Ancient Sri Lanka was, in my view, primarily a trading and manufacturing nation, not an agricultural one. R.A.L.H. Gunawardana has pointed out that the greatest activity in irrigation tanks and canals took place in the third to ninth centuries. This period coincides with a flourishing period of trade. He says the funds for building came from trade.

Sri Lanka was strategically situated in the Indian Ocean, at the meeting point of the great sea routes from the East and West. These routes ran from the Mediterranean, along the Persian Gulf, Red sea, Arabian sea, Bay of Bengal and South China sea and ended at China. The monsoon was used for sailing. Ships would sail East using the SouthWest monsoon. The returning monsoon would bring the ships back.

Sri Lanka‘s long coastline had many bays and anchorages on its South, West and Eastern coasts which were hospitable to ships going on these routes. They provided safe anchorage during both monsoons. During the Northeast monsoon, when conditions in the Bay of Bengal were rough, vessels could go to the western ports. In the southeast monsoon, they could go to the eastern ports. Carswell surveyed 54 ports of west and southern India and found that most were totally unsuitable in terms of natural features. He said that Sri Lanka ports offered greater protection to ships than the ports of west India. Sri Lankan ports were also convenient for taking ships to various places in the Indian subcontinent and facilities for this were available.

The East-West trade route was divided into three segments, the east coast of Africa, the West coast of India and the route from Bay of Bengal to China. Each route had a chain of trading ports. From the 2nd century AD Mantota in Sri Lanka and Bambhore in Pakistan were the main South Asian emporia in this chain. Sri Lanka was therefore a centre of transit trade.

Rome controlled the trade route to India up to the 4th century AD. Romans set up several trading centres in India including an extensive trading emporium at Arikamedu near Pondicherry, South India. Thereafter, from the 4th to the 7th century AD, the trade scene was dominated by Persia (Iran) and Ethiopia. A powerful Ethiopian trading empire known as the Auxmite kingdom had come up. This empire consisted of northern Ethiopia, Sudan and Southern Arabia. Its capital was at Aksum, situated north of Addis Ababa. This empire overlooked the Red sea and controlled Bab el Mandeb which was at the junction of the various sea routes.

The Persians and Ethiopians moved trade from the south west of India to the south-east and by the 6th century AD they had settled on Mantota as the main port for east-west trade. Commercial activity had begun to increase on this route, because the overland route from China had got into trouble. The Persians established a settlement in Sri Lanka. There was a Persian Christian (Nestorian) church with a presbyter sent from Persia. In 7th century the Indian Buddhist monk, Vajrabodhi saw a fleet of 35 Persian ships at Mantota waiting to sail for China.

Sri Lanka became an important trading centre for the merchants of Persia, Ethiopia, China and India. They exchanged their commodities in Sri Lanka. The goods exchanged included perfume, horses and wines from Persia, silk from China and minerals from India. The Egyptian monk Cosmos Indicopleustus writing in the 6th century said that Sri Lanka was the most important entreport in South Asia during this time. He said that from ‘all India, Persia and Ethiopia, many ships came to Mantota.’ He described Sri Lanka as ‘the great emporium which was connected by seaways with trading marts over the world.’ I think that this entrepot trade would have brought in a hefty income.

The trade situation changed in the 8th century. Arabs conquered Persia and took Persia’s place in trade. Sri Lanka continued to be a part of the trade route. A letter preserved in the Cairo Geniza dated 1130 AD says that a merchant in Aden constructed ships and sent goods in them to Sri Lanka. The letter says that in addition, three Jewish goldsmiths travelled in this ship. In the 12th century, China also joined the trade network. Chinese ships came into the Indian Ocean in 1330. They went straight to trading centres in West India, like Gujarat. Due to this the intermediaries handling the Chinese trade lost their position and Sri Lanka lost it monopoly as a trading hub. Sri Lanka was no longer a flourishing entreport centre. However, according to the records, customs and trade revenues jumped, indicating increased trading activity.

