British East India Company


In 1600 QAUEEN ELIZABETH I of England (1533-1603) gave permission to merchants to set up the East India Company.( The Company had control of trade every where east of the Cape of Good Hope. The creation of the East India Company would Eventually lead to the rule of the British in India. Elizabeth lived at about the same time as the Emperor Akbar. Good Queen Bess, as she was known, ruled for forty two years. But she never married, and had no heirs. She was a clever woman, highly intelligent, and a skilled politician who ruled with a strong hand.



Before the arrival of the British in India, Arab traders used to visit India for the purpose of trade. The British first arrived in India in the early seventeen century in 1600 to trade with the East, not to conquer India. They pursued trade with India and earned huge profit. They began to take Indian goods to Europe for trade purpose and developed good relationship with European people. The European traders also wished to do the trade with India at their own. First of all the Portuguese traders came to India and earned huge profit, followed by British and French trades.

East India Company established trading settlements known as factories. These first settlements were set up at Surat (1612), Madras [Chennai] (1640), Bombay [Mumbai] (1661), and Calcutta [Kolkata] (1690). At first the British East India Company was only interested in trade and not in any kind of political control.

The decline of the Mughal Empire, clashes with the Marathas, and the lack of any central government led to conflict between and the ambitions of local princes. The British had to protect themselves against attack from the French. In the end, drawn into the local politics to maintain and enhance their business, the East India Company had the unusual distinction of ruling an entire country.

The East India Company recruited local men, known as sepoys, into an army to defend their trading posts and the profits they were making. During the eighteenth century the East India Company increasingly interfered in the government of various parts of India. It achieved this by a mixture of force and supporting local princes.

Gradually, as the task of government became too great for the company, the British government took on more responsibility. By 1850, through a combination of bloody wars and often devious political deals. Britain had gained almost complete control of the Indian subcontinent.




The Portuguese had begun trading in India in the 16th century. During the 17th century the Dutch built up their navy to be the strongest in the world. Now they were able to challenge the Portuguese and set up trading posts in the subcontinent. The British East India Company had started in 1605. British traders sent ships to the subcontinent , setting up their first settlement in 1611 at Masulipatam on the Bay of Bengal. By the mid 17th century the British had about twenty seven settlements.

Before the arrival of the British in India, Arab traders used to visit India for the purpose of trade. They pursued trade with India and earned huge profit. They began to take Indian goods to Europe for trade purpose and developed good relationship with European people. The European traders also wished to do the trade with India at the own. First of all the Portuguese traders came to India and earned huge profit, followed by British and French trades. In 1600, the British traders, after getting royal permission from the Queen of England , established British East India Company for the purpose of trade.


  • India was a source of several products that were much sought after by wealthy people in Europe.
  • Trade in spices from Southern India, cotton goods and yarn from Gujrat, yarn and sugar from Madras [ Chennai], and silks and potassium from Bengal made good profits for the East India Company.
  • Cotton yarn and cloth particularly in demand, as cotton clothing was much more comfortable than the woollen clothes that most English people wore.
  • The rapid growth and prosperity of the company was impressive.
  • By 1620 the company operated nearly forty ships out of docks on the Thames at skill and their knowledge of Indian conditions and culture helped the British to gain political control.
  • Many employees of the company did not enjoy working in India.
  • Englishmen did not like the climate or the illness that so many of them seemed to go down with.
  • Dysentery was a frequent misery for many of them.


After the death of Aurangzeb, the last of the great Mughal Empire. Aurangzeb died in 1707. He was succeeded by his son, bahadur Shah (1643-1712), already sixty four year old, who ruled for only five years. As the 18th century progressed, the subcontinent became a disorganized and unsettled place and the Mughal Empire slowly fell apart. The Mughal rulers who followed Aurangzeb slowly but surely lost power while the British slowly but surely gained the power. There are following reasons of decline :

  • The strength of enemies such as Marathas and the Persians. Aurangzeb had spent the last twenty five years of his long life fighting the Marathas ( a peasant warrior group from the Deccan) and Sunni Muslim groups in southern India. This continuous fighting had weakened the foundation of the empire.
  • The establishment of independent provinces.
  • Power struggle within the Mughal Royal family.


