Iran, on one hand, is located between Europe, Asia Minor, and the Mediterranean lands; and Central Asia, South Asia and Far East, on the other hand. It traditionally played an active role in trade between east and west. For instance, Silk Road starting from China approached to the Black Sea passing through Turkestan, northern Iran and Turkey; and the Spice Road initiating from India led to Mediterranean Sea crossing southern Iran. These roads, for centuries, were the general route of international trade from east to west until the fall of Byzantine Empire by Sultan Mehmet Fateh, the Ottoman, in 1453 AD, which were impaired. It was of the most significant factors of marine explorations and European navigation to Indian Ocean and Persian Gulf for less expensive access to eastern goods, especially silk and spices. Under such conditions, a new map of Iran’s trading routes was planned by the Safavids in early 16th century, influenced by political and, in particular, economic factors of the new age (post-exploration). The Indian Gurkani (Mughal Empire) situated in the east often challenged the Safavid on borders and strategic political- commercial territories, especially Kandehar. The fresh Uzbek state emerged in north east; their main struggling issue with the Safavid was dominance over Khorasan trade highway. Fresh Russian power was emerging in northern Iran; and Hashtarkhan was one of the commercially significant cities that played as the interface between Iran and Europe. In the south, with the arrival of European newcomers, led by Portuguese, Indian and Iranian materials in particular silk, were entered into Bandar Abbas and transferred to Mediterranean ports. In such conditions, international trade routes of the Safavid, in particular Shah Abbas depended on international relations and communications with other states; this was of the main significant variables of the positive or negative role of Iran in choosing trade routes.

Mercantilism; policy privilege and priority to economy

European states, in 16th and 17th centuries, followed a particular plan for power and wealth enhancement, which basically founded on monitored business (trading). The theory of business or mercantilism believe that a nation, true wealth is the amount of money or valuable metal reserves (deposits) of public or state. In other word, the higher the amount of gold and silver, the more powerful the nation. Therefore, states tried to firstly prevent gold and silver exportation; and secondly to import gold and silver. Thus, it required establishing economic borders and customs. In broad speaking, it means export and import computation and surveillance i.e. any nation tried to properly benefit from international trade. For instance, in turn for an export, a more valuable commodity is imported; or it is exchanged by money; or adopts an independent policy to be independent of others.

Economic nationalism or the so-called mercantilism resulted from government function in the beginning of new century in Europe, which believed in the superiority and primacy of politics over economy. This view is essentially a statebuilding doctrine and claims that the market should be subjected to government benefits and economic relations are determined by political factors (Omidbakhsh, 2005; 291).

Iran was thriving under Shah Abbas I such that historical pundits considered early decades of 11th century AH (the time of Shah Abbas I) (1571–1629) as the age of economic prosperity and Iranian political authority in the Safavid era. Political stability, serious centralization, as well as interior security, especially toll system, led Iran’s economy toward prosperity and promotion. One dramatic economic characteristic of this age was business growth followed by economic prosperity. Increased agricultural and industrial productions and developing internal and external transactions caused increased market population, manufacturing professions, trading and money circulation. By which several cities obtained international credit. Though, the measures taken by Shah Abbas I may not go precisely with mercantilism theorists, some of these measures, particularly political economy, international trade as well as reclaiming and controlling strategic areas may be evaluated as preserving the position and national and economic interests.

Shah Abbas and Silk production of international market

Prior to the advent of speculation, many communities communicated through wars and campaigns and or traded over lands. Since human societies relied upon natural economy and regarding the economic independence of most communities; as a result, interaction was too little. Business emergence and development, marine dominance in addition to developing firearms and ships equipped with cannon, guided independent communities and natural economies toward new circuit. Emergence of commercial monopolies and large companies influenced economic business and trading of other nations; the politic has also changed by the influenced economy and economy (Saghafi, 1996; 91).

