City is essentially a place of exchange for trade and commerce in Ancient India. Commerce involved the buying and selling, or products. Greater demand of products necessitated the concentration of artisans in the towns of Ancient India. Specialization led to proficiency and skill in the crafts. It also encouraged artisans working on a particular craft to live in the same part of the town, which facilitated the obtaining of raw materials or selling the finished product to merchants.
The Ancient Indian merchants went from village to village to collect for example, cotton thread from the spinners or cotton cloth from the weavers and to sell them in village where they were in demand. The Ancient merchants earned a profit through supplying the goods acquired. What was true of thread or cloth also applied to grain and or cloth also applied to grain and or cloth also applied to grain and other products. Soon there was large trade or exchange of goods in the country.
Ancient Indian Trade was made easier by the invention of a new method of exchange money. Before coins were used, goods were bartered or exchanged. But coins were advantageous because those were easy to be carried from one place to another. As the use of coins increased, there were more and more traders. However coins of this period were crude pieces of silver and copper with a design punched on them. Trade was not limited to small area. Goods purchased in the Ganga Valley were sent across the Punjab to Takshasila (Taxila) or else across the Vindhyas mountains to the port of Bhrigukachcha (Broach). From there ships took them to western Asia or South India.