The Mughal economy, covering the Indian subcontinent from the early sixteenth to the mid-eighteenth century, was one of the largest in the early modern world. At its peak under Akbar and his successors, it generated an estimated 22–24 per cent of global gross domestic product (GDP) and produced roughly a quarter of world manufacturing output. While the Mughal Empire is conventionally said to have been founded in 1526 by Babur, the Mughal imperial structure, however, is sometimes dated to 1600, to the rule of Babur's grandson, Akbar. Quote: "Another possible date for the beginning of the Mughal regime was 1600 when the institutions that defined the regime were set firmly in place and when the heartland of the empire was defined; both of these were the accomplishment of Babur's grandson Akbar." The economy in South Asia during the Mughal era increased in productivity compared to medieval times. Mughal India's economy has been described as a form of proto-industrialization, an inspiration for the 18th-century putting-out system of Western Europe prior to the Industrial Revolution. It was described as large and prosperous. India under Mughal rule produced about 28% of the world's industrial output up until the 18th century with significant exports in textiles, shipbuilding, and steel, driving a strong export-driven economy.Jeffrey G. Williamson & David Clingingsmith, India's Deindustrialization in the 18th and 19th Centuries , Global Economic History Network, London School of Economics At the start of 17th century, the economic expansion within Mughal territories become the largest and surpassed the Qing dynasty and Europe. The share of the world's economy grew from 22.7% in 1600, which at the end of 16th century, had surpassed China to have the world's largest gross domestic product. Bengal Subah, the empire's wealthiest province, alone contributed to 12% of GDP and was a major hub for industries, contributing significantly to global trade and European imports, particularly in textiles and shipbuilding.
The Mughals standardized the currency system introduced by Sher Shah Suri, maintaining high purity in their coins and largely relying on imported bullion due to strong exports, particularly from Bengal. The Mughals were also responsible for building an extensive road system and creating a uniform currency. The empire had an extensive road network, which was vital to the commercial infrastructure, built by a public works department set up by the Mughals which designed, constructed and maintained roads linking towns and cities across the empire, making trade easier to conduct. In late 16th-century Mughal India, the primary, secondary, and tertiary sectors contributed 52%, 18%, and 29% to the economy, respectively, with urban labor making up 18% of the workforce and contributing 52% to the economy. Grain wages were comparable to England's during the 16th and 17th centuries but fell behind in the 18th century, and per-capita income in terms of wheat was higher than early 20th-century British India. The main base of the empire's collective wealth was agricultural taxes, instituted by Akbar. Quote: "The resource base of Akbar’s new order was land revenue" Quote: "The Mughal empire was based in the interior of a large land-mass and derived the vast majority of its revenues from agriculture." These taxes, which amounted to well over half the output of a peasant cultivator, Quote: "... well over half of the output from the fields in his realm, after the costs of production had been met, is estimated to have been taken from the peasant producers by way of official taxes and unofficial exactions. Moreover, payments were exacted in money, and this required a well regulated silver currency." were paid in the well-regulated silver currency, and caused peasants and artisans to enter larger markets. Quote: "His stipulation that land taxes be paid in cash forced peasants into market networks, where they could obtain the necessary money, while the standardization of imperial currency made the exchange of goods for money easier."
Currency and monetary system
The Mughals adopted and standardised the rupee (rupiya, or silver), Mohur (gold) and dam (copper) currencies introduced by Sur Emperor Sher Shah Suri during his brief rule. The currency was initially 48 dams to a single rupee in the beginning of Akbar's reign, before it later became 38 dams to a rupee in the 1580s, with the dam's value rising further in the 17th century as a result of new industrial uses for copper, such as in bronze cannons and brass utensils. The dam was initially the most common coin in Akbar's time, before being replaced by the rupee as the most common coin in succeeding reigns. The dam's value was later worth 30 to a rupee towards the end of Jahangir's reign, and then 16 to a rupee by the 1660s. The Mughals minted coins with high purity, never dropping below 96%, and without debasement until the 1720s.
Despite India having its own stocks of gold and silver, the Mughals produced minimal gold of their own, but mostly minted coins from imported bullion, as a result of the empire's strong export-driven economy, with global demand for Indian agricultural and industrial products drawing a steady stream of precious metals into India. Around 80% of Mughal India's imports were bullion, mostly silver, with major sources of imported bullion including the New World and Japan, which in turn imported large quantities of textiles and silk from the Bengal Subah province.
Najaf Haider estimates that between the 1580s and 1680s the Mughal mints absorbed bullion on the order of 240 million rupees, making the empire, with the exception of Ming China, the largest net importer of silver outside Europe. The inflow came from New World silver routed through the Levant and the Red Sea, Japanese silver via the Dutch, and European thalers re-minted at Surat and other imperial zarabkhanas.
