The Spice Route: How spices changed the world

Spices are an integral part of flavouring a meal, but some spices have been part of history and changed the world. Did you know that it was the spices from India that led to the creation of the modern-day Stock Exchange? Or that nutmeg has an intrinsic connection with New York? And you may not have known that it was a spice trade that led to the creation of the richest company in the planet. Well, the common thread that binds these three facts is spices and India’s deep-rooted connections with the same. 

Spices like cardamom, clove, and cinnamon, were mainly grown in India, including Coorg, and parts of Asia from ages. From the ancient Greeks to the Romans spices from India were in great demand in Europe. So how do these spices get to Europe? “The Arabs, who were the early traders, picked up the spices, from the Malabar Coast of India and took them to the Middle East by sea and by the land route from Istanbul and transported it to Europe. But in the 1400s, there was a change of guard in Turkey. The new rulers, the Ottoman Empire did a blockade of trade from Asia to Europe, leading to a shortage of spices in Europe, making the Europeans, extremely desperate. This is when a lot of European royal families started to fund voyages to find the promised spice land, India”. 

In 1492, King Ferdinand and Queen Isabella of Spain sponsored Christopher Columbus who set sail to India and in his pursuit for spices took the wrong turn and ended up finding America. But the country that eventually found the sea route to India, with the Portuguese with Vasco de Gama who came to India in 1498 through the tip of Africa. And the Portuguese wasted no time in monopolizing the spice trade. However, in the late 1500s, Spain, invaded Portugal and cut off the supply of spices to Netherlands. As the Dutch had to find their own way to get to these spices. And that is when they decided to make their own voyages to India. But there was a problem as these voyages were extremely expensive as it involved building massive ships with a large crew and associated supplies. And even if you got all of them right, they lost a lot of these ships in journey.

In 1602, a group of Dutch merchants came together to form a company called Vereenigde Oostindische Compagnie (VOC) which in short was the Dutch East India Company. This company came up with the novel idea to raise money and for the first time in history, they introduced a concept of a stock, which is nothing but a piece of paper. When exchange for money, it promised a part ownership in the company and a part of future profits. “They floated this idea to the people of Netherlands and raised 6 million guilders which is approximately 360 million dollars today. And that made VOC the first company ever to issue stocks. And to ensure that the people could trade in these stocks, they set up the world's first ever stock exchange in Amsterdam, the Amsterdam Stock Exchange,” explains Parameswarappa. This innovation changed the world forever and today stocks and stock exchange are the cornerstone of modern-day capitalism. And all this had its origin in, well no prizes for guessing, spices. And if you are wondering, whatVOC did with all the money that they raised, they funded a series of voyages to India and Asia for the spice trade and had a strict monopoly on the state for about 200 years and raked in huge profits. At its peak, it was worth more than 7.9. trillion which is more than the top 20 companies of today. And that is how profitable the spice trade was.

In fact, during the 1600s, nutmeg was in great demand in Europe because it was believed to be a cure for the bubonic plague. Incidentally, in the 1600s, the Dutch had bought a swampy island in America which they named as New Amsterdam, but they were keenly eyeing, a tiny island in Indonesia, called Run as it was one of the ten islands in Indonesia which was the sole producer of nutmeg in the world. The British and the Dutch then came to an agreement and decided to exchange these islands. The Dutch ended up transferring New Amsterdam to England in exchange for Run, which give them a complete monopoly on the nutmeg trade. The British wanting to make New Amsterdam their own, decided to call it New York, the financial capital of the world. So, the next time you are in a crowded Spice Market and are caught in the riot of colours and strong aroma of spices spare a thought for how spices changed our world!