History – Chapter -2

From Trade To Territory- The Company Establishes Power

Learning Objective: - Students will be able to apply the concept of

“From trade to Territory” to understand the process of British Colonial
expansion in India and its impact on Indian society and economy.

I. Answer The Following:

1. What attracted European trading companies to India?
Ans:- European trading companies used to look for new lands while venturing
across the oceans that could benefit them in terms of trade. These trading
companies aimed at buying goods at very cheap rates in different lands and then
take those goods along with them to Europe and sell them in their markets at huge
rates.
2. What were the areas of conflict between the Bengal nawabs and the East
India Company?
Ans;- The areas of conflict between Nawabs and the East India Company are
mentioned below.
i. The Bengal Nawabs asserted their power and autonomy and refused to grant
the company concessions.
ii. They demanded large tributes for the company’s right to trade.
iii. They denied the company any right to mint coins and stopped the company
from extending its fortifications.
iv. Accusing the company of deceit, they claimed that the company was
depriving the Bengal government of huge amounts of revenue and undermining
the authority of the nawab. It was refusing to pay taxes, writing disrespectful
letters, and trying to humiliate the nawab and his officials.
v. The company on its part declared that the unjust demands of the local officials
were ruining the trade of the company, and trade could flourish only if the duties
were removed.
3. How did East India Company get the benefits of Diwani?
Ans:- The East India Company was appointed as the Diwan of the provinces in
Bengal in 1765 by the Mughal emperor.
As a result, vast resources of Bengal were utilised by the Company.
  From the early 18th century, the East India Company’s trade with India
started expanding.
 Britain did not have goods to sell in India, hence most of the goods had to be
purchased from India using silver and gold imported from Britain.
 Once British East India Company took the power of Diwani after the Battle
of Plassey, the outflow of silver and gold from Britain slowed down.
 Now the East India Company started meeting its expenses from the revenues
it earned from India.
 The assumption of Diwani helped the East India Company to maintain its
offices, forts, buildings, company troops, and were able to purchase silk
textiles and cotton in India.
4. In what way was the administration of the Company different from that of
Indian rulers?
Ans:- The difference in the administration of the company and that of the Indian
rulers is given below:

Company Administration Administration of Indian Rulers

The company divided the territories Indian rulers divided the territories into
into presidencies district, pargana, tehsil and parishad

Governor ruled the administrative Zamindar or Peasants were responsible

units. for their units
Districts were ruled by the
Collectors.

Governor-General was the head of King or Nawab was the head of the state
the state

The introduction of several acts: Indian rulers brought no such acts but
 Regulating Act used to rule with their Farman.

 Indian Council Acts

 Montague-Chelmsford
Reforms
5. Explain the system of “subsidiary alliance”.
Ans:-The following were the features of system of Subsidiary Alliance given by
Lord Wellesley:
a) According to this alliance Indian rulers were not allowed to form their own
independent armed forces.
b) Indian rulers accepting the Subsidiary Alliance were not allowed to form any
alliance with another ruler, nor can they declare war against any power without the
permission of English.
c) The Indian rulers accepting this system were to agree to the stationing of the
British contingent force for whose maintenance they would pay a subsidy.
d) He would allow a British resident to stay in his state.
e) He would not employ any Europeans other than the English and if there was
already any, he would dismiss them.
f) In return for acknowledging the British Company, army of English was to
protect them but the ruler has to pay for the Subsidiary forces.
g) If any ruler failed to make the payment, then part of his territory was taken away
as penalty.

ACTIVITY
Collect pictures, stories, or poems and information about anyone among the
following. (in your Notebook)
 Rani of Jhansi
 Haider Ali
 Maharaja Ranjith Singh.