to the verge of bankruptcy. It was only after the merger of the French West
Indies Company with the French East India Company in 1719 that France
caught up with the new pattern of international trade, which linked Indian
Ocean trade with trans-Atlantic trade.
Impact of Europeans on India’s Foreign Trade
With the arrival of the Europeans, particularly the Dutch and the English,
there was a tremendous increase in the demand for Indian textiles for both the
Asian markets and later the European market. The Asian markets for Indian
textiles were developed over a long period. There markets were extensive and
widespread and there was great diversity in their demand. This intra-Asian
trade in Indian textiles seems to have operated in two ways. Firstly, there was
a bilateral trade between the Coromandal and various parts of South East
Asia such as Malacca, Java and the Spice Islands. In this trade, the
Coromandal textiles were exchanged for a variety of South-East Asian
products. Secondly, Coromandal textiles acted as a link in a multilateral
trade, embracing the Coromandal, South-East Asia, West Asia, and the
Mediterranean. In this trade, Coromandal textiles were exchanged for South-
East Asian spices which were in turn meant for the West Asian and
Mediterranean markets. The European market for Indian textiles actually
developed around the middle of the 17th century, and thereafter it grew by
leaps and bounds.
     The intra-Asian trade witnessed severe competition among the various
groups of merchants, such as the Portuguese, the Dutch, the English, the
Danes, and the Indians consisting of both the Moors and the Chettis, whereas
the European market for Indian textiles was dominated entirely by the
European companies, particularly the English and the Dutch, with the Indian
merchants acting essentially as middlemen.
     European participation in the foreign trade of India showed a marked
increase in the second half of the 17th century. This increase can be seen
clearly in the sharp rise in their investments, a large part of which was in
textiles meant for the Asian markets as well as the European market. Though
initially European investment in Indian textiles considerably exceeded those
ordered for the European market, by the end of the 17th century the situation