Sri Lanka had many ports which were used for trade. There were a number of port towns as well. Mantota was a major port from about 2nd century BC. A sea route along the eastern coast of India from Tamralipti to Mantota started around 5th century AD. Mantota was the chief port of Rajarata up to the middle of the 13th century, at least. It had declined in importance by 15th century. The eastern ports of Sri Lanka were also in use. They opened into the Bay of Bengal. Sea routes to Southeast Asia and China had developed by the 5th century and Trincomalee (Gokanna) was known to merchants by then. Trincomalee was a natural port.

Sri Lanka had a second natural port at Galle. I think that Galle would have been important from Anuradhapura times. However, historians state that Galle and Colombo ports came into the picture in the 10th century. They say that Galle had become important at least by the middle of the 14th century and was a well established port by the 15th century. The sandesaya poems describe it as a town with wide streets and shops of all kinds.

Historians say that Devinuwara (Dondra) was an important commercial port from 13th to the 15th century. The Devinuwara inscription of Parakrama bahu II (1236-1270) contains regulations to prevent the evasion of customs duties at this port. It stated that those coming from foreign countries were not allowed to set up place of business without permission and royal officials were required not to accept gifts form foreign merchants.

Weligama is first mentioned in the time of Parakrama bahu I (1153-1186), as a place where affluent merchants lived. It came into prominence as a port around the 12th century. Kalyani inscription states that a ship from Burma came in at Weligama. Tisara, Paravi and Kokila sandesas show that Weligama had become an important and prosperous port by about 15 century. The sandesas also speak of the ports of Beruvala, Bentota, Wattala and Chilaw. According to Paravi, Gira and Kahakurulu sandesa, large groups of sailing ships could be observed regularly from several places on the western coast. However, I think that the ports in south and southwest Sri Lanka would have been in use very much earlier. Ruhuna was a flourishing centre of trade in the Anuradhapura period. The ports closest to the gem bearing areas were in the South and Southwest such as Galle and Matara. In addition, R.A.L.H.Gunawardana says that the southern ports caught the trade that ran horizontally from China to Madagascar and East Africa.

Sri Lanka had a thriving import-export trade from the Anuradhapura period onwards. Mahavamsa speaks of the merchant Kundala who imported camphor, sandalwood, and other items during Dutugemunu's reign, (161-137 BC). Luxury cloth for the use of royalty and the nobility were imported from eastern India and China. Cosmos (6th century) said that ships regularly visited Sri Lanka for its own products as well as for what it imported specifically for re-export. Idrisi who was a contemporary of Parakrama bahu I said wine from Iraq was imported by the Sinhala king, who purchased it with his wealth and resold it. Saddharmalankaraya (13th century) spoke of traders importing perfumes, musk and sandalwood.

Sri Lanka exported a wide range of local items. In the 12th and 13th centuries , Muslim traders resident in Sri Lanka collected rice indigo from Trincomalee, chaya root and palmyrah from Jaffna, chank shells, arecanut, betel leaves, ebony, calamander and sapanwood from Puttalam, cinnamon and precious stones from Colombo, coconut oil and coir from Beruwela, ivory and elephants from Galle. The Memoirs of Gaspar Corea show that when Lorenzo de Almeida entered the harbour, in the 16th century, many vessels belonging to Muslims were being loaded with cinnamon, small elephants, various kinds of wood and green and dry coconuts.

Spices, such as cloves, cardamom, pepper, nutmeg and cinnamon were exported. Also various types of wood, such as fine, decorative, aromatic wood. Also construction woods, (hardwood) such as sandalwood, camphor, satinwood, ironwood, mangrove and teak. Ivory and tortoise shell were in demand in Iran, Mesopotamia, Egypt, the Levant and Rome. Aloe wood and medicinal herbs from Sri Lanka were prized by Persians. They also liked our treacle.

According to Megasthenes, Sri Lanka exported elephants to India in the 3rd Century BC. He said that Sri Lanka had huge herds of elephants of the ‘largest size’. They were more powerful, more intelligent and bigger than those in India. They were exported in specially constructed boats. The Portuguese writer Barbosa (16th century) said that the merchants of Coromandel, Vijayanagar, Malabar, Deccan and Cambay went to Sri Lanka and bought elephants from its king.

The earliest foreign reference to our cinnamon is in a 10th century text by the Arab writer Shariyar. Several letters written by Jewish merchants dated to 12th century, found in Cairo refer to Sri Lanka as a source for cinnamon. Cinnamon is mentioned in a letter written by 13th century missionary John of Montecorvino. Ibn Batuta (14th century) said that people from ‘Mabar’ took away cinnamon from the island by ‘gifting’ cloth to the king. Coconuts were exported from the 13th century.