Labour The historian Shireen Moosvi estimates that in terms of contributions to the Mughal economy, in the late 16th century, the primary sector contributed 52%, the secondary sector 18% and the tertiary sector 29%; the secondary sector contributed a higher percentage than in early 20th-century British India, where the secondary sector only contributed 11% to the economy. In terms of urban-rural divide, 18% of Mughal India's labour force were urban and 82% were rural, contributing 52% and 48% to the economy, respectively.
According to Stephen Broadberry and Bishnupriya Gupta, grain wages in India were comparable to England in the 16th and 17th centuries, but diverged in the 18th century when they fell to 20-40% of England's wages. This, however, is disputed by Parthasarathi and Sivramkrishna. Parthasarathi cites his estimates that grain wages for weaving and spinning in mid-18th century Bengal and South India was comparable to Britain. Similarly, Sivramkrishna analysed agricultural surveys conducted in Mysore by Francis Buchanan during 1800–1801, arrived at estimates using a "subsistence basket" that aggregated millet income could be almost five times subsistence level, while corresponding rice income was three times that much. That could be comparable to advance part of Europe. Due to the scarcity of data, however, more research is needed before drawing any conclusion.
According to Moosvi, Mughal India had a per-capita income, in terms of wheat, 1.24% higher in the late 16th century than British India did in the early 20th century. This income, however, would have to be revised downwards if manufactured goods, like clothing, would be considered. Compared to food per-capita, expenditure on clothing was much smaller though, so relative income between 1595 and 1596 should be comparable to 1901–1910. However, in a system where wealth was hoarded by elites, wages were depressed for manual labour. In Mughal India, there was a generally tolerant attitude towards manual labourers, with some religious cults in northern India proudly asserting a high status for manual labour. While slavery also existed, it was limited largely to household servants.
Agriculture Indian agricultural production increased under the Mughal Empire. A variety of crops were grown, including food crops such as wheat, rice, and barley, and non-food cash crops such as cotton, indigo and opium. By the mid-17th century, Indian cultivators begun to extensively grow two new crops from the Americas, maize and tobacco.
The Mughal administration emphasised agrarian reform, which began under the non-Mughal emperor Sher Shah Suri, the work of which Akbar adopted and furthered with more reforms. The civil administration was organised in a hierarchical manner on the basis of merit, with promotions based on performance. The Mughal government funded the building of irrigation systems across the empire, which produced much higher crop yields and increased the net revenue base, leading to increased agricultural production. From the late 17th century to the early 18th century, India accounted for 95% of British imports from Asia, and Bengal Subah province alone accounted for 40% of Dutch imports from Asia.Om Prakash, "Empire, Mughal", History of World Trade Since 1450, edited by John J. McCusker, vol. 1, Macmillan Reference US, 2006, pp. 237–240, World History in Context. Retrieved 3 August 2017
A major Mughal reform introduced by Akbar was a new land revenue system called zabt. He replaced the tribute system, previously common in India and used by Tokugawa Japan at the time, with a monetary tax system based on a uniform currency. The revenue system was biased in favour of higher value cash crops such as cotton, indigo, sugar cane, tree-crops, and opium, providing state incentives to grow cash crops, in addition to rising market demand. Under the zabt system, the Mughals also conducted extensive cadastral surveying to assess the area of land under plow cultivation, with the Mughal state encouraging greater land cultivation by offering tax-free periods to those who brought new land under cultivation. The expansion of agriculture and cultivation continued under later Mughal emperors including Aurangzeb, whose 1665 firman edict stated: "the entire elevated attention and desires of the Emperor are devoted to the increase in the population and cultivation of the Empire and the welfare of the whole peasantry and the entire people."
Mughal agriculture was in some ways advanced compared to European agriculture at the time, exemplified by the common use of the seed drill among Indian peasants before its adoption in Europe. While the average peasant across the world was only skilled in growing very few crops, the average Indian peasant was skilled in growing a wide variety of food and non-food crops, increasing their productivity. Indian peasants were also quick to adapt to profitable new crops, such as maize and tobacco from the New World being rapidly adopted and widely cultivated across Mughal India between 1600 and 1650. Bengali farmers rapidly learned techniques of mulberry cultivation and sericulture, establishing Bengal Subah as a major silk-producing region of the world. Sugar mills appeared in India shortly before the Mughal era. Evidence for the use of a draw bar for sugar-milling appears at Delhi in 1540, but may also date back earlier, and was mainly used in the northern Indian subcontinent. Geared sugar rolling mills first appeared in Mughal India, using the principle of rollers as well as worm gearing, by the 17th century.Irfan Habib (2011), Economic History of Medieval India, 1200–1500, p. 53, Pearson Education The Mughal era sugar production also appeared by the foundings of archaeology evidence by Aligarh Muslim University in 2020 in Agra.