International Business & Economics Research Journal – May/June 2014 Volume 13, Number 3 Copyright by author(s); CC-BY 653 The Clute Institute Commercial Practices In The Ancient Indian Peninsula: Glimpses From Kautilya’s Arthashastra Monsurur Rahman, Indiana University of Pennsylvania, USA Framarz Byramjee, Indiana University of Pennsylvania, USA Reza Karim, Karim and Associates, USA ABSTRACT Very few westerners ever heard of Chanakya, a.k.a Kautilya. Kautilya is credited with compiling the treatise on statecraft called the “Arthashastra.” This treatise contains fifteen distinct chapters or parts encompassing all components of statesmanship that a ruler needs to run the affairs of his kingdom. This paper briefly narrates some of the commercial practices prevalent in Ancient India enumerated in Kautilya’s Arthashastra during the Mauryan period. Keywords: Commercial; Trading; Wholesale; Export/Import; Retailing INTRODUCTION he Arthashastra is a comprehensive treatise covering virtually all aspects of human life. Artha means wealth and Shashtra means science; thus Arthashastra literally implies the science of acquiring and managing wealth. Arthashastra was conceived and named as the Science of Wealth. It focused on creation of wealth as the means to ensure the well being of the state (Raghvan, 1998). The treatise comprises a cohesive whole, including economic administration of the state, trading, imports/exports, retailing, transportation, warehousing, taxation, and consumer welfare. A significant part of the Arthashastra deals with the science of wealth or economics. When it deals with politics, the Arthashastra describes in detail the art of government in its widest sense - the maintenance of law and order of efficient administrative machinery (Rangarajan, 1987). Kautilya was a great proponent of the notion that the state or government has a crucial role to play in maintaining the material well-being of the people in a nation. Arthshastra focused on preservation of the state through alliances. Arthashastra viewed good counsel and fair judgment as the constituents of the state’s power and as more useful than military might. Arthashastra takes a managerial perspective on managing the affairs of the state (Raghvan, 1998). A perfect balance had to be maintained between state management and people's welfare, and this was the essence of Kautilya's economic treatise, Arthashastra, created about 2,300 years ago. The next section of the paper gives a brief historical background behind the compilation of Arthashastra. Arthasastra contains virtually all aspects of commercial transactions in excruciating detail. The remainder of the paper then describes how these functions were performed in Ancient India during the Mauryan period. HISTORICAL BACKGROUND Part myth, part legend, and part history, Kautilya was believed to be the person instrumental in creating the Mauryan dynasty. He served as teacher, mentor, and chief minister of the Mauryan ruler, Chandragupta Maurya. Chandragupta was contemporary of Alexander, the Macedonian conquistador who, history recalls, conquered much of the then known civilized world. Alexander died around 323 BC and Chandragupta Maurya established his kingdom around that time. Some Greek historical records suggest that he may have visited Alexander in 326 BC. Not much is known about the early life of Kautilya, but the legend says that his father belonged to the Kautilya Gotra (clan); hence he is called Kautilya. History suggests his given name was Vishnu Gupta. To make T