The economy of the ancient Tamil country (Sangam era: 600 BCE – 300 CE) describes the ancient economy of a region in southern India that mostly covers the present-day states of Tamil Nadu and Kerala. The main economic activities were agriculture, weaving, pearl fishery, manufacturing and construction. Rice was the most important crop; it was the staple cereal, grown widely in paddy fields, and served as a medium of exchange for inland trade. Pepper, millets, pulses and sugarcane were other commonly grown crops. Madurai and Urayur were important centres for the textile industry; Korkai was the center of the pearl trade. Industrial activity flourished.

Inland trading was conducted primarily through barter in busy market places by merchant associations and commercial lending institutions. Merchants formed associations that operated autonomously, without interference from the state. The people of ancient Tamil country engaged in brisk overseas trade with Rome; the trade reached a peak after the discovery of a direct route for merchant ships between Tamilakam and Egypt, taking advantage of the monsoon winds. Pepper, pearls, ivory, textiles and gold ornaments were exported from Tamilakam, and the main imports were luxury goods such as glass, coral, wine and topaz. Foreign trade brought in a large amount of internationally convertible Roman currency.

The state played an important role in building and maintaining infrastructure such as roads and ports—funded through taxation—to meet the needs of economic and social activity. Wealth was unequally divided among the people, giving rise to distinct economic classes.

Agriculture

Agriculture was the main occupation of the ancient Tamils and the most respected. Farmers were aware of different soil types, the best crops to grow and the various irrigation systems suitable for any given region. In the five geographical divisions of the Tamil country in Sangam literature, the Marutam region was the most fit for cultivation, as it had the most fertile lands. Land was classified, according to its fertility, as Menpulam (fertile land), Pinpulam (dry land), Vanpulam (hardland) and Kalarnilam or Uvarnilam (salty land). Menpulam yielded rich produce on a variety of crops, but Pinpulam was cultivated only with dry crops due to limited irrigation facilities. The yield from Vanpulam was limited, while Kalarnilam was unfit for cultivation. Some of the well known types of soil were alluvial soil, red soil, black soil, laterite soil and sandy soil.

The Tamils cultivated paddy, sugarcane, millets, pepper, various pulses, coconuts, beans, cotton, plantain, tamarind and sandalwood. Paddy was the main crop, with different varieties grown in the wetland of Marutam, such as Vennel, Sennel, Pudunel, Aivananel and Torai. The peasants lived in groves of trees close to the farmlands and each house had jack, coconut, palm, areca and plantain trees. Peasants grew turmeric plants in front of their houses and laid flower gardens in between the houses. Farmers believed that ploughing, manuring, weeding, irrigation and the protection of crops must be done according to a specific method in order to obtain a good yield. A wide range of tools needed for agriculture, from ploughing to harvesting, were manufactured. The basic tool was the plough also known as meli, nanchil and kalappai. Palliyadutal referred to the process of removing weeds using a toothed implement attached to a plank and drawn by oxen. Lower-class peasants used stone sling devices to scare animals and birds away from the standing crops. Sickles were used for harvesting mature rice paddies. Since the rivers of the region were not perennial, several irrigation techniques were developed to ensure an adequate and continuous supply of water. Farmers used a bullock-propelled device called Kapilai for bailing out water from deep wells and a manual setup called Erram, for shallow wells. Tanks, lakes and dams were used as water storage systems and the water regulated using sluices and shutters. Kallanai, a dam built on river Kaveri during this period, is one of the oldest water-regulation structure in the world. Surface irrigation, sprinkler mechanism and drip irrigation methods were followed to prevent wastage of water.

Most farmers cultivated their own plots of land and were known by different names such as Mallar, Ulutunbar, Yerinvalnar, Vellalar, Karalar and Kalamar. There were also absentee landlords who were mostly brahmins and poets who had received donations of land from the king and who gave these donations to tenant farmers. Sometimes independent farm laborers, known as Adiyor, were hired for specific tasks. Landlords and peasants paid tax on the land and its produce – the land tax was known as Irai or Karai and the tax on produce was called Vari. One sixth of the produce was collected as tax. Taxes were collected by revenue officials known as Variya and Kavidi, who were assisted by accountants called Ayakanakkar. For survey and taxation purposes, various measurements were used to measure the land and its produce. Small lots of land were known as Ma and larger tracts as Veli. Produce was measured using cubic-measures such as Tuni, Nali, Cher and Kalam and weight-measures such as Tulam and Kalanju.

