EAST INDIA COMPANY

East India Company

• East India Company, also called English East
India Company (1600–1708); Governor and
Company of Merchants of London Trading into
the East Indies (1708–1873); United Company of
Merchants of England Trading to the East Indies;
English company formed for the exploitation of
trade with East and South Asia and India,
incorporated by royal charter on December 31, 1600.
 East India Company
• Starting as a monopolistic trading body, the
company became involved in politics and
acted as an agent of British imperialism in
India from the early 18th century to the mid-
19th century.
• In addition, the activities of the company in
China in the 19th century served as a catalyst
for the expansion of British influence there.
 East India Company
• The company was formed to do spice trade in
the East India.
• That trade had been a monopoly of Spain and
Portugal until the defeat of Spanish Armada
(1588) by England gave the English the chance
to break the monopoly.
• There were temporary joint stocks until 1657,
when a permanent joint stock was raised.
 East India Company
• The company’s defeat of the Portuguese in
India (1612) won them trading concessions
from the Mughal Empire.
• The company settled down to a trade in
cotton, silk, indigo, and saltpetre, with spices
from South India.
• It extended its activities to the Persian Gulf,
Southeast Asia, and East Asia.
 East India Company
• After the mid-18th century the cotton-goods trade
declined, while tea became an important import from
China.
• Beginning in the early 19th century, the company
financed the tea trade with illegal opium exports to
China.
• Chinese opposition to that trade precipitated the first
Opium War (1839–42), which resulted in a Chinese
defeat and the expansion of British trading privileges;
• A second conflict, often called the Arrow War (1856–
60), brought increased trading rights for Europeans.
 East India Company
• The original company faced opposition to its
monopoly, which led to the establishment of a
rival company and the fusion (1708) of the two as
the United Company of Merchants of England
trading to the East Indies.
• The United Company was organized into a court
of 24 directors who worked through committees.
They were elected annually by the Court of
Proprietors, or shareholders.
• When the company acquired control of Bengal in
1757, it led to British government intervention.
 East India Company
• In the 18th century, the transit of goods by road and
navigable rivers was subject to inland duties.
• The East India Company had, however, obtained a
‘firman’ or royal order, exempting their export and
import trade from these payments.
• After Plassey in 1757 (defeating Nawab Siraj-ud-
daulah), the servants of the East India Company
engaged in the inland trade of Bengal on their own
account, also claimed as private traders exemption
from duties which had been granted earlier only for
the company’s import and export trade.
 East India Company
• The company’s servants conveyed their goods from
one place to another duty-free, while the goods of the
country merchants were heavily taxed in transit.
Consequently, the country traders were, naturally
enough, ruined, and the Nawab’s revenues declined.
• They would forcibly take away the goods and
commodities of the cultivators and merchants at a
fourth of their value and price heavily for their own
products while selling.
• Clive insisted on keeping the inland trade in Bengal for
the profit of the Company’s servants only.
 East India Company
• In the early years of the 19th century while the
Company’s trade averaged 1,882,718 pounds
annually, private trade averaged 5,451,452
pounds per year.
• The process of elimination of Indian
manufactures went on.
• An application to the British Government to
reduce the duties on Indian cotton and silk
fabrics, signed by a large body of noted Indians,
was rejected.
 East India Company
• In a celebrated work on political economy,
written in Germany in 1844, a German
Economist, Fredrick List, pointed out the grave
injustice which had been done to India.
• He commented, “India had not only the
advantage of cheaper labor and raw material, but
also the experience.”
• Some articles of Indian traders had to pass
through ten custom houses and several
subordinate check posts before they reach the
presidency.
 East India Company
• The Regulating Act (1773) and William Pitt the
Younger’s India Act (1784) established government
control of political policy through a regulatory board
responsible to Parliament.
• Thereafter the company gradually lost both
commercial and political control. Its commercial
monopoly was broken in 1813, and from 1834 it was
merely a managing agency for the British government
of India.
• It was deprived of that role after the Indian Mutiny
(1857), and it ceased to exist as a legal entity in 1873.