After Aurangzeb’s death, jealousy grew between his seventeen sons, grandson and great grandson as they tried to grab wealth and power. Within ten years of Aurangzeb’s death there were seven battles for succession in which large number of capable soldier, princes and noble were killed. The loss of these men further weakened the Royal Family and the empire.

The Emperor who succeeded after the death of Aurangzeb did not have the abilities needed to control the empire. some lived a life of pleasure, leaving the work of ruling to their advisers, and as a result began to lose control. the administration crumbled. Taxes were not not collected and so roads not repaired. There were general discontent and constant rumors of war.

Once Historian has said : a family, in which father sons and brothers regarded one another as enemies….. was inevitably doomed to lose its political supremacy.


  • The Empire began to break up into independent provinces.
  • For example : in 1720 Bengal became independent.
  • In 1724 Deccan became independent.
  • In the South the Muslim state of Mysore, ruled by Haidar Ali, grew powerful.
  • After 1748, civil war broke out and more provinces, including Sindh, Gujrat and Oudh, broke away from Mughal control.
  • The Europeans took advantage of the weakness of the Empire and set up trade in weapons with the new rulers of the provinces.


Another sign of Mughal weakness appeared when in 1738 the Marathas were able to swarm outside Agra and reach the gates of Delhi. Although unable to capture these cities they were able to take over a large area of modern day eastern Madhya Pradesh state and parts of southeastern Rajasthan state and west central India. Were disaster were followed.


In 1739, as had happened so often before, invaders entered the subcontinent via Hindu Kush Mountains. This time it was Persian army led by Nadir Shah (1688-1747), who had captured Ghazni and Kabul. Now, taking advantage of the weakness if the Mughals, he marched into subcontinent with his army of 270,000 men.

Nadir Shah crossed the river Indus at Attock and attacked Lahore. Few people dared stand up to the Persian, who easily captured the city. Nadir Shah then marched on to Delhi. There the Mughal Emperor, Muhammad shah, had an army of 200,00 men and 5,000 cannons, but even so the Persians took him prisoner and captured Delhi. Then, when some of his own soldiers were killed, Nadir Shah ordered massacre.

In Delhi the Persians plundered Mughal storehouses and helped themselves to treasures, including a large diamond, the Koh-I-Noor. They also took the splendid symbol of Mughal rule-shah Jehan’s Peacock throne. When the Persians carried the throne back in triumph across the Hindu Kush it was clear for all to see that Mughal glory was gone forever.

In 1740, on his way home, Nadir Shah plundered sindh. In January he reached Dera Ismail Khan in modern day North West Frontier Province, Pakistan. In February he arrived at Larkana in Sukhur division, Sindh Province, and took gold, jewels and pearls worth more than one crore rupees. The value of his Indian plunder was about 700 million rupees- so great that Nadir Shah announced that his people need pay no tax for three years.

East India Company and Mughal Period

The Mughal Emperor Jahangir facilitated the company and exempted it from the various trade taxes; which made British happy and they built many trade centres in India. When Shahjahan became emperor, the company got more trade facilities and concessions. After the death of Aurangzeb, the later Mughal kings were weak and lost control as a central authority due to internal intrigues and weak political condition of India. The last Mughal king proved very weak and could not stand against the British. After the War of Independence in 1857, the British company took over the reign of sub-continent.



Before the 17th Pataliputra, Delhi, Agra, Lahore and Taxila had been important cities. What did they have in common? They were all inland and on land trade routes. Now in the 17th and 18th centuries, as Europeans set up their trading settlements on the coastal settlements, which developed as British power grew in the mid and late 17th century, were Madras, Bombay, and Calcutta. The British called them ‘Presidencies’.


Madras, situated on the Coromandel Coast ,was the Company’s most important centre in the subcontinent until the mid 18th century. It grew despite the fact that it was a difficult place for ships to arrive at – the sea was usually rough and beach covered with pebbles. Madras began in 1640 as Fort St. George, which contained offices and military areas as well as a church building.


