What was the chief economic foundation of the triangular commerce between India, China and England ?
Opium
Opium was the foundation of the triangular trade — option 2.
The problem the trade solved. Britain had developed an enormous appetite for Chinese tea, and also bought silk and porcelain. China wanted almost nothing that Britain produced and insisted on payment in silver. The resulting drain of bullion was intolerable to the East India Company, and the solution it found was to sell China something it would buy.
How the triangle worked.
| Leg | What moved |
|---|---|
| India to China | Opium, grown under Company monopoly in Bihar and Benares and auctioned at Calcutta |
| China to Britain | Tea, silk, porcelain, paid for with the silver earned from opium |
| Britain to India | Manufactured goods, above all Lancashire cotton textiles |
Each leg financed the next, and no silver had to leave Britain.
The Bihar connection. This is not incidental to a BPSC paper. The Company’s opium monopoly was centred on the Patna and Benares agencies, and cultivators across Bihar were required to grow poppy on contract at prices the Company fixed, with advances that kept them in debt. The processed cakes were shipped down the Ganga to Calcutta for auction. Opium became one of the largest single sources of revenue for the Government of India.
The consequences. Chinese attempts to stop the traffic led to the First Opium War (1839-42), ending in the Treaty of Nanking, the cession of Hong Kong and the opening of the treaty ports, and to the Second Opium War of 1856-60. For India, the arrangement meant that peasant agriculture in the Gangetic plain was reorganised around an export crop the growers did not choose, while the finished-textile leg of the triangle undercut Indian handloom weaving.
Why the other options fail. Silk moved from China to Britain but was not what financed the system, and black pepper belongs to the older Malabar spice trade with Europe, not to this triangle.
Hence, the answer is Opium.
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