Sri Lanka also participated in the carrying trade. The Sinhalese were a seafaring people. Several Sinhala and Pali inscriptions refer to Sri Lankans who sailed to south east Asian kingdoms. They had their own ships and were skilled at navigation. Mahavamsa says that in the 2nd century BC seven ships, laden with valuable cargo, returned in one day to a port in Rohana. Cosmos (6th century) said Sri Lanka sent out many ships of its own. From the sixth century, Sri Lanka, India and Sri Vijaya (which included present Java and Sumatra) were the intermediaries in the Indian Ocean trade of South and Southeast Asia. Exports from Southeast Asia were transported in Sinhala ships. Sinhala ships brought back elephants from Burma in the 12th century.

Procopius (6th century) said that silk from China was transported in Indian and Sri Lanka ships. According to Chinese texts, the largest ships arriving in China were from Sri Lanka. They were about 200 feet long and able to carry 700 to 800 men. There was a single run from Mantota to Kunlun in Malaysia, a longer run all the way to China. There were also visits to ports in between. The text of Akhbar-al-Sin-w-al-Hind indicated that in the medieval period, some places in Southeast Asia were visited by trade expeditions from Sri Lanka independent of the China route. The text says that ships reached Kalah, which was on the west coast of Malaya peninsula, via Nicobar. Later on the carrying trade went into the hands of the Muslims and even Sri Lanka‘s own exports were transported by them.

The Sinhala king paid great attention to trade. The king had a direct interest in it. He held the monopoly in the trade of gems, pearls and elephants. Parakrama bahu I sent ‘ships to sell gems abroad.’ The king benefited in other ways as well. A good chunk of his revenue came from it. Taxes are said to have been collected at nine ports in the Dambadeniya period. The Nainativu Inscription of Parakrama bahu I, said that foreign merchants were welcome, and were assured of protection. That elephants and horses were of special interest to Sri Lanka and vessels carrying them received concessions. However, in the case of shipwreck, the king would get a fourth of the horses and elephants and half of all other cargo.

The king supervised the export trade. Parakramabahu I had placed the localities which held export commodities under a separate department. These localities included the pearl and gem bearing districts and the Malaya rata which held elephants and forest products of various kinds. The merchandise thus collected from these territories was sent in ships to be sold abroad. Trade was also included in diplomatic relations. Vijayabahu I had initiated a gift-trade relationship with Burma and received camphor, sandalwood and cloth in exchange for the products he sent.

The king reacted strongly whenever Sinhala trade was obstructed abroad. Parakrama bahu I conducted a raid on lower Burma (Myanmar) on three counts, restrictions to the elephant trade, rude treatment of Sinhala traders, and the seizing of a Sinhala princess who was on her way to Cambodia. The raid was successful. Burma gave in, and stated that it was prepared to give any number of elephants to Sri Lanka. Sirisena thought that this strike may have been due to trade rivalry. Sri Lanka, Myanmar and Cambodia were engaged in trade in the Bay of Bengal and all three were interested in trade with China. Myanmar and Cambodia were definitely trade rivals. The overland route in Southeast Asia was controlled by Myanmar. In a later period, Parakramabahu VI (1412-1467) invaded a port in Tanjore, South India, because Sinhala traders had been humiliated there. These expeditions show that the Sinhala king intervened and gave protection to the Sinhala traders stationed abroad.

Trade influenced political decisions. When the trade sector moved from the Arabian sea to the Bay of Bengal the capital moved from Anuradhapura to Polonnaruwa and the east coast developed. The Mahayana centres which came up during this time were all situated on the east coast and its interior. When trade moved back to the West, the Sinhala king also went to the West. From the 13th century, the Sinhala king started to develop the Western coast (Dhakkinadesa). The gem and pearl industry were anyway in this region. Mantota became important again. Large scale commercial plantations of coconut, jak and cotton were started. There was great emphasis on planting of coconut gardens and groves of jak trees. Land grants to temples at this time mention crops such as coconut and jak, as well as gems. A new class of landowners, who owned land that grew commercial products, emerged.

