One of the principal outcomes of the great discoveries of the closing years of the fifteenth century was the rise of a pre-modern world economy. It was the almost simultaneous discovery of the Americas and of the all-water route to the East Indies via the Cape of Good Hope that had brought the three potential constituent segments of this economy, namely Europe, the New World and Asia, together for the first time. By providing a wide range of goods for both Europe and the New World, and by absorbing in return an important segment of the New World output of silver, Asia played a key role in the creation and the subsequent successful functioning of this global network of exchange. The nature of the relationship between Europe and Asia during this early period was essentially one of mutual advantage with each side perfectly capable of a market-determined response structure and rational process of decision making.

The principal agencies instrumental in the running of the Euro-Asian commercial network in the early modern period were the European corporate enterprises – the Portuguese Estado da India in the sixteenth, and the Dutch, the English and the French East India companies in the seventeenth and the eighteenth centuries. A certain amount of Euro-Asian trade was also carried on by private European traders, though it would seem to have been quantitatively significant only in the case of the Portuguese private traders. Traditionally, pepper and other spices such as cloves, nutmeg and mace had accounted for an overwhelming proportion of the total Asian imports into Europe.