In the Safavid age, silk, as the main national wealth, was exported to European countries as a highly requested commodity; it was produced in Georgia, Khorasan, Kerman, Gilan and Mazandaran. According to Chardin, “the amount of annual product was over 22.000 Adl- per Adl equals 286 Lyra- and silk total value exceeded 12 million, which annually increased” (Chardin, 1993–95; 93) since silk textile production progressed in Europe such that the existing raw materials were insufficient to meet their needs; therefore, it was necessary to import it from east, especially Iran, which turned into one of the main producers of raw silk around the world.

The silk business and industry was leading in the Safavid era, in particular by the time of Shah Abbas the Great. He figured out that a nation’s survival relies upon the army and the army may not resist unless the property is provided. Therefore, he intended to strengthen Iran’s economic fundamentals. As seen, the silk and trading were highly prioritized. Shah Abbas could boost the business through established political and economic security, creating inns, pirate fighting and road protection, progress and industrial growth supporting, and even by exempting people from tax paying. Silk, the strategic product was monopolized by Shah Abbas. In other word, he tried to support merchants through providing proper infrastructures including security of travelling traders importing silk from China and India (Bastani parizi, 1983; 115). This was not merely related to merchants; rather, raw silk manufacturers also benefited from the Shah’s support.

By developing internal capabilities and raising the production capacity suitable for foreign market, he obtained proper added production; further, he enhanced national wealth through exporting this added production. As seen, silk ranked first. Following silk production at international level, the second measure adopted by Shah Abbas was finding how to export it to European markets, which benefited a proper position due to the abundant influx of gold and silver resulted from ruining of civilizations such as Incas and Aztecs and requested for luxury productions like silk.

Armenians and international trade

Following the war between Iran and Ottoman (1604) and Shah Abbas withdrawal policy, Armenians were forced to migrate to Iran. The Safavid official credits stated Shah Abbas incentive of Armenian migration decree as merely a short-term military target. Molla Jalal Monajem Yazdi clearly writes that “the decree went into effect to made Chakhorsaad residents immigrate” (Minoreski, 1989; 191–192); it sought two purposes: first Roumieh was an oppressing army that may abuse people; second, the ruined area may prevent building the castle” (Monajem Yazdi, 1987; 27).

Shah Abbas exclusively monopolized silk trade for higher supervision on silk export and he utilized Armenian merchants for silk selling (Tavernier, 1957; 403–404). According to Tavernier and other European visitors “the Safavid internal (national) trade was held by Iranian and Jewish; while, international trade was monopolized by Armenians trading on silk (Tavernier, 1957; 596 and Della Valle, 1991; 49; Chardin, 1993–95; 1683). Carmelites report that Shah Abbas wished to assign silk export to those offering the highest price; and Armenian merchants, subsequently, announced the highest. Shah Abbas chose the more capable individuals and submitted silk cargos in term of individuals’ capacity to export to Europe and return the interests based on the fair rate determined by Shah; all expenditures of the business trip and the wage were also paid (Tavernier, 1957; 405; and Iskandar Beg Turkoman, 1971; 670). However, Tavernier believes that the rationale for selecting Armenian was not merely the fellowship; rather, the strong vigor and their moderate life are other effective factors, too (Tavernier, 1957; 404). Ferrier writes that “not only Armenians saved cash, but also benefited from an established system of credit facilities in cities situated on the way of their business” (Ferrier, 1973; 56).

Tavernier, on the significance of coins in the age of speculation and Armenian efforts in saving national interests emphasizes that “from Shah Abbas I to Shah Abbas II, silver coins were abundantly seen in Iran due to Armenian merchants (brought from Europe). But, in recent years, silver coins are rare as Armenians only imported gold Duka because they learned how to hide gold money in their garments to be safe from Ottoman pirates and to be free from several customs” (Tavernier, 1957; 364).