Industry

During the Sangam age, crafts and trade occupations were considered secondary to agriculture. Carpenters crafted wooden wares and blacksmiths worked in simple workshops. Weaving, pearl fishing, smithy and ship building were prominent industries of ancient Tamilakam. Spinning and weaving was a source of income for craftsmen; weaving was practised part-time by the farmers in rural areas. Madurai and Urayur were important industrial centers, known for their cotton textiles. Muslin cloth was woven with fine floral work of different colors. Silk cloth was manufactured with its threads gathered in small knots at its ends. Clothing was embroidered for the nobles and aristocrats who were the main customers. Material was often dyed; the blue dye for the loin cloth was a preferred color. In addition to silk and cotton fabrics, cloth made of wood fibre called Sirai Maravuri and Naarmadi was used by the priestly class. The cloth manufacturers wove long pieces of cloth and delivered it to the dealers. The textile dealers then scissored off bits of required length, called aruvai or tuni, at the time of sale. Hence, the dealers were called aruvai vanigar and the localities where they lived aruvai vidi. Tailors, called tunnagarar in Madurai and other big towns, stitched garments .

Pearl fishing flourished during the Sangam age. The Pandyan port city of Korkai was the center of the pearl trade. Written records from Greek and Egyptian voyagers give details of the pearl fisheries off the Pandyan coast. According to one account, the fishermen who dove into the sea avoided attacks from sharks by bringing up the right-whorled conch and blowing on the shell. Convicts were used as pearl divers in Korkai. The Periplus mentions that "Pearls inferior to the Indian sort are exported in great quantity from the marts of Apologas and Omana". Pearls were woven together with muslin cloth before being exported and were the most expensive product imported by Rome from India. The pearls from the Pandyan kingdom were in demand in the kingdoms of North India as well. Several Vedic mantras refer to the wide use of the pearls, describing poetically that royal chariots and horses were decked with pearls. The use of pearls was so great that the supply of pearls from the Ganges could not meet the demand.

The blacksmith, working in the Panikkalari (literally: workplace), played an important role in the lives of ancient Tamils. Some of the essential items produced by blacksmiths were weapons of war, tools such as the plough, domestic utensils and iron wheels. They used a blow pipe or a pair of bellows (a turutti) to light the fire used for smelting and welding. There were not many blacksmith shops in the rural areas. Blacksmiths were overworked as they had to serve the needs of neighboring villages. Shipbuilding was a native industry of Tamilakam. Ocean craft of varying sizes, from small catamarans (logs tied together) to big ships, navigated Tamil ports. Among the smaller crafts were ambi and padagu used as ferries to cross rivers and the timil, a fishing boat. Pahri, Odam, Toni, Teppam, and Navai were smaller craft. The large ship, called Kappal, Kalam had masts (Paaymaram) and sails (Paay).

Other industries were carpentry, fishing, salt-manufacture, forestry, pottery, rope making, chank-cutting, gem cutting, the manufacture of leather sheaths for war weapons, the manufacture of jewellery, the production of jaggery, and the construction of temples, and other religion-related items such as procession cars and images. Baskets made of wicker for containing dried grains and other edible articles were also constructed.

Inland trade Ancient Tamilians were active traders in various commodities, both locally and outside Tamil country. The kingdoms of northern India sought pearls, cotton fabrics and conch shells from Tamilakam in exchange for woollen clothing, hides and horses. Locally most trading was in food products – agricultural produce was supplemented by products from hunters, fishermen and shepherds who traded in meat, fish and dairy products. In addition, people bought other goods such as items for personal hygiene, adornment and transportation. Mercantile transactions took place in busy market places. Traders used various modes of selling: hawking their goods from door to door, setting up shops in busy market places or stationing themselves at royal households. Sellers of fish, salt and grain hawked their goods, the textile merchants sold cloths from their shops in urban markets and the goldsmith, the lapidary and sellers of sandalwood and ivory patronised the aristocrats' quarters. Merchants dealt in conches and ivory.

Most trade was by barter. Paddy was the most commonly accepted medium of exchange, followed by purified salt. Honey and roots were exchanged for fish liver oil and arrack, while sugarcane and rice flakes were traded for venison and toddy. Poems in Purananuru describe the prosperous house in Pandya land well stocked with paddy that the housewife had exchanged for grams and fish. Artisans and professionals traded their services for goods. Quantities were measured by weighing balance, called the Tulakkol named after Tulam, the standard weight. Delicate balances made of ivory were used by the goldsmiths for measures of Urai, Nali and Ma. A different kind of barter involving deferred exchange was known as Kuri edirppai – this involved taking a loan for a fixed quantity of a commodity to be repaid by the same quantity of the same commodity at a later date. Since barter was prevalent locally, coins were used almost exclusively for foreign trade.

Markets