The story of the evolution of goods exchange from spice bartering to e-commerce

With the national budget occupying mind space and TV prime time for the past few days, this is a good time to step back and understand a little bit more about the history of the world’s economy. As some of you may already know, the world’s economy had its genesis in trade.

Long before airplanes made it easy for us to zip from place to place, people were trading goods with others from far-away lands. Merchants traversed trade routes on journeys that took months and even years on horse/camel-back or by ship. As goods began to be exchanged, so did customs and habits. Trade even changed the history of nations, as traders became rulers of distant countries.

Let’s find out more by taking a trip down the world’s trade routes.

Ancient history

Thousands of years ago, when human settlements were connected by narrow footpaths or horse tracks rather than broad roads, trade took place on broad rivers such as the Nile, Euphrates and the Indus. People travelled up and down these rivers in early versions of boats to trade goods.

Given the perilous journey and the limited amount of space available for goods, it was important that traded commodities stay compact yet valuable, in order to make the trader’s journey worthwhile. As a result, early trade was in precious metals, spices and, later, textiles.

India's great merchants

As people learnt to build sturdier boats, they began making longer journeys, for example from the Mediterranean Sea to India via Egypt and Arabia.

With a long coastline, many ports and a central position between Europe and South-east Asia/China, India was one of the great centres of the world around a thousand years ago. According to scholars, ships from Rome used to arrive daily at ports in Tamil Nadu, due to the huge demand for Indian spices and products in ancient Rome. Indian merchants were paid in gold and silver and India was one of the richest countries in the world at that time.

The Silk Route

Meanwhile, further north of the Himalayas, another trade route was flourishing. Called the Silk Road, the route linked Europe with China, the world’s main producer of silk at that time. Caravans of merchants on camel back regularly travelled the route carrying their precious silk cargo to Rome.

New World discovered

A little over 500 years ago, European explorers set sail across the Atlantic to begin the ‘Age of Discovery’. This was the time that all of Europe and Asia realized that two huge continents – North and South America loomed beyond the Atlantic horizon.

From gold to chocolate, goods from the ‘New World’ began finding their way to Europe. Indeed the discovery of America can be put down to the trade greed of the Portuguese and Spanish explorers.

Ideas travel too

Ideas usually follow the path of trade routes. Around 2,000 years ago, an important sea trading route that was established between India and China, passed Singapore and the Indonesian islands. Along with the traded goods, religions like Hinduism and Buddhism, which originated in the Indian sub- continent, began spreading to that part of the world.

When trade became tyranny

Trade winds also blew in Dutch, English and French settlers to India. Although foreign merchants had for long been visiting India, Europeans who wanted to control trade with India began establishing settlements in India. They started with coastal settlements along the west (the Portuguese in Goa) and the east coasts (the French in Pondicherry) of India.

Over time, they overran weak Indian kings and princes and the English East India Company took control of the greater part of India. Eventually India became the crown jewel of the British Empire.

As you can see with India, trade became a route to bigger things, and eventual rule of a country. The British rule changed the direction of India’s history. From a patchwork of small kingdoms ruled by princes where people lived mainly in small villages, India became a huge country, where people increasingly live in towns and cities.

Modern Trade

The invention of modern aircraft and container ships that can criss-cross the world, carrying massive volumes of goods has changed the history of trade, and the way business is done in our world. It has become much cheaper to transport goods across the world. As a result, companies build factories in places where it is cheaper to do business and then ship the manufactured products to many parts of the world to sell them. Thousands of factories have been built in countries such as China based on this new model.

Of course, traditional goods like textiles and spices continue to be traded, but the invention of the computer has led to trade in ‘intangibles’ – things that cannot be touched or felt.

Software programs are created in countries like India and then sent to customers all over the world over the Internet and other computer networks.

(Anita is founder and editor of a news website for young people. For more information, please log on to www.childfriendlynews.com)


Goods that are most exported today

  • Oil and fuels: Oil is pumped from below the sea and places in West Asia and exported to

  • Electronic equipment, including cellular phones and computers. The U.S., Japan, Taiwan, South Korea and China are some of the countries that export electronic equipment

  • Heavy Machinery, including construction equipment, earthmovers, boilers and nuclear reactors. Rs. 95,92,000 crore is the value of heavy machinery exports (International Trade Centre figures 2012)

  • Vehicles: The automotive industry is growing fast as more people in developing countries buy cars.

  • Plastics: China is known for its manucturing prowess and low-cost packaging technologies. Plastic exports include household goods and toys.

    Images:Satheesh Vellinezhi, M.A. Sriram, S.R. Raghunathan, Reuters


  • The proud Chinese refused to accept anything other than gold for their silk. Alarmed at the enormous amounts of gold that were making their way from Rome into China’s treasury, the Roman emperor Tiberius was forced to ban the wearing of silk in Rome!