Which of the following process helped the rise of new business community in India through the early expansion of market?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Colonialism
Option (1) Globalisation — Incorrect. The globalisation of the Indian economy came with the liberalisation policies of recent decades. The new business communities the question refers to rose much earlier, under colonial rule.
Option (2) Commodification — Incorrect. Commodification occurs when things that were earlier not traded in the market become commodities, for instance labour or skills. It describes what is bought and sold, not the rise of a business community.
Option (3) Colonialism — Correct. Under colonialism the commercial money economy spread into local economies and markets expanded. The Marwaris, the best-known business community in India, became a successful business community only during the colonial period, when they took advantage of new opportunities in colonial cities such as Calcutta. Their rise from small migrant traders to bankers to industrialists is the story of a new business community under colonialism.
Option (4) Network trading — Incorrect. Trade within caste and kinship networks is old: the Nakarattars of Tamil Nadu traded and lent money in this way in pre-colonial times. The Marwaris also relied on their networks, but networks were how they traded; the new opportunities came from colonialism.
NCERT (2025-26): “Colonialism and the Emergence of New Markets … A good example of this process is provided by the Marwaris, probably the most widespread and best-known business community in India. Represented by leading industrial families such as the Birlas, the community also includes shopkeepers and small traders in the bazaars of towns throughout the country. The Marwaris became a successful business community only during the colonial period, when they took advantage of new opportunities in colonial cities such as Calcutta and settled throughout the country to carry out trade and moneylending. Like the Nakarattars, the success of the Marwaris rested on their extensive social networks, which created the relations of trust necessary to operate their banking system. Many Marwari families accumulated enough wealth to become moneylenders, and by acting as bankers also helped the commercial expansion of the British in India (Hardgrove 2004). In the late colonial period and after Independence, some Marwari families transformed themselves into modern industrialists, and even today Marwaris control more of India’s industry than any other community. This story of the emergence of a new business community under colonialism, and its transformation from small migrant traders to merchant bankers to industrialists, illustrates the importance of the social context to economic processes.” |