The trade in opium increased sharply at the end of the seventeenth century, when it became common in to smoke the drug rather than merely using it as an ingredient in medicines. Opium had been traded throughout China, Central Asia, and the Middle East for at least a thousand years at this point, but the first group to make large profits on opium grown in India and then exported in bulk to China were Portuguese merchants at the beginning of the eighteenth century. They were quickly followed by merchants from Britain and the Netherlands.
The merchants who made large profits from opium did not necessarily trade in the drug as their primary business. Many were tea or silk merchants who had formerly sent empty ships to China and paid very high prices for Chinese goods, while the Chinese were uninterested in anything they had to sell. Opium redressed this balance. By the middle of the nineteenth century, opium had become such an important source of revenue for the British government that the First and Second Opium Wars were fought by government troops between 1839 and 1860.
Although it was mainly European merchants and governments that gained from and supported the opium trade, one Indian business community also made very large profits: the Parsis or Parsees of Bombay. While other Indian merchants attempted to operate out of Calcutta, where they were in direct competition with the British East India Company, the Parsis exported from Bombay, where there was minimal British presence, and used the British factory in Canton to process their imports to China. Some of them became very wealthy and used their newfound wealth to finance lavish mansions in the European style.