ABSTRACT
This chapter analyses the relationship between Europe and Asia where many countries eventually became the victims of colonialism. The Euro-Asian, and more specifically the Indo-European, encounter over the three hundred-year period between 1500 and 1800 was a historical process with extremely significant and wide ranging implications for both sides. The ‘gains from trade’ tend to become much more substantial in special situations such as in the case of the Euro-Asian trade in the early modern period. The composition of the trade with Europe remained unchanged, and except for the ‘unrequited’ part of the exports financed through the investment of the Bengal surplus revenues, the ‘bullion for goods’ character of the trade continued to be valid, though in a more restrictive and limited way. As the Industrial Revolution began to mature in Britain, more fundamental changes followed. From the second quarter of the nineteenth century onward, India began to lose the European market for its textiles.