Society respected the trade sector. Trade was often mentioned in Sinhala literature. Sikhavalanda vinisa (5th century) referred to trade as a noble occupation. Pujavaliya (13 century) spoke of faultless trade. Saddharmaratnavaliya (13 century) stated that there was no wealth if one did not indulge in trade. Business transactions and agreements were usually written down and the documents were destroyed when the transaction were completed. There was a black market (sora velendam).

I think that a strong merchant and trading sector was in existence from very early on. The Maha-alagamuwa Inscriptions point towards the emergence of the entrepreneur. They refer to accountant, banker, full time specialists involved in production and commerce, custodians of the storehouse and guilds. External trade was, at least in part, in the hands of the private sector. Nicholas says that many of the ships were privately owned. Trade was very lucrative. Some merchants became very rich. Sahassavatthupakarana (5th century) speaks of one Nandi, a merchant residing in Mantota. He undertook trade expeditions lasting as long as three years. His house is described as a palace. Another merchant is referred to as Vanija Kumara or merchant prince. Some merchants had artistic leanings as well. Two merchants composed verse at Sigiriya in the eighth century.

Merchants held an important place in politics and society. Paranavitana points out that with the exception of the Mahavamsa, all accounts of the early period make the merchants take a leading part. The earliest brahmi inscriptions indicate that the founders of the ancient Sinhala royal families had mercantile associations. The title, 'gamani', borne by members of the royal family, is used for heads of mercantile missions. The title ‘Parumaka’ also points in the same direction. In the Anuradhapura period, the person representing the common people who poured water on the king at the consecration was a Setthi. The term Setthi was used only for high ranking merchants. There were mercantile corporations. Hopitigama Inscription shows that mercantile corporations were active in the 10th century.

The merchant sector continued into the medieval period. ‘Vyaparayo’ are mentioned in the medieval literature. Pujavali spoke of velenda kula. Trade was very lucrative and wealth was a source of power in this period as well. The merchants had a seat in the Kings Council in Polonnaruwa. Corporations were given the power to impose fines, arrest murderers, and assist the royal officials in the administration of justice. The merchants were sometimes difficult to control. Parakrama bahu I found that the merchants in Weligama wanted to manage their own affairs without paying taxes and without any control from the state.

The Sinhala merchant went overseas in pursuit of trade. Mahavamsa related how a young merchant of the sixth century went to Baranasi in north India for trade. Tiriyaya rock inscription, (dated to the latter part of 7th century or beginning of 8th) speaks of companies of merchants who were skillful in navigating the sea and in buying and selling. They had sailing vessels of diverse sorts which were laden with goods. Bopearachchi states that pottery inscribed in Sinhala prakrit (dated from 2nd century BC to 1st century AD) were found at Arikamedu, Kodumana and Algankulam on the east coast of India. He says this confirms the presence of Sinhala traders at these seaports. Liyanagamage says there is a South Indian inscription which refers to merchants of Sri Lanka who had camped in a place called Asittapatti in South India.

Moira Tampoe says that Sinhalese merchants were visiting China up to the 8th century, to bring back goods. One of the Sinhala envoys to Rome had said that his father had gone on several trips to China. Sri Lanka merchants used to frequent Javanese ports in Surabaya region in the 11th century. An inscription from East Java, dated 1021, showed that Sinhala traders were in Java. Balawi inscription dated 1305 mentions Sinhala traders. Rasavahini (13th century) refers to a merchant of Anuradhapura who went to Burma for trade. The Sinhala trader also went to Adulis in Ethiopia during the time of the Auxmite empire. Adulis was a cosmopolitan centre visited by foreign merchants from India, Arabia and Egypt. V.L.B. Mendis says the merchants at Adulis included Sinhala merchants.

The Sinhala trader may also have been a part of the various merchant combines operating in Asia during this period. The Nanadesi merchants were prominent in south India and Sri Lanka in 11th and 12th century. Nandesi means "persons from different countries." Indrapala says that that there is a ‘very strong possibility’ that the Nandesi included Sinhala traders. There is a Sinhala record on Nandesi. It is fragmentary with only the preamble surviving.