In general, international trade was exclusively owned by Armenians in the second half of the Safavid and they took the advantage of this benefit. Financial and commercial expertise of Armenians as well as financial relationships with Europeans provided this option; silk, which was the largest cash reserve for royal treasure was traded by Armenians. The other important point that may not be neglected and probably highly attracted Shah Abbas was that Armenians usually returned the business profit to Iran; whereas, other foreign merchants and firms did not follow this. Economic operation and profits of Armenians were such significant that Shah Abbas made them migrate to Isfahan to protect them from Ottoman violations or probably to prevent transferring of these clever people who were regarded as national resources to Ottoman; this incredibly enhanced the prosperity of this city (Pietro della Valle; 1991; 36). Especially, economic interests of the Safavid were contrasted with the interests of Ottoman state that in deep view was continuing the challenges and competitions over attaining the other party treasures and wealth.

Kandehar; Iran and East Asia highway

Kabul highway, which is the most famous and oldest ancient roads i.e. Silk Route starts from north-west of Kandehar (Bayani, 1974; 439). The city and its suburbs, in past, was economically credited in addition to military and strategic significance. Kandehar, from 16th and 17th centuries AD then, achieved prominent status in defensive areas and trading routes between Iran and India. It was located on the commercial and tourist routes of Iran and India. It benefited fertile lands and abundant water resources that could resist under ruling of an intended and powerful commander. Kandehar was surrounded 15 times over long periods of 16th and 17th centuries and changed hands on 12 different times (Bayani, 1974; 441). However, the seizure by sudden attack was always difficult. This is of the rations showing that why stratagem and the city’s golden key were often related in trying to confiscate Kandehar.

The safety of Kabul and Khorasan depended on the possession of Kandehar; as a result, this city inevitably was the basis of competition and contention between Indian Mughals and the Safavid. In fact, it was proved that Kandehar effectively contributed in friendly or hostile relationships of the two states (Riaz Al-Islam, 1994; 38–41).

Overall, Kandehar was the major overland trade between Iran and India in the Safavid age such that the countries conflicted over seizing for over two centuries. Khorasan and India, in particular Gol Kandeh and Daken, commercially communicated; even once Kandehar was reclaimed by Shah Abbas, high customs were taken as there were no other overland way except Indus linking India to Iran from northern areas. In addition to overland routes, some goods were imported through maritime trading to Gombroon (Bandar Abbas) travelling between Iran and India within the eleventh century; overland trading was only seized during the Kandehar war.

In total, economic and political achievements of Shah Abbas I on trading between India and Iran and the Mediterranean Sea (Followed by opening the Persian Gulf route), provided the new opportunities for developing the economy of Iran. However, growing trend of maritime and overland trade with Indian Mughals continued to the late Safavid, particularly Shah Abbas II and Kandahar was always particularly critical. In the beginning of twelfth century, the roads were rendered unsafe by Baloch invasions and riots of Afghans; trading quantity reduced and the economic and commercial prosperity between the two countries fell (Ferrier, 2001; 265).

Economic motivation; the significant factor of Uzbeks attack to Khorasan

The common feature of the Safavid and Uzbeks relationships was military confrontations, massacres and bloodshed. This was inevitable due to several reasons including the Safavid king’s effort in limiting traditional boundaries and establishing a centered authority, on one hand; and religious autonomy, on the other hand. Moreover, the trade between Iran and central Asia in the early Safavid was reduced under the influence of enmity of Uzbeks and Iranians, frequently emerged within centuries, and the conquest of Herat by Shah Ismael, who ended the golden cultural age of this city. However, a more or less desired business continued between Mashhad and Kabol to Bukhara and Balkh; further, Indian and some European merchandise were distributed throughout Turkestan (Ferrier, 2001; 219–220).

The Uzbeks were culturally inferior to Iran of the Safavid age; therefore, any friendly relation could benefit the Uzbeks from Iran’s cultural supremacy. After about 115 years of fighting and three great wars of Marv, Jaam and Robat Pariyan, as well as certain abstraction of Khorasan from Uzbeks, friendship was established between the Safavid and Uzbeks.

