This path-breaking work on the social and economic history of colonial India traces the evolution of north Indian towns and merchant communities from the decline of Mughal dominion to the consolidation of British empire following the 1857 'mutiny'. C.A. Bayly analyses the response of the inhabitants of the Ganges Valley to the upheavals in the eighteenth century that paved the way for the incoming British. He shows how the colonial enterprise was built on an existing resilient network of towns, rural bazaars, and merchant communities; and how in turn, colonial trade and administration were moulded by indigenous forms of commerce and politics. This edition comes with a new introduction.