There has been a sizeable manufacturing and processing sector. There was a textile industry catering to external and local demand. A Javanese inscription of late 9th century refers to ‘Sinhala cloth’ King Silamaghavanna had sent the Chinese emperor a gift of ‘very fine white cotton cloth.’ Cotton was grown extensively and there is evidence to show that from 6th century BC to 14th century AD, women were spinning and weaving with cotton thread. Most often this work was done at home. There was factory production too. Papancasudani (5th century) speaks of weavers working together in a ‘sala’ (factory).

Sri Lanka also produced a very fine cloth which resembled silk. Fa Hsien notes that the corpse of a monk was wrapped in "clean white hair cloth, almost like silk" The Rajatarangini records that in the reign of king Mihiranga ( 5th century), a variety of fine cloth resembling silk, was imported from Sri Lanka for the use of high born ladies in Kashmir.

Gems were a major export throughout the ancient and medieval periods. Rubies and sapphires were particularly valued. Ptolemy (140 AD) refers to the gem industry of Sri Lanka, with special mention of beryl and hyacinth gems. The gems were not cut, as in modern times, but shaped into beads. Beads made of semi precious stones were found in excavations at Anuradhapura, Kantarodai (Kadurugoda) Mantota, Tissamaharama and Ridiyagama. Gems were also used to make seals, some were engraved. Gems were obtained through panning. P.G.Cooray (1967) remarked that this method of gem mining, though simple and unchanged for centuries, was well adapted to local conditions, involving little capital outlay and only seasonal activity.

Sri Lanka was also noted for its pearls. According to Greek, Sanskrit and Tamil literary sources pearls from the Gulf of Mannar were among the best and most valuable in the ancient world. The export of gems became a royal monopoly. Rajasekhara writing in the ninth century said that the Sinhala king had two store houses of wealth, gems and pearls. Mahavamsa records that Devanampiyatissa sent five types of gems and eight types of pearls to king Dharmasoka. Parakramabahu I exported gems and precious stones.

Sri Lanka possessed an admirable tradition of metal crafting. There are references in the inscriptions to coppersmiths, tinsmiths, ironsmiths and goldsmiths. Major advances had been made in metal technology by 5th century, AD if not earlier. The Buddhist commentary, Kankavitarani (5th century) refers to metal objects of iron, copper, and alloys. It gives a list of the metal objects which monks should possess. This list runs to over fifty items. Some were for agriculture, some were household items, like plates, pots, and vessels. Some were tools, implements and instruments including scissors and tweezers. There may have been specific implements for specialised crafts. There were metal smith instruments.

The steel industry catered to both local and export markets. There were steel medial instruments in use in ancient Sri Lanka. The Arab writer Al Kindi (9th century) said that Sarandibi steel was used to make swords in Persia and Yemen. Juleff suggests that they were made out of the wind powered steel manufactured in Samanalawewa between 9th and 11th centuries. She says that the Samanalawewa furnaces would have provided steel in quantities exceeding local requirements.

The metal smiths had a fairly high income and social standing. Ganekanda inscription in Kala Oya region, dated to first century BC or AD mentions a metal smith who was also the vice president of a corporate body. There were craftsmen guilds. At Labuatabandigala, near Kebitigollawa, there is an inscription referring to ‘the great copper working guild." The inscription suggests that the guild functioned as a bank.

In my view ancient Sri Lanka had export processing zones. Kala oya area appears to have functioned as one. Certain varieties of mineral stone not found in Sri Lanka, such as carnelian came there. Carnelian does not occur in Sri Lanka and was imported from south Deccan. It was considered a prestige item. There probably was a trade zone at Mantota as well. Mantota has had an iron industry and a large scale manufacture of beads. the pearl fishery and chank industry were close by. Ralph Pieris took the view that the Sigiriya region would have contained an export processing zone. Sigiriya had yielded a ‘unique’ find of foreign coins.

Rasavahini (13th century) refers to a merchant of Anuradhapura who went to Burma for trade. The Sinhala trader also went to Adulis in Ethiopia during the time of the Auxmite empire. Adulis was a cosmopolitan centre visited by foreign merchants from India, Arabia and Egypt. V.L.B. Mendis says the merchants at Adulis included Sinhala merchants.