Indeed, though threatening the Safavid and overthrows by Uzbeks failed, at least it sometimes managed to wrest Khorasan out of the Safavid control; in addition, it brought an appropriate safety margin for Transoxiania, which was historically inseparable of Iran’s history. In other words, though, the relationships between the Safavid and Uzbeks influenced by the power of Ottoman Turkey, their western neighbor; it can be clearly seen that such effect, in rare cases, was mostly influenced by economic and national interests rather than just religious supports.

Overall, political and economic incentives of Uzbeks attack to Khorasan and Transoxiana can be stated as Transoxiana and Khorasan were historically interested commercial and agricultural centers of nomadic cultures. Civilization of Khorasan and the need of attackers, especially Uzbeks, to the materials made in Khorasan to strengthen their economic foundations, particularly in Kharazm, as well as dominating the Silk Road, passing Balkh and Marv drove Uzbeks into attacking this area.

European and contacting Iran through Russia

Iran entered into a global relationships by the Safavid establishing wide political relationships, in particular with Europeans. European merchants viewed Iran as proper opportunity of trading with Orient in addition to its economic position. Furthermore, northern roads also provided many possibilities for Russia to establish the relationship from Caspian Sea and eastern and western territories of this sea.

Coinciding with the Safavid establishment, the two great powers of Ottoman and Uzbek in west and east following the Sunni, were seriously threatening. On the other side, Ottoman development in Europe was increasingly endangering (European) Christian states; thus, it made Europeans establish a close relationship with the Safavid in order to prevent Ottoman advancing, regarded as the common enemy of Iran and Europe. This relationship was commercially and military significant. Russia, neighboring north borders, focused on establishing political and economic relationships in order to attract Iran’s friendship and to utilize its geographical position.

The relationships between Iran and Russia began in the Safavid era in 1552. In the period of Ivan IV (the terrible), the authority of the Russians was extended to Caspian Sea northern coasts and Volga with the remaining of the old city like Atil, Bolghar, and Saray, which was governed by Golden Horde Khans. This important river, which played a critical role in East business, was supervised by Russians (Jamalzade, 1959; 46–47).

Once Russians took over Haji Tarkhan, large firms were gradually founded with the purpose of business such that during the reign of Shah Tahmasb I, Anthony Jenkinsen, English merchants who was on business in Moscow and known due to its commercial relationships, was delegated to Iran by Ivan the terrible and the Queen of England.

Jenkinsen, known as the representative of Moscow Company targeted on trading with Iran, came to Iran in 1561 through Transoxiana and visited Shah Tahmasb. He reported the negligible trade of Overganj with Iran and introduced Bukhara as merchants’ large annual warehouse, which is depressed; however, it held some part of Iranian business. Iranians transacted Craska, cotton, and other silk textiles as well as Argomack, Turkmen horses of Arabic race, etc. with red raw skin, Russian containers and slaves (it held the largest slave market in central Asia).

Jenkinsen failed to sell the fabrics since Iranian merchants traded textiles with Syria. He returned Moscow due to unsigned commercial treaty as Jenkinsen was unwelcomed by Shah Tahmasb in Qazvin; in addition, corresponding of the Queen of England on establishing commercial relationships remained unanswered (Savory, 1987; 97).

In 1566, a delegation headed by Arthur Edwards was missioned to Iran from Hashtarkhan. Many were sick on the way and died and others found a better situation approaching to Qazvin since Shah Tahmasb desired to wear English textiles; in addition, he also issued a decree about Moscow Company exempting from customs and toll; he even promised merchants the passing permission (Shoster Valser, 1985; 101).

Shah Tahmasb noted Edwards “he sought for excellence in all variety of goods over Venetians and Turkish as they are afraid of such prominence, which was privately expressed. Indeed, the prince’s subjects were seeking a deal on spices and other merchandise not being able to sell to Venetians and Turks”. In this regard, one prominent purpose was to desolate Mediterranean trading road supervised by Turks and Venetians. However, Edwards soon found out that it was impossible to “break the commercial dam between Venetians and the Armenian company” through existing resources (it was never possible) (Ferrier, 2001; 223).

