In the 18th century, many old towns went into decline. They were replaced by new towns which soon emerged and developed. As there was a gradual erosion in the power of the Mughals, it caused an eclipse of various cities associated with their rule. Delhi and Agra, which were the capitals during the Mughal rule, lost their political authority and grandeur.

(i) Emergence of New Regional Powers: During the 18th century, many new regional capitals emerged. They soon gained importance. Such powers were Lucknow, Hyderabad, Seringapatam, Poona, Nagpur, Baroda and Thanjavur. Those traders, artisans and administrators who earlier lived in the Mughal centres of power now left these places and migrated to new capitals in search of work and patronage.

(ii) Creation of new urban settlements:

Many official and local nobles lived in the Mughal cities. They created their new urban settlements such as the ‘Qasbah’ and ‘Ganj’. However there was an uneven growth of cities. Some places flourished because of their economic activities. But some places faced economic decline due to war, plunder and political instability.

(iii) Growth of trading centres : The emergence of ruban centres brought many changes in the network of trade. For example, the Portuguese settled in Panaji in 1510 and the Dutch in Masulipatnam in 1605. The British came in Madras in 1639. The French took hold of Pondicherry in 1673. It led to an expansion of economic and commercial activity. So many towns grew around these trading centres. By the end of the eighteenth century, the land-based empires in Asia were replaced by the powerful sea-based European empires. It ushered in International trade, mercantilism and capitalism in the society

(iv) Emergence of colonial port cities : In the mid-eighteenth century, the commercial centres like Dhaka and Masulipatnam lost their importance. With the British becoming more powerful after the Battle of Plassey in 1757, the trade shifted to cities like Madras, Calcutta and Bombay which had emerged as new economic capitals due to the trade activities of East India Company. So these cities also became centres of colonial, political and administrative power. By the end of 1800, Madras, Calcutta and Bombay had become the biggest cities in India.