the expansion of trading states also grew Indian Ocean trade.

Key idea 1

By the 13th century, Indian Ocean trade had taken place continuously for thousands of years and was responsible for commerce and the exchange of cultures.

Like on land-based trade routes, the spread of new financial and banking practices encouraged trade by making commerce safer and more efficient for merchants and consumers.

New technologies helped merchants more safely navigate across the Indian Ocean.

Powerful trading states arose across the Indian Ocean. These trading states gained wealth and power by supporting Indian Ocean commerce.

Contents

Indian Ocean Trade Continued From Previous Periods in History

Main idea

By the 13th century, Indian Ocean trade had taken place continuously for thousands of years and was responsible for commerce and the exchange of cultures.

Maritime commerce in the Indian Ocean has a history spanning thousands of years and continues today. The exchange network is vast, stretching over 13,000 miles from the East Coast of Africa to the South China Sea.

Goods moved through a relay trade system that passed goods between multiple merchants before they reached their destination.

Traded goods included spices, silks, jewels, minerals, textiles, and carvings.

Trade was self-regulating. No single power controlled it.

Boats shipped bulk quantities, making maritime goods cheaper than goods moved over land.

Cultures like Buddhism and Islam also spread along the trade routes.

Traders from the Middle East, India, Indonesia, and China migrated and set up communities throughout the Indian Ocean.

Quick facts: the Indian Ocean exchange network

New Financial and Commercial Practices Increased Indian Ocean Trade

Main idea

Like on land-based trade routes, the spread of new financial and banking practices encouraged trade by making commerce safer and more efficient for merchants and consumers.

New financial practices helped expand trade on land-based and maritime trade networks. These practices supported commerce in a few ways. For one, they made economic transactions easier and quicker. They also provided security for transactions that lowered risks for merchants.

Banking services

While banking was not new during this period, access to banking services became more formalized and available to increased numbers of merchants across Asia. Banking services allowed merchants to store and move large sums of money without always having to have the money physically.

Promissory notes and credit

During the Chinese Tang Dynasty (618-907), merchants began depositing money with bank-like agents who held their money. Merchants received a piece of paper with their deposit amount written. The paper was a promise to the merchant that they could receive their deposit back at a later date. Over time, merchants began exchanging these papers for goods instead of using physical currency.

Paper money

For much of early history, most currencies were made of various metals. This made them expensive and beyond the reach of most poor people who had to barter for what they needed. Paper money originated in China during the Song dynasty. Paper money was cheap to produce and increased the amount of money available in the Chinese economy, which grew the Chinese economy. Growth led to increased imports into China and exports from China onto international trade routes.

Historical trend

New financial systems and technologies make trade and commerce easier leading to economic growth. Modern financial systems include systems like Apple and Google payments and cryptocurrencies.

Technological innovations Increased Trade in the Indian Ocean

Main idea

New technologies helped merchants more safely navigate across the Indian Ocean.

New or improved maritime technologies made trade across the Indian Ocean safer, quicker, and more profitable.

The magnetic compass

The magnetic compass originated in China. While its discovery date is unknown, it first showed in historical records in the 11th century. By the 12th century, European merchants had acquired the technology from Islamic merchants.

The astrolabe

Astrolabes helped mariners determine their location on the earth’s surface using the position of the sun and the stars. First invented between 220 and 150 BCE, Muslim scholars improved the device’s accuracy between the 8th and 15th centuries.

New ship designs

Between the 10th and 15th centuries, ship technology throughout Afro-Eurasia improved to allow for larger, faster, and more stable ships. In China, during the Song dynasty, the junk was developed with sails that could be raised and lowered in sections and had adjustable angles. These sail innovations allowed the ship to adjust better to changing wind directions. Javanese sailors from Southeast Asia traveled in djongs, which were large enough to carry bulk cargo. Djongs were designed for rough seas and took shipments as far as Ghana on the Northwest African coast.

Governments Supported Indian Ocean Trade

Main idea

Powerful trading states arose across the Indian Ocean. These trading states gained wealth and power by supporting Indian Ocean commerce.

The Indian Ocean region had many trading states that actively supported the growth of commerce.

Provided tax revenue

Led to economic growth

Created employment for the artisan and peasant classes

Provided the ruling and elite classes with luxury goods

Reasons leaders supported trade

Important trading states

Large states developed that relied on Indian Ocean trade for their wealth, power, and influence. 

Srivijaya

Srivijaya was a Buddhist monarchy on the Indonesian archipelago (islands) and Malay peninsula. Srivijaya was at the peak of its power between the 9th and 11th centuries. It was a maritime empire that derived its wealth from gold, the trade of spices like nutmeg and cloves, and the taxing of trade that moved through the Strait of Malacca.

The Sultanate of Malacca

Srivijaya weakened and fragmented into various independent kingdoms after attacks by the Indian Chola Empire. The Hindu Prince Parameswara founded the Sultanate of Malacca in 1402 on the Malay peninsula. He married an Islamic princess and formed close relationships with wealthy and influential Islamic merchants. These merchants supported his monarchy. While he remained a Hindu during his life, Parameswara’s descendants converted to Islam and transformed the kingdom into an Islamic sultanate. Like Srivijaya, the Sultanate of Malacca’s gained wealth from the trade of spices and tax revenue collected from commerce passing through the Strait of Malacca.

Gujarat

Gujarat was an important transit and production center along the Northwest Indian coast. The trading cities of Gujarat were the chief suppliers of commercial goods to North India. The Gujarati trading community primarily consisted of Muslims who had settled in the area. Merchants in these cities bought and sold goods from Swahili city-states, Malacca, and China. Major Gujarati exports included cotton textiles, opium, pearls, wormwood, and spices. Major imports included copper, gold, ivory, silver, and enslaved people.

The Swahili city-states

Indian Ocean trading connections transformed Africa’s east coast from a primarily agricultural farming system and fishing villages to a vital hub on global trading networks. Over time, many of these small villages along the Indian Ocean coast developed into powerful trading city-states. Islam transformed Swahili and became the city-states’ dominant belief system as Islamic traders interacted and settled within the region.

  • Traders rode the monsoon winds in the winter bringing imported goods from Asia, such as cotton from India and porcelains from China, before riding the monsoon winds back to Asia in the summer with raw materials and African products. 
  • Exported goods often came from Africa’s interior regions, including gold, iron goods, leopard skins, and enslaved people. 
Historical comparison

Commercial wealth is important in building state power. The Song dynasty, the Mongol Empire, the Abbasid Caliphate, and Mali and Songhai in Africa were all wealthy due to trade connections.