Peek into History: How port-led trade strengthened AP’s economy in pre-Independence era

For a long time, communications in Andhra State (which was part of the Madras Presidency until 1953) consisted mainly of rivers and canals, followed by the Railways later. 
When the Dutch set their foot on Indian shores, they had gone in for the establishment of their factories at Surat, Masulipatnam (Machalipatnam), Bimilipatnam (Bheemli), Narsapur and Nagapatnam. Of these five factories, three were in the Coastal Andhra region in the immediate Neighbourhood of Nizampatnam to Nellore. They primarily aimed at developing Andhra coast as a centre of trade as the cotton goods from Andhra and its weaving hinterland formed the nucleus of trading activities in the markets of far East.

Port-led trade

It was but natural then that the Dutch took advantage of patronage of the hinterland powers. They secured some important concessions in trade from the Qutb Shahi rulers of the Golkonda kingdom. The Golkonda Kingdom by this time was one of the most powerful ruling powers in the sub-continent. The Dutch entered into an agreement with Mohammad Quli Qutb Shah (1580-1612) and succeeded in securing the necessary permission for the establishment of factories at Masulipatnam and Nizampatnam. 

In 1660, they opened a factory in the city of Golkonda, whose chief merchant acted as their ambassador. These very favourable concessions heralded a period of expansion of the Dutch trade in Masulipatnam that coincided with the height of power and prosperity of Golkonda Kingdom. The port of Masulipatnam began to develop as the chief maritime outlet of the kingdom of Golkonda.

Gradually over the years, after the English East India Company established its presence, the Masulipatnam port witnessed a decline due to Mughal Military action against the Golkonda Kingdom. This helped the British shift its operations from Masulipatnam to Madras. 

Of these coastal settlements off the Madras port, Visakhapatnam became the most important trading centre on the northern coast after the decline of Masulipatnam. Between 1647 and 1687, the French trade began to progress in coastal Andhra from the port of Masulipatnam, reviving the port.

Over the next few years until the 1800s, the British extensively used the ports of Vizag, Coringa, Masulipatnam, Cocanada (Kakinada) for the export of food grains, fruits, cattle, oil and oil seeds, timber, salt, handloom products and long cloth to the French Settlements, French West Indies, Malacca, Mauritius Island, Bourbone, the Mediterranean, the ports of Red Sea and the Cape of Good Hope. 

For example: The Masulipatnam port was used to export textile material to Bombay and the Persian Gulf. The sea ports of Cocanada, Bhimilipatnam, Vizagapatnam and Masulipatnam were very busy commercial centres, exporting annually a number of goods worth lakhs of rupees.

Strengthening irrigation systems

Later, in the 1830-1840s, the English East India Company approved the construction of Kistna-Godavari irrigation scheme. Gordon Mackenzie, Kistna (now Krishna) district collector suggested that the Kistna-Godavari Irrigation Scheme’s main intention lies in reducing the likelihood of a famine, but the real impact involved transforming the area’s outlook on local aspiration, regional connections, prosperity-creating opportunity, and attitude towards the prevailing political condition.

When the Andhra State was part of the Madras Presidency under the British Rule, Guntur district witnessed a famine in 1832. This caused a loss of Rs.2.27 crore loss of revenue to the Government. To ensure they do not lose revenue, the British Government had deputed one Captain Buckle to look into utilising Krishna and Godavari river water for irrigation. Buckle proposed construction of an ambitious project, a huge dam, across the Krishna river. This was completed by 1855. (A bridge — Prakasam Barrage — was later constructed on this dam under the Andhra State, after breaking off from Madras Presidency).

Meanwhile, Coastal Andhra was always attractive to ambitious powers because of its agricultural capacity, especially its rice-growing capability. Similar to the situation in Kistna district, there was continuous famine even in the Godavari districts during that period. 

So, during 1840-1850s, Sir Arthur Cotton, an English military Engineer, who directed a similar scheme in the Cauvery delta in the Tamil-speaking region, supervised the construction of a large dam (now called Dowleswaram Barrage) and canal system through Krishna-Godavari delta. He saw clear connections between better control of water and economic growth. In 1844, he noted that vast amounts of water were wasted, with over 20% of the crops left to the vagaries of the weather, whereas on the Cauvery that has been reduced to 5%.

Krishna-Godavari conditions were potentially among the best in the world, yet the people of the region endured uncertain water supply. Cotton, for example, suggested that a cloth collapse in Rajahmundry, could have been prevented by the supply of cheaper food that kept labour costs down - an irrigation scheme, he argued, would increase food production by 50% with less labour, thus reducing costs by up to 50%. 
“New roads, bridges and canals would encourage more transport of tradable goods, giving local producers better access to wider markets. This would increase regional prosperity,” he thought.

Cloth, handloom exports gain prominence

There was a good deal of Inter-state commerce between the British territories of Andhra districts, Hyderabad and Mysore. During 1908, the British laid railway lines in Andhra to improve transportation and trade. The European settlements in Andhra used to sell piece goods, sugar, oils, tobacco, spices and copper in Hyderabad. 

Merchants in the Hyderabad State bought sugar, spices, dry coconuts, maize, chillies, camphor, copper and turmeric from the Dutch factories of Jagannathpuram, Palakollu and Bheemunipatnam. But, due to the oppressive taxation system and customs duties in Andhra this trade gradually declined whereas the Nizams had a tax-free system in the Hyderabad State which made goods affordable. 

The situation was further aggravated by the Carnatic and Mysore wars. Things gradually got better due to the agreement between the Nizam and the British in Hyderabad State after the Subsidiary Alliance.

Railways ups trade & transportation

Meanwhile, the introduction of Railways and improved means of communication and transportation created trade and tourism opportunities which led to the growth of towns in the region. Thus, Vizag, Rajahmundry, Vizianagaram, Nellore, Waltair, Bezawada, Tuni and Bhimavaram rose to prominence as urban centres. In the 1930s, port-development in Andhra State expanded trade opportunities as Visakhapatnam Port Trust was formed and other ports were developed. 

During this time, several industries such as Cottage industries, Bangle industries, Handmade paper, painted cloth manufacturers, manufacture of pith work such as garlands and musical instruments, Indigo, Kondapalli toy industry, Lacquer work, Boat Building, Jutka (Tonga) building, Gold and silver lace threading, Crochet lace, artistic pottery, were declining due to lack of financial assistance and encouragement.

Even as several sectors existed in the Andhra State, in 1941, Walchand Hirachand, the second Chairman of the famous Scindia Company chose to launch a shipyard at Visakhapatnam. After Independence, two thirds of its holdings were acquired by the Government of India in 1952 and the shipyard was renamed as Hindustan Shipyard Ltd on January 21, 1952.

Therefore, the state’s extensive irrigation and canal system, allowing smooth transportation increased the trade of the Andhra region, making it historically and geographically a rich region.

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