Feudalism existed in Ancient india. The events of Ancient India reflects the character of Feudalism. Ancient feudalism was the emergence of a new politico economic structure, which dominated north, and later Southern part of the peninsula. The use of this term has, however, been contested, since the type of feudalism in Ancient India during these centuries was not identical with the feudal system in other parts of the world. For instance Ancient Indian feudalism did not emphasize the economic contract to the same degree as in certain type of European feudalism.
The basic requisite of a feudal system were present in Ancient India. The kings granted the revenue from varying proportions of land to his officers or selected holders, who were the equivalent of vassals elsewhere. The tendency from the seventh century onwards of granting land in lieu of cash salaries intensified the feudal process.
The advent of feudalism took place in India during 600 A.D. The system became wide spread during the period 600 to 900 A.D. and it took its final shape during the years 900 to 1200 A.D. There were three zones where the feudal system and the elements of feudalism are to be found quite distinctly. Those zones of operations were the north and western India under the rule of the Gurjara Pratihara, Bihar and Bengal under the Pala rulers and the Deccan under the Rashtrakutas.
The advent of ancient Indian feudalism largely complicated the existing land revenue and agricultural system. The feudal lords put pressure on the peasants and they took a part of the revenue from the land previously assigned to the king. The whole of a kingdom was not granted to feudal holders. The king retained a sizeable area as crown land which he directly administered. The aristocracy consisted of the feudatories including the Brahamanas. Grants to the Brahamanas were obviously based on the desire to acquire merit. The Brahmans performed sacrifices for the king and the king was careful to patronize the Brahmans. This royal donation of land or village to the Brahmins came to be called agrahara. Land grants were made to Saiva and Vishnu temples, besides the Buddhist monasteries. This has been clearly indicated in the copper plates of the Gupta period. This made those temples and monasteries as land owners. This type of ownership of landed properties is to be found in the establishment of Nalanda Mahavihar.
Theoretically only the revenue from the land was granted to the feudatory and not the land itself. The grant was only for the life of the tenant and was subject to reassignment on his death. In practice however, the land held by a feudatory tended to become hereditary.
Villages were based on self-sufficient economy where producing approximated to local requirements with little attempt at producing a surplus. Limited production and lack of trade led to decrease in the use of coins. Besides the surplus wealth of the feudatories and the king was not invested in craft production or trade, but was used for conspicuous consumption.
Loss of revenue placed the king politically in a vulnerable position vis-a-vis his feudatories. It also led to economic depression of the peasantry. With an increase in the number of intermediaries the peasant was forced to pay taxes additional to the basic land tax. Besides the temple authorities levied additional dues. Land grants to the Brahmans were tax free. The aristocracy consisted of the feudatories, including the Brahmans. The grants to the Brahmans were obviously based on the desire to acquire religious merit and were a category apart.