Early in the 17th century the Portuguese and British were rivals for the trade in the subcontinent. But later the relationship between the two grew friendlier when, in 1660, the British king , Charles 2 (r. 1660-1685), married Catherine is famous for introducing the habit of drinking tea to England. As part of a wedding gift the Portuguese gave Bombay ( today called Mumbai) to Charles. This new friendship with Portugal made trading much easier for the British.

Charles 2 offered Bombay to the Company for a very low rent. Unlike Madras, Bombay had a good harbour but it was an unhealthy place for other diseases there. Even so Bombay grew to become the Company’s main port on the west coast. It had a fort(called the ‘Castle’) with an army and from the early 18trh century the Company set up a navy there, called the ‘Bombay Marine’.


As the 17th century progressed, Bengal became increasingly important to Company trade. Calcutta ( today called Kolkata) on the Hooghli River became a Company settlement in 1690 when an employee called Job Charnock purchased three villages from an Indian landlord and set up a trading post. Calcutta was a good site for traders- the river was wide and deep which made it easy for ships and anchor. By 1700 a thousand British people lived there. But there were disadvantages: The sand of the river caused difficulties for ships, Mosquitoes bred in marshes and swamps, making the sea unhealthy. A huge salt-water lake flooded during the monsoon and when the water receded it left behind dead fish rotting in the streets. One in three Europeans at Calcutta died in epidemics of cholera and malaria. In 1697, work was begun on a large fort in the city, called Fort William after King William 3. By the 1750s Calcutta had a population of half a million.


Early in the 17th century there were no more than 1,500 British people in the whole of the subcontinent. Most were men, as India was at that time considered too dangerous and unhealthy for British women and children, and almost all were connected with the British East India Company. British political rule had not yet begun and the British were in India for one reason -to make money . As a result they needed to show respect for local rulers and ways of life. They took up Indian customs, ate Indian food and wore Indian clothes. Many studied Indian languages, history, and culture. It was common for Company men to marry Indian women- some even kept a small zenana in the Mughal style. However, as the British gained political power in the last quarter of the 18th century, attitudes began to change, as you will discover later.


By the 1740s the British were well established on the west and east coasts of India. But ships travelling from Britain to India had to take a long route around the Cape of Good Hope on the southern tip of Africa. Even with this difficulty, the British East India Company trade was very successful in India. In 1740, foe example, it earned England more than 10% of the annual income. Why was this?

  • British East India Company had a ‘monopoly’ of the sale of India goods in Britain-because it controlled the market it could sell its goods easily and for a high price.
  • British East India Company merchants were able to ‘cut out the middleman’. Because they bought goods directly from Indian manufacturers and owned their own ships they did not have to pay their merchants or ship-owners
  • British East India Company ships were large, which gave ‘economy of scale’-it was cheaper to send one large loan of goods on the one ship than smaller loans on several ships. The goods could still be sold for the same price, making the profit from each shipload larger.
  • British East India Company developed new markets for Indian goods in Africa and north and south America


In the early years, British East India Company settlements were defended by a small number of troops. Later the Company began to train local soldiers called sepoys (from the Indian word sipahis, meaning ‘solders’). Soon there were small armies at Bombay, Calcutta and Madras. They grew rapidly; at Madras in 1717, for example, there were 360 soldiers and by 1742 they had increased to 1,200.


The new armies made the British East India Company much more powerful as local Rajahs and Nawab rulers asked to borrow its soldiers to fight battles. In return the British East India Company at first asked for trading agreements, but later asked for land. In this way the British began to take on a political role. Once the British East India Company had begun to rule areas directly -or indirectly through controlling local leaders-trade became less important because the compony could make money by collecting taxes.



In 1664 France had founded its own French East India Company, the Compagnie des Indes. The Compagnie expanded and from 1730 trading increased in Bengal under the leadership of Joseph-Francois Duplex (1697-1763). In 1742 Duplex was appointed Governor-general of all French settlements in India. The British began to worry about the French threat to their trade. At this time the relationship between Britain and France in Europe was poor. Over the next seventy-five years, until 1815, there were to be several Europeans wars in which France and Britain were on opposite sides. As a historian has commented, ‘ it was as part of the larger struggle for power between the two nations that the British and the French fought their wars in India.


