The early medieval period was also marked by many social and economic changes. Socially, an important phenomenon of this period was the proliferation or increase in the number of castes
How did it happen? One of the reason for it was the inclusion of newer groups into brahmanical society. It is suggested that as the number of land grants increased, new areas were brought under cultivation. It made local tribal people leave hunting as their main profession and take up agriculture. They were then transformed into peasants, and assimilated in society as sudras.
The land grants in fact resulted in movement and migration of Brahmanas to different internal areas where they were able to introduce and enforce their brahmanical social values. The land grants also led to the increase in the number of Kayastha class. The Kayasthas were basically scribes and they specialized in drafting and writing land grant documents. Naturally, with increase in the number of land grants their importance also increased.
But the most important feature of this period was the rise of a new class of people called the Rajputs, such as Chahmanas, Paramaras, Pratiharas, Chandellas, etc. Some historians believe that they were the descendants of various groups of foreign invaders such as Sakas, Kushanas, Hunas, etc, who had been coming to India from northwest during different times of history.
These people gradually settled down in the region of Rajasthan and, after intermingling with the Indian society, emerged as a warrior class.There are others who treat them as a part of the Kshatriya varna of the brahmanical system. But today many scholars see a connection between the rise of Rajput class and the extension of agriculture activities in Rajasthan. It is pointed out that with the spread of land grants there was an increase in the number of agriculture settlements. As a result, many local chiefs came to acquire enough financial and political power to set up an independent authority.
In order to acquire legitimacy and authencity to their newly acquired position in the eyes of their subjects, they invited brahmanas from Gangetic and other regions to perform for them royal rituals and ceremonies, and in return gave them land and other things as fee, i.e dakshina. They also made brahmanas write about their illustrious ancestory linking them with lord Rama (of the solar race) and lord Krishna (of the lunar race) to claim a dignified position of a warrior class.
Economically, the first phase, i.e, AD 750 - AD 1000, is believed to be one of decline. It is evident from the absence of coins for exchange and the decayed condition of towns in northern India. But in the second phase after AD 1000, we notice a revival of trade activities. Not only do we come across new gold coins, there are also numerous references to trade goods and towns.
What could be the reason for it? There seem to be two main reasons for it. One, there was increase in agricultural activities on account of land grants in fresh areas. It led to surplus production of goods for exchange. And second, the Arab traders had emerged on the coastal areas of India as important players in international sea trade. The Arabs had acquired a foothold in Sind in AD 712 and later, gradually, they set up their settlements all along the sea from Arabia to China.
These settlements served as important channels for the sale and purchase of Indian goods, and thus helped in the growth of Indian external trade. In south India, the Chola kings maintained close commercial contact with southeast Asia (Malaya, Indonesia, etc) and China.