The Portuguese possessed Mumbai in 1535 from the Gujarath Sultan for trade, where coconuts and coir were traded. The British who came to India later understood the important of Mumbai and tried to possess with the help of force but could succeed but when they controlled Mumbai, they began to trade Salt, rice, irony, cloth, lead and sward blades with internal area and outside of India. The trade commodities want on increasing day after day, within the short span of time Indian handicrafts because popular in and outside of markets. Indian cotton, silk and muslin became the export commodity to European Countries like England, Italy, Spain, Portugal and Germany. As a matter of fact, Indian cotton was popular since the ancient civilization because of fertile land and conducive environment in the country. Areas like the
Deccan, Punjab, Peshawar, Nagpur and Telangana produced must cotton. The trade in cotton got boosted after the Industrial revolution began in England. The British Government introduced the commercialization of agriculture after the American civil was broke out in 1860. The British transported the row cotton to Mumbai and shifted it to England. Thus Mumbai became the centre of cotton trade with various countries specially China and England. Mumbai had trade relations with China. Since 1723, the British imported Chinese tea to India as well as exported it to Europe. During the last decade of the eighteenth century China suffered severe famine which forced her to cultivate food grain in place of cotton, this lad China to import Indian row cotton. Although Cotton was grown plentiful in Central China but shipping cotton from central China to Guangdong and Fujian the Southern provinces was costly than shipping cotton from India to China. This export of cotton enhanced after Surat lost its importance as trading part to Mumbai. The heyday of trade in raw cotton was between 1787 and 1805, the value of exported cotton was above between 1787 and 1805, the value of exported cotton was above one hundred and fifty lakh, average eighty thousand bales of cotton worth Rs.65 lakha was exported every year from Mumbai to China and the raw cotton exported to England was more than four times. Although, the company had monopoly on cotton trade from Mumbai to England, the cotton trade in western Maharashtra and its shipping was in the private houses or agencies of Mumbai like Forbes Smith and Law, Alexander Adamson and Bruce Lawceft. In order to encourage the cotton trade, the Government of Mumbai had reduced customs duties from six to two and half percent in 1795. The merchants involved in cotton trade in Mumbai preferred consignment system in which they consigned their goods to agents or agency houses, both British and Indian, who in turn took full responsibility of managing trading operations overseas and returning profit to the consignors in exchange for commission. This system encouraged the people who had no knowledge of cotton trade, unable to speak English or any foreign language and had no substantial capital to engage them in long distance trade in cotton.
In 1797, the Bombay courier said that cotton trade in Mumbai boosted the fortune of Mumbai as it determined the rhythm of life in the late eighteenth century and sound early decades of nineteenth century Mumbai, for which it gave some credit to the mercantile excellence of the Mumbai port. The Bombay Courier further said that the cotton used to come to Mumbai in a faily dirty state, it was cleaned, shifted to the cotton screws situated near the docks to be tightly compressed into bales, loaded into huge ships and exported to either China or England any other country. Although the cotton trade in Mumbai profited the Bombay merchants it also faced problems like seasonal monsoon winds, sea typhoons and pirates. It is clear from the latter dated 12th June, 1800 of Mumbai merchants to the Governor of Mumbai extending protection from them, who shifted their base to the straits of Malacca later. This problem was also compounded during the Napoleonic wars in Europe. The cotton trade of Mumbai also faced other problems in Chinese market like the entry of domestic cotton of China and the cotton exported by the East India Company from Bengal, which was the better quality and fetched higher price. This led Mumbai cotton to drop in its export china and other parts of the industrialized world.
The export of raw cotton required the building of huge ships capable of carrying this bulky commodity in large quantity. This trade gave a major boost to the ship building industry in Mumbai in which names like (1) Lowjee Waida, (2) Royal Chalotte, (3) Good, (4) Success, (5) Bannajis, (6) Ready moneys, (7) Camas, (8) Dadiseths, (9) Jamsethjee Jejeebhoy and (10) Dorabjee Rustomjee Patell – were prominent the ship building industry in Mumbai. The ships built of Malbar teak and the Mumbai Country lasted for hundred years and weighed between five hundred and one thousand tones. The resisted water logging and damages from gun fire, which proved useful during the Napoleoric Wars. As a matter of fact, in 1736 the East India Company had invited Lowjee Wadia, a Parsi, skilled in shipbuilding to take change of building and repairing of ships in Mumbai. this Wadia family made a transition from shipbuilders to shipowners under Pestonjee Bomanjee, the grand son of Lowjee Wadia, who owned around six big ships wheras Banaji family owned as many as forty country ships.