Duplex dreamt of getting control of all trade in the subcontinent. In 1746 the French sent a fleet, which captured the British settlement at Madras but this was later returned and Duplex had to think of another way to snatch control of British trade. Madras and the French settlement at Pondicherry were both on the Carnatic coast. Duplex supported a local ruler, Chanda Sahib, to become Nawab of the Carnatic. Duplex planned to control Chanda Sahib once he had power and in this way become the real ruler of the Carnatic. Then he hoped to drive out the British. Understanding Duplex’s plan, the Company supported a rival candidate to be Nawab of the Carnatic , 1751 a private war broke out between the Compagnie and the Company, and a young army officer rose to power on the British side. He was called Robert Clive.


In 1751 Chanda Sahib ( the French favourite) besieged Muhammad Ali Khan (the British favourite) in fortress at Trichinopoly near Madras, Clive made a brilliant move. Instead of rushing to help Muhammad Ali Khan he marched to Arcot- Chanda Sahib’s capital in the Carnaic. With 500 soldiers Clive took the city by surprise and capitured it. Now Chanda Sahib’s son rushed to Arcot to try to get Arcot back. For fifty-three days Clive and his men were under siege inside the city. Supplies ran low and food was rationed, but Clive refused to givein a Chanda Sahib was unable to re-capture Arcot. One modern historian has commented that ‘The darnig southern India, demoralised the French, bolstering flagging British spirits, starting legends about England’s ‘heaven general’ ( Clive) throughout the subcontinent.’ Clive was instancy famaous, but this victory was just the first of his successes.

In June 1752 Clive marched to Trichinopoly. The French surrendered and Chanda Sahib was executed. Muhammad Ali Khan became Nawab of the Carnatic- the British had beaten the French to win control. Now the French government was angry with Dupleix and recalled him to France where he died in poverty and disgrace. With Dupleix gone the British were able to use Bengal as a base to gain power in other areas of India.


In 1756 Bengal was a rich province with a large population ruled by a 19-year-old Nawab, Siraj-ud-daulah. The British and French began to strengthen their settlements against each other. At Fort William in Calcutta the British put up guns on the walls and dug a large ditch to keep the French out. Siraj-ud-daulah wanted the Europeans out of Bengal and ordered them to stop their fortification work. The French agreed but the British did  not , so Siraj-ud- daulah marched to Fort William with an army of 50,000 men.

The British versus the French in India.

Duplex dreamt of getting control of all trade in the subcontinent. In 1746 the French sent a fleet, which captured the British settlement at Madras but this was later returned and Duplex had to think of another way to snatch control of British trade. Madras and the French settlement at Pondicherry were both on the Carnatic coast. Duplex supported a local ruler, Chanda Sahib, to become Nawab of the Carnatic. Duplex planned to control Chanda Sahib once he had power and in this way become the real ruler of the Carnatic. Then he hoped to drive out the British. Understanding Duplex’s plan, the Company supported a rival candidate to be Nawab of the Carnatic , 1751 a private war broke out between the Compagnie and the Company, and a young army officer rose to power on the British side. He was called Robert Clive…



When the British at the Fort William heard that Siraj-ud-daulah was coming to attack them with a large army, they panicked. They could not defeat Siraj as they had only 250 soldiers, and seventy of these were ill. Quickly another 250 men were enlisted as soldiers- English, Portuguese, and Armenians- but they were untrained. In addition, the British did not have enough guns or ammunition and their gunpowder was damp and useless. The Portuguese and Armenia soldiers brought their wives and children- nearly 2,000 people-into the Fort for protection, making conditions very difficult. On June 18, Siraj-ud-daulah’s men began firing at the Fort. Inside there was chaos. Some of the soldiers were drunk. The women and children were ordered to escaped by river but more sank. Then the British Governor, the senior officers, and the richest merchants deserted the Fort, heading downstream to safety.


