Merchants moved production to the countryside because in the towns:

1. Merchants could not expand production within the towns. 2. Urban crafts and trade guilds were powerful there, controlling training, prices and entry into the trade. 3. So the merchants took work to the peasants and artisans of the countryside. _Source: syllabus Social Science, 'India and the Contemporary World II', Ch 4 'The Age of Industrialisation'_