From the sixth century onwards, a sharp decline began. Trade with the main part of the Roman empire ended in the third century, and the silk trade with Iran and the Byzantium stopped in the mid-sixth century.

India carried on some commerce with China and Southeast Asia, but its benefits were reaped by the Arabs who acted as middlemen.

In the feudal set-up, horse trade became more important because of military needs. In the sixth century, horses from Persia were imported, and traders did not have to pay custom duties. Before the rise of Islam, the Arabs had virtually monopolized India’s export trade.


Image Source:


The decline of trade for well over 300 years after the sixth century is strikingly demonstrated by the virtual absence of gold coins in India. The paucity of metallic money after the sixth century is true not only of north India but also of south India. The decline of trade led to the decay of towns. Towns flourished in west and north India under the Satavahanas and Kushans and a few cities continued to thrive in Gupta times. However, the post-Gupta period witnessed the ruin of many old commercial cities in north India.

Excavations show that several towns in Haryana and East Punjab, Purana Qila (Delhi), Mathura, Hastinapur (Meerut district), Shravasti (UP), Kaushambi (near Allahabad), Rajghat (Varanasi) Chirand (Saran district), Vaishali, and Pataliputra began to decline in the Gupta period, and largely disappeared in post-Gupta times. The Chinese pilgrim Hsuan Tsang visited several towns considered sacred on account of their association with the Buddha but found them virtually deserted or dilapidated. On account of the restricted market for Indian exports, artisans and merchants living in these towns flocked to the countryside and took to cultivation.

In the late fifth century, a group of silk weavers from the western coast migrated to Mandasor in Malwa, gave up silk weaving, and adopted other professions. On account of the decay of trade and towns, the villages had to meet their needs of oil, salt, spices, cloth, etc., on their own. This gave rise to smaller units of production, each unit meeting its own needs.

Most merchants could have become cultivators, but some were appointed managers of land administration. Like temples and brahmanas, some merchants were also granted land by the king in Gupta and post- Gupta times. In such cases, they directly looked after their land grants, but indirectly they looked after grants of lands of which they had been appointed trustees or managers, that is, land endowed on temples and monasteries. The role of the merchants as landlords was linked to the decline of trade and towns.