With their leaders gone the few people left in the Fort were angry and helpless-but there was nothing they could do except fight on. A Company official, John Z. Holwell (1711-1798) was now the senior officer in command. His men tried to hold off Siraj-ud-daulah’s forces but were massively outnumbered. In the end the British were forced to surrender and the victorious Siraj entered Fort William in a palanquin. The soldiers were taken prisoners and Siraj said that he would treat them well. But what happened next was to become one of the most famous incidents in the history of the British Empire…


The Company was worried. The loss of Fort William was a serous blow, which greatly weakened British power in India. The fact that an Indian army had captured the Fort and snatched Calcutta so easily made the British look like cowards and fools. Something had to be done, and done quickly. Now, because of the feelings of horror at the Black Hole incident, the British were willing to support the Company in its plans to win back power. Robert Clive was asked to lead an army against Siraj-ud-dualah. ‘This expedition if attended with success, may enable me to do great things, ‘ Clive wrote to his father,’ It is by far the grandest of my undertakings, I go with great forces and great authority’. In fact, Clive’s revenger on Siraj-ud-dualah was eventually to lead to British control over the subcontinent. But before Clive could tackle Siraj he had two other matters to deal with- the retaking of Calcutta and the capture of the French trading post of Chandernagore.


In October 1756 a British fleet left Madras to sail up the Hooghli River. It was carrying Clive and his troops-100 European soldiers and 1,500 Indian sepay soldiers – as well as nine cannons. No longer was the battle against Siraj just a Company affair-five of the ships belonged to the British government. The fleet was led by Admiral Watson. For the first days it looked as if things would go wrong for the British. The ships were blown as far south as Sri Lanka; one began to leak; food supplies grew low. Some sailors got scurvy. When the rice ran out there was nothing left but beef and pork, which the Hindu sepoys could not eat. However, in the end the British reached Calcutta and were able to retake it from Siraj-ud-dualah.


Now that the British again controlled Calcutta, Clive wanted to capture the French trading post at Chandernagore- Source 1.25 shows the letter he wrote to the Governor . No reply came and the next day Clive set siege to Chandernagore. After numerous casualties on both sides the French surrendered. This victory gave the British more power in Bengal.


With Calcutta and Chandernagore in British hands, Robert Clive turned his attention to the defeat of Siraj-ud-daulah. In June 1757 Robert Clive’s army attacked Siraj at Plassey in West Bengal state. Plassey got its name from the palas or ‘Flame of the Forest’ trees that grow there. On the high river bank Siraj had a large hunting lodge, which the British called Plassey House.

On June 22 Robert Clive occupied Plassey House for his headquarters while his man camped nearby in a mango orchard. Early the next morning from the roof of Plassey House, Robert Clive watched Siraj-ud-daulah approach with his army of 50,000 cavalry and infantry and 40 large cannons pulled and it seemed impossible that the British could win.

Siraj began the battle at six o’clock with cannon fire. At noon thunder roared and heavy rain fell for half an hour. The British covered their ammunition to keep it dry but Siraj-ud-daulah was not so quick. Much of his ammunition got wet-and was therefore useless.

Things did not go well for Siraj from then onwards. The British fired at his bullocks and war elephants , causing them to stampede. Many of Siraj’s soldiers were killed and more ran away. By five o’clock in the afternoon the British had won.


How were the British with a much smaller army able to defeat Nawab Siraj-ud-daulah? Here are the main reasons:

  • Indian armies were frightened of the flintlock guns and cannons of the British. As the Robert Clive once said, Indian soldiers had ” terror of our arms (firearms) and felt that they had beaten before the battle began.
  • Robert Clive was helped by Mir Jaffar, Siraj’s cousin and Commander-in-Chief of his army.
  • Robert Clive had made a secret deal with Mir Jaffar, promising him that he could be Nawab of Bengal if Siraj was defeated.
  • For this reason, Mir Jaffar encouraged siraj to give in to the British.


Defeated, siraj-ud-daulah mounted a fast camel and rode back to his capital, Murshidabad in modern day West Bengal state. There he offered nobles treasure to support him in another battle-but no one agreed. At midnight on June 24 Mir Jaffar entered the city. Siraj bundled his wife and other favourties into coaches and palanquins with as much treasure as they could carry, Then, with elephants loaded with more valuables, Siraj fled the city.