English merchants were willing to start a lucrative business with Iran through Russia; however, Venetians, Armenians, and Turkish were reluctant to give up their markets as all silk trade and some part of spice trade imported by Venetians were controlled by Italians. Further, they also supervised Portuguese whole business of spices, most of which imported to England; as a result, Russian trade with Iran was in collision.

It is necessary to mention that English merchants of Shah Tahmasb age evaluated silk buy and sell process as Iran’s most significant trading item; thus, Turkish, Venetians and Armenians were prioritized this product over English merchants in providing the products, road safety as well as adequate information of local conditions and supplying sufficient money for buy and sell purchase. According to Edwards, the Turkish possessed abundant silver treasures for coinage of ten Shahi; since they were afforded all the year; thus, silk was purchased very cheap from local residents (Ferrier, 2001; 224).

It is evident that the ambassadors, within that period, were obliged to travel to at most two countries and deliver the messages and letters to the Shah of both sides for gift exchanging and negotiations against the Ottomans. Nevertheless, Shah Abbas seriously concerned for the commercial and political relationships of its northern neighbor since the beginning of his reign (1587); he also adopted several measures to develop the relationships with that government. Since Shah Abbas, the relationships between two countries went beyond gifts and message delivering such that both appointed permanent ambassador. Moreover, considering the drive of trading such an important product like silk and this issue that Iran’s silk was less expensive comparing Ottoman’s silk in Mediterranean ports made Shah Abbas finding Iran’s silk markets in Russia. Furthermore, the communication of the two countries resulted in developing Persian language in Russia and Europe under the influence of Armenians’ commercial efforts (Bournotiyan, 2001; document 57 and 69).

Commercial significance of Hashtarkhan

Russia served the intermediate role in relationships with Iran such that it was the interface between Iran and European states. Hashtarkhan was one of the commercially significant cities and acted as an interface with Europe; it was located in 75 miles of lower Volga from Caspian Sea. It was occupied by Russia in 1554; they attempted to build fortifications in the 1580s. The dominance promoted toward south and east, which intensified the city importance. The significance of Hashtarkhan in trading highly increased in the third quarter of sixteenth century. Firstly, it was situated in a road from White Sea to Caspian Sea connecting Europe to Asia; indeed, Portugal and Spain navy was unable to access this area. Further, it was out of Turkish and Venetian surveillance; a potential market for English textile exporting; and was created to trade spices, silk and colors. Secondly, Hashtarkhan as Russia’s southern base imperiled Ottoman interests in Caucasus regions. Six trips to Iran, within 1580–1560, were performed by English-Russian Company in order to change Iranian trade direction from eastern-western to southern-northern. This was particularly attractive for Iran that intended to release from Turkish dominance on transit and exporting roads (Ferrier, 2001; 223).

Ottoman restrictive measures against Iran

Prior to Persian Gulf sea lane, Iran’s silk was traditionally traded by Ottoman overland route; therefore, Ottomans demanded high customs from Iranian merchants. Ottoman restrictive measures against Iran were conducted through blocking commercial highways and forced the Safavid granting the concessions in order to obtain sailing permission through the Persian Gulf’s narrow waterways and Oman Sea, which was dominated by the Europeans.

Furthermore, one purpose of Shah Abbas in silk trading was suppressing the Ottomans from silk exportation. Dominance of Ottoman sultans over the Mediterranean coast brought trading routes between east and west under their control and monopolized east-west trading; in addition, they made every effort to seize regions of Caucasus and Caspian Sea coast in order to dominate over Caspian- Volga trading route (Mahmeid; 1982; 86).

It is worth notifying that as northern areas were the significant raw silk production centers; hence, government economic plans centered around these areas; in addition, Iran and Europe trading route passed this region such that Iran and Ottoman repeatedly conflicted over the area’s dominance. It was such an important product that Shah Abbas monopolized this product by removing local rulers (Falsafi, 1965; 229–232).