The Sinhala trader may also have been a part of the various merchant combines operating in Asia during this period. The Nanadesi merchants were prominent in south India and Sri Lanka in 11th and 12th century. Nandesi means "persons from different countries." Indrapala says that that there is a ‘very strong possibility’ that the Nandesi included Sinhala traders. There is a Sinhala record on Nandesi. It is fragmentary with only the preamble surviving.

There has been a sizeable manufacturing and processing sector. There was a textile industry catering to external and local demand. A Javanese inscription of late 9th century refers to ‘Sinhala cloth’ King Silamaghavanna had sent the Chinese emperor a gift of ‘very fine white cotton cloth.’ Cotton was grown extensively and there is evidence to show that from 6th century BC to 14th century AD, women were spinning and weaving with cotton thread. Most often this work was done at home. There was factory production too. Papancasudani (5th century) speaks of weavers working together in a ‘sala’ (factory).

Sri Lanka also produced a very fine cloth which resembled silk. Fa Hsien notes that the corpse of a monk was wrapped in "clean white hair cloth, almost like silk" The Rajatarangini records that in the reign of king Mihiranga ( 5th century), a variety of fine cloth resembling silk, was imported from Sri Lanka for the use of high born ladies in Kashmir.

Gems were a major export throughout the ancient and medieval periods. Rubies and sapphires were particularly valued. Ptolemy (140 AD) refers to the gem industry of Sri Lanka, with special mention of beryl and hyacinth gems. The gems were not cut, as in modern times, but shaped into beads. Beads made of semi precious stones were found in excavations at Anuradhapura, Kantarodai (Kadurugoda) Mantota, Tissamaharama and Ridiyagama. Gems were also used to make seals, some were engraved. Gems were obtained through panning. P.G.Cooray (1967) remarked that this method of gem mining, though simple and unchanged for centuries, was well adapted to local conditions, involving little capital outlay and only seasonal activity.

Sri Lanka was also noted for its pearls. According to Greek, Sanskrit and Tamil literary sources pearls from the Gulf of Mannar were among the best and most valuable in the ancient world. The export of gems became a royal monopoly. Rajasekhara writing in the ninth century said that the Sinhala king had two store houses of wealth, gems and pearls. Mahavamsa records that Devanampiyatissa sent five types of gems and eight types of pearls to king Dharmasoka. Parakramabahu I exported gems and precious stones.

Sri Lanka possessed an admirable tradition of metal crafting. There are references in the inscriptions to coppersmiths, tinsmiths, ironsmiths and goldsmiths. Major advances had been made in metal technology by 5th century, AD if not earlier. The Buddhist commentary, Kankavitarani (5th century) refers to metal objects of iron, copper, and alloys. It gives a list of the metal objects which monks should possess. This list runs to over fifty items. Some were for agriculture, some were household items, like plates, pots, and vessels. Some were tools, implements and instruments including scissors and tweezers. There may have been specific implements for specialised crafts. There were metal smith instruments.

The steel industry catered to both local and export markets. There were steel medial instruments in use in ancient Sri Lanka. The Arab writer Al Kindi (9th century) said that Sarandibi steel was used to make swords in Persia and Yemen. Juleff suggests that they were made out of the wind powered steel manufactured in Samanalawewa between 9th and 11th centuries. She says that the Samanalawewa furnaces would have provided steel in quantities exceeding local requirements.

The metal smiths had a fairly high income and social standing. Ganekanda inscription in Kala Oya region, dated to first century BC or AD mentions a metal smith who was also the vice president of a corporate body. There were craftsmen guilds. At Labuatabandigala, near Kebitigollawa, there is an inscription referring to ‘the great copper working guild." The inscription suggests that the guild functioned as a bank.

In my view ancient Sri Lanka had export processing zones. Kala oya area appears to have functioned as one. Certain varieties of mineral stone not found in Sri Lanka, such as carnelian came there. Carnelian does not occur in Sri Lanka and was imported from south Deccan. It was considered a prestige item. There probably was a trade zone at Mantota as well. Mantota has had an iron industry and a large scale manufacture of beads. the pearl fishery and chank industry were close by. Ralph Pieris took the view that the Sigiriya region would have contained an export processing zone. Sigiriya had yielded a ‘unique’ find of foreign coins.