On the 29th Mir Jaffar, with Robert Clive there to watch, was made Nawab of Bengal. Meanwhile Siraj and his companions put on the disguise of ordinary travelers and sailed for seventy miles upriver. When they became hungry siraj went ashore and asked a poor Muslim man called Dana Shah for food. He began to cook but noticed that his guest was wearing expensive shoes underneath poor clothes. Guessing that was Siraj-ud-daulah, Dana Shah sent a message to Mir Jaffar, who captured Siraj.


Siraj-ud-daulah was paraded through the streets of his old capital like a criminal. Even though he had not been popular he was in such a poor state that people felt sorry for him. Mir Jaffar, worried that Robert Clive might wish to save Siraj’s life, decided to kill his enemy quickly.

In return for Robert Clive help in making him the Nawab of Bengal, Mir Jaffar gave Clive a huge sum of money and land, which brought him a yearly income for the rest of his life. Mir Jaffar ruled, but as a “puppet” completely under British control.

As a result of the Battle of Plassey the British became the strongest power in Bengal-and later the subcontinent.

As one modern historian has said, ” using Bengal as a base, the British slowly conquered the whole of India. Through a skirmish in the place of of the palas trees (The Battle of Plassey)



In 1759 the Dutch, unhappy at the growing power of the British, sent a fleet against them. Robert Clive captured the fleet and destroyed the Dutch army in a land battle. From now on, although they continued to trade in India, the Dutch did not give the British any more trouble.


When in 1761 the British captured French “Capital of Pondicherry” the French government realised that the British had grown very powerful. It stopped supported the Compagnie and as as result French Merchants moved to the West Indies in the Atlantic Ocean, where trade was more profitable. With the French gone, the British were the dominant European nation in India. With their strong military forces. They had the power to defeat anyone who challenged them, as they were soon to prove in the Battle of Baksar.


In 1758 Robert Clive became the first Governor of Bengal-a post he was to hold for two years. In 1759 Shah Alam II (1728-1806) became Mughal Emperor. Shah Alam was at this time only in thirties and may have hoped to regain the power and lands of his ancestors. However, he had been driven out of Delhi by a powerful minister and wanted to re-capture the city-but he needed money. He demanded taxes from Bihar and Bengal but this did not please the company.

In 1760 Mir Jaffar was replaced as Nawab by Mir Qasim, who refused to be controlled by the British. Mir Qasim gathered some Mughal allies, including Shah Alam, and marched to Bihar state to fight the British. The Indian side had perhaps 30,000 men but the company had only 7500, mainly sepoys. Twenty four sepoys rebelled against the British and were blasted to bits by cannons-an old Mughal form of Punishment. The other sepoys gave no more trouble.

The long fierce battle that followed was the Battle of Baksar. It was to be the last stand of Mughals against the British. The British lost hundreds of men but killed 2,000 enemy soldiers and defeated Mir Qasim. Shah Alam knew he was defeated. He quickly sent his congratulations to the British winners and offered the company the diwani, or the right, to collect taxes in Bengal, Bihar, and Orissa.

The diwani also gave the company the right to take over the administration of the provinces of Bengal. In return the company gave Shah Alam the Doab area, and agreed to pay him 26 lakhs of rupees each year. The battle of Baksar marked the end of Mughal power in India and confirmed the British as the rulers of Bengal and Bihar-the rule of the British Empire in India had begun.

Dissolution of East India Company and Establishment of British Rule:

In 1858, the rule of East India Company came to an end. British rule was established and powers were transferred to the British Crown. The British government ruled India for 90 years. British Viceroy was appointed in India, who used to exercise all powers.

An act of 1858 was passed under which Lord Canning was appointed first Viceroy of India, out the proclamation of Queen Victoria which he had the following points.

  1. General amnesty was announced for all except those fought against British.
  2. While framing laws, the religious, cultural and social traditions of native people will be observed. There will be no discrimination on the basis of colour, race, religion and nationality.
  3. The Civil Service will be offered on the basis of ability, education and performance.
  4. The government will not interfere in inheritance of anyone. If the due tax is paid then the government will be obliged to protect the property.
  5. The government will not interfere in religious affairs of people.
  6. No princely sate will be brought under British occupation in future. All pacts conducted with the rulers of native states will be honored and fulfilled honesty and same shall be expected from the rules of such states.(
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