However, peaceful relationships between Ottoman and the Safavid led to the reflourishing of Iran’s business with Europe and Mediterranean bays through Ottoman ground routes. Though, in seventeenth century, Asia spice trading routes approached Europe through sea bypassing Africa; Iran’s silk was traded overland and the balance sheet was deeply in favor of Iran such that it raised money circulation in Iran (Furran, 2001; 113).

Attraction of south of Iran sea lane

Discovering the new land offered rapid growth of Europe monetary economy; moreover, money distributing in agricultural communities effectively contributed in defeating innovation barriers. Over the fifteenth century, European sailors initiated hazardous expeditions with the purpose of exploring new ways and land as well as trading; they targeted on developing marine transportation toward China and India, dominance over Middle Eastern merchants. As maritime transportation played a critical role in international trade, especially transcontinental trade around the world, the nations that can easily access international waterways, potentially possess the relative advantage of transit; however, this excellence requires having efficient, secure, and disciplined navy, developed porting equipment and fast and regular ground transportation (roads or railways).

Effective factors of maritime transportation prominence over other transportations are as follows:

  • low cost of goods’ sea transportation
  • Bulk goods: high volumes of goods easily transferred through sea such that heavy weighted goods are only transported by ship.
  • Heavy weighing commodity: ship is the only means of transportation with almost no limitation in term of weight; further, it transfers high quantity of products. Such level of transferring may meet long-term regional requirements.
  • Safe and fast transfer; or in other term, safe shipping (Katouziyan, 1974; 10).

By marine explorations in early 16th and Portuguese dominance over Indian and Hormoz Island, the commodities entered from India and other areas of eastern India and transferred to Mediterranean ports. However, political conflicts at the beginning of the Safavid era with Uzbeks and Ottoman caused minimizing of Iran’s revenues and benefits from marine trading with India. One century later, Shah Abbas’ European- oriented policies attracted more English merchants to Iran. England eastern India Company, centered in Surat, sold Indian rejected wool textiles in Iran exchanging Iranian silk to sell in European markets. Shah Abbas welcomed the English and allowed them to found a firm in Shiraz and Isfahan as well as at Jask port. Following the victory of Azerbaijan and Ottoman defeat, Shah Abbas intended to occupy southern Iran seized by Portuguese. In this regard, he appointed the governor of Fars, Imam Qoli Khan, the son of Allah Verdi Khan, to this mission. He conquered Bandar e- Abbas; however, conquering Hormoz required the navy, which was absent in Iran. England competed as a powerful rival with Portugal for trading with Iran. Imam Qoli, aware of this competition, exploited the opportunity and asked for English marine aid. English who knew the interests of alliance, better than anyone else, allied with Iran. Finally, Iran seized Hormoz and Qeshm by this alliance and English obtained significant concessions in turn for supporting Iran. According to the given concessions, all English exporting and importing goods were exempted from tax payment in 1622; furthermore, they also attained half of Bandar e- Abbas’ revenue (Campfer, 1981; 114).


The Safavid created innovations in the commercial and political relationships. In particular, Shah Abbas I refreshed Iran’s international trade with significant measures taken internally and encouraging foreign traders being independent of traditional and exclusive markets and purchasers. The trade between India and Iran and Mediterranean Sea became important followed by opening Persian Gulf. This enticed local and domestic shipping in addition to increased quantity and value of shipping cargo of England and Netherland companies. In spite of new marine ways later welcomed Europe; it never substituted old land routes connecting east and west through Anatolia and Mesopotamia through northern Iran; rather, it served as supplementary ways of trade. Since exporting merchants, Armenians, tended to import their goods through Ottoman and by the aid of immigrant Armenians in the eastern shores of Mediterranean Sea. On the other hand, with the rise of capitalism and emerging of giant commercial companies top of which were England, France, Netherland, and Portugal, Armenian traders encountered a tough rival. Economic and political achievements of the Safavid, and in particular since Shah Abbas led to establishing new fundamentals in foreign policy and national economy.