Answer:
It damaged the Mughal economy by reducing demand for local products
Explanation:
The Mughal Empire trade with European powers affected its economy during the 17th century because its reduced demand for local products.
The principle asserts that when a country import more than its export, its over-reliance on the imported goods will damage the reputation of its local product.
Hence, this happens to Mughal Empire because its trade with European powers affected its economy during the 17th century because its reduced demand for local products.
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