Kings and traders

The prosperity of Vijayanagara rested heavily on trade, and the most critical item in that trade was the horse. Warfare in the Deccan depended on effective cavalry, so rival kingdoms competed fiercely to import horses from Arabia and Central Asia. This trade was initially controlled by Arab merchants, but local communities of merchants known as kudirai chettis — literally "horse merchants" — also participated.

In 1498, a new set of actors arrived on the west coast: the Portuguese. They attempted to establish both trading and military stations. Their superior military technology, especially the use of muskets, allowed them to become important players in the tangled politics of the period.

Vijayanagara was also famous for its markets dealing in spices, textiles, and precious stones. Trade was regarded as a status symbol for such cities, which boasted a wealthy population that demanded high-value exotic goods — especially precious stones and jewellery. The revenue derived from trade contributed significantly to the prosperity of the state.

Krishnadeva Raya (ruled 1509–29), the most famous ruler of Vijayanagara, composed a work on statecraft in Telugu known as the Amuktamalyada. In it, he gave clear instructions about trade:

• A king should improve the harbours of his country and encourage commerce so that horses, elephants, precious gems, sandalwood, pearls, and other articles are freely imported. …