As a result of land-grants and some other factors gave birth to independent, self-sufficient economic units. The beneficiaries of land-grants enjoyed the several economic rights which cut the economic ties between Central authority and the donated areas.
They were more dependent on the central government for the continuity and development of their economy. The Central idea behind this was to preserve the self sufficient village economy by typing down the peasants and artisans.
Furthermore, the conditions of the villagers, which were independent of the beneficiaries of land-grant and were placed under the charge of the village headman were not dissimilar.
The Headman might compel the peasants and women not only to work in his fields but also to spin yarn so that his clothes might be supplied to him locally “according to Vatsyayana’s “Kamasutra”. In this way, some of the commodities produced were put on safe to cater to the simple needs of the villagers.
Decline of commerce is demonstrated by tire paucity of coins in the post-Gupta period. The gold coins which were so abundant during the periods of the Kushanas and Gupta went out of circulation after the sixth century A.D. The absence of silver and copper coins also attracts attention.
However, the period under study was characterised by unprecedented agrarian expansion and this alone would have normally necessitated more metallic money. Secondly, decline of internal trade and consequently producing the local commodities to meet local needs and other weakening the power at the centre.
Naturally and gradually, the milers adopted the method of paying officials by grants of revenue or in kind. Unless the compulsions were serious enough, no ruler would have willingly forgone the privilege of minting coins in his own name.
It is indicative of the growing disuse of coins during the post-Gupta age the religious assignments which were made in cash by the princes and individuals in first two centuries of the Christian era replaced by grants of land.
In the post Harsha period hardly any coin can be ascribed without any doubt to any ruling house. Although legal text refers to the use of coins land charters indicate taxes levied in “hiranya” and some inscriptions speak of the cost of construction and purchase in terms of currency, but few actual finds can be assigned to this period.
In fact, several scholars have noted the absence of coins during the period 600 to 900 A.D. It is therefore evident that the coins were in general form from the time of Harshavardhana onwards. This leads us to the conclusion that trade suffered a decline and Urban life began to disappear.
The important changes in the Gupta and post- Gupta period was the decline of trade, both internal and external. Indian foreign trade registered a peak during the post-Mauryan period, when India traded with the Roman empire, Central Asia and South East Asia.
However, commercial decline set in during the Gupta period. It became more pronounced by the middle of the sixth century A.D. The inflow of Roman coins into India stopped after the early centuries of the Christian era.
Further Roman empire itself broke up at a later date. It seems that in the first half of the sixth century A.D. silk was as good an earner of bullion for India as spices in the first century A.D. The emergence of the Arabs and the Persians as competitors in trade did not augur well for Indian merchants.
Some Byzantine coins ranging up to sixth century have been found in Andhra and Karnataka. Silk and spices were important items in the Indo-Byzantine trade. The Byzantine however, learnt the art of growing silk worm in the middle of the sixth century A.D. Consequently the silk trade was badly affected.
The migration of silk weavers from Gujarat and their taking to other vocations, acquires meaning in this context. Gupta ruler’s ties with Central Asia were also weak. Whatever the little left of the contacts with Central Asia and Western Asia were completely wiped off by the invasions of Hunas.
The decline of foreign trade may also be by the expansion of Arab under the banner of “Islam”. The Arabs expansion on the North-West frontiers of India in the seventh and eighth centuries. Their presence in the region made overland routes unsafe for Indian merchants. In this way, the coastal towns of India carried on some trade with countries of South-East Asia and China.
However, this interaction does not appear to have been of any intense kind. There is evidence for the spread of many cultural influences from India to South-East Asia in early historical and early medieval times but there is no evidence of pottery, coins or other objects of this kind to suggest vigorous commercial interactions.
After fourth century A.D. there is no evidence of trade in beads etc. with the areas of South-East Asia. Thus, we have clear indications of the decline of the foreign trade of North-Western India from the end of the Gupta age, and particularly from the first half of the seventh century A.D.
Whatever the internal trade and commerce existed had to be fitted into the emerging feudal structure. This evident from the detailed rules laid down in the law books regarding the functioning of the guilds of artisans and merchants.
Internally the fragmentation of political authority and the dispersal of power to local chiefs, religious grantees etc. seems to have had an adverse effect. King is required not only to observe the laws of the guilds but also to enforce them.
What actually existed can be concluded from three charters granted to guilds of merchants by the rulers of coastal areas of Western India.
The first charter was issued at the end of sixth century A.D. while second and third charters were issued at the beginning of the eighth century A.D. by ‘Bhagaski’, the Chalukya king of the Konkan area.
On the basis of these charters we can make the following observation about the condition of merchants and their guilds in the post Gupta- period.
According to the Charters, a few merchants were elevated to the position of managers of the endowment or the town as the case might be.
They tied down the merchants to the management of villages, which in one case were attached to a temple and in another to the rehabilitated town. The merchants enjoyed practically the same privileges and immunities as were enjoyed by priests. Perhaps by some feudal barons in the villages granted to them.
But since they were burdened with the management of villages, they could not pay full attention to their trade and commerce. Therefore, the charters show the feudation of merchants by turning them into some type of landed intermediaries.
In this way the activities of every guild were restricted to its locality so that it had no freedom of competition which was a characteristic of the restricted-closed economy of Europe in the Middle Ages.