English East India Company

1. Introduction: The Evolution of English East India Company

By the time the British East India Company made port in India, the region had become a ground for competition between
trading companies from all over Europe. Competition between them for greater trading rights and the race to gain the
pleasure of the Mughals propelled these trading companies into Indian politics but it was a combination of a rise of their
mercantilist economics based on the so-called factory system coupled with a number of Charter Acts that made them
political entities, and a decline in the power of Mughal Empire that set the stage for the emergence of the English East
India Company as a political force to be reckoned with. The waning influence of the Mughals allowed several local rulers
to become important actors but without significant military or economic capabilities, these so called kings, princes and
nawabs became pawns. A few rulers who put up a fight failed to forge alliances with their rival local rulers to offset the
rising power of the European trading companies.

2. Origins and Development of English EIC as a Trading Firm

Before the Mughal Empire came into being in 1526, events that contributed to its demise were already taking shape. In
1498, the Portuguese under Vasco da Gama made port at Calicut on the Malabar Coast. Almost a century after that, the
Dutch had also made port at Pulicat on the Eastern Coast of India in 1595. British were the third to arrive at the scene in
1608 when they made port at Surat.
a. The Charter of 1600 and Arrival in India in 1608: English East India Company came into being through a Charter
that was signed by Queen Elizabeth I on the last day of the year 1600 AD, granting the EIC a monopoly on trade in
the East so far as competition from within Britain was concerned. The EIC still had to compete with a number of
other European trading companies that were already there and that wold emerge on the scene later. It was the
third voyage of the EIC that brought their ship to Surat located on the Malabar Coast in 1608 but in order to trade
in India, the EIC needed trading rights.
b. Competition from Europeans and Firman from Prince Khurram in 1612: though well received at Emperor
Jahangir’s court, the EIC was not granted trading rights straight away, primarily because the British had not shown
their ability to challenge Portuguese supremacy in Indian waters. The Mughals who were primarily a land power
without any naval force were not willing to sever ties with a naval power with whom they were on favourable
terms. This changed in 1612 when the British under Captain Thomas Best, defeated a Portuguese squadron. In the
same year, Prince Khurram issued a firman that granted trading rights to the EIC.

3. Emergence of English EIC as a Political Force

With the arrival of the Danish to India in 1616 at Tranquebar, four major European economic powers were competing for
the same goods: cotton, silk and spice including but not limited to pepper, cinnamon, cardamom, and cloves. The rapid
increase in their demand drove their prices up thereby reducing the profit margin for the traders who then sought to a
competition of annihilation with each other. The best way for them to increase their profit margin was to eliminate their
rivals. This drove them all into militaristic politics involving ships armed with canons to wreak havoc on each other’s trading
posts (they were situated on the Indian coast and made easy targets for the armed ships) and factories on land that were
fortified for protection against naval bombardments and guarded by armies for protection against grounded attacks.
a. Expansion of Trading Posts, Establishment of Factories and their Fortification: with the elimination of rivals, each
remaining company sought to expand its own trading empire and thus they created new trading posts. The English
EIC spread from Surat to other areas including Aramgaon and Masulipatam. In 1633, EIC set up its fortified factory
in what came to be known as Fort St. George, and in 1639, the EIC bought Madras. This was followed up with the
acquisition of Bombay in 1668 and Calcutta in 1690 where the EIC was granted trading rights by the Nawab of
Bengal ruling under Mughal suzerainty. Factories were trading posts with factors or agents left behind by ships
returning to Europe so that they could in the meantime negotiate with the locals, the terms of their future trade
deals and make arrangements for procuring return cargo. However, fortification of factories led to conflicts
between the EIC and the local rulers due to which the EIC got involved in local politics and armed its fortified
factories to protect them. At times, these armed men would be from England and at times they would be from
India itself. These factories serves as important sites as the EIC would encourage traders and merchants to settle
nearby and then a whole urban settlement would emerge with the factory at the center of the new settlement’s
political economy.
 b. Charters of 1661 and 1683, and War with the Mughals: during this time, the Charters of 1661 and 1683, issued
by the British crown due to increasing competition between the Europeans in India, had given the English EIC the
authority to send ships of war, men and ammunition for the security of their factories, and the authority to declare
war or make peace with any power. Between 1686 and 1690, a conflict over taxation led to a full-fledged war
(Child’s War) between the Mughals and the EIC but with the mighty Aurungzeb on the throne, the EIC had little
chance of winning. Even after victory, the Mughals could not expel the EIC as British were the dominant power at
sea and with the Deccan and North West frontier being financial black holes, the Mughals needed as many sources
of finance as possible. So the EIC was fined and allowed to stay. By 1698, EIC had bribed the Mughal officials to
get permission to fortify its factory at Calcutta and to attain zamindari rights over three villages including what
was Calcutta.

4. English EIC as the Dominant Political Force in the Indo Pak Sub Continent
With the death of Aurungzeb, the Mughal Empire started to decline and to take advantage of the vanity of the successors
of Aurungzeb, the EIC sent its agents to Delhi. Farrukh Syar issued three firmans to the EIC in 1713 which granted them
the right to duty free and tax free trade in Calcutta, Madras and Bombay. But without a strong Emperor at the center,
local rulers started to become independent, and refused to recognize any settlement the EIC had entered into with the
Mughal Emperor at Delhi. In 1717, Murshid Quli Khan became the first independent Nawab of Bengal. His successors –
Alivardi Khan and Siraj ud Daula – followed his line in taking a hard stance against the British over the matter of non-
payment of taxes and fortifications of their factories.
a. Battles of Plassey and Buxar: Nawab Siraj ud Daula attacked and took Calcutta from the British in 1756 and EIC
under Robert Clive took it back. But instead of waiting for an opportune moment, Clive took the initiative and
turned Siraj ud Daula’s commander in chief, Mir Jaffar, against him. Clive defeated Siraj ud Daula in the Battle of
Plassey in 1757, effectively making EIC the kingmaker in Bengal. EIC replaced a number of Nawabs within a few
months. One of them, Mir Qasim, showed independent tendencies, forged an alliance with Nawab Shuja ud Daula
of Oudh with whom resided at the time, the Mughal Emperor Shah Alam II, and faced the EIC in the Battle of Buxar
in 1764. EIC emerged victorious and got diwani rights in Bengal i.e. the right to collect taxes. This effectively made
the EIC, the supreme power in Bengal for all practical purposes.
b. EIC’s Domination of South India: Southern India posed a different challenge for the EIC. Opposition in this region
was organized and there were multiple forces to be dealt with including the Mysorean Dynasty led by Haider Ali
and then his son, Tipu Sultan; the Nizam of Hyderabad; the Marathas who with the help of the French, were
expanding towards Central India from the West, challenging the British who were approaching Delhi from the
East; and the French East India Company which initially led by Dupleix had defeated the EIC on every diplomatic
front. But the tide began to turn with Robert Clive’s victory at Arcot in 1751 after which despite a few temporary
setbacks that ended in treaties of restitution with the rulers of Mysore, there was no stopping the EIC, who settled
their rivalry with the French for all practical purposes at the Battle of Wandiwash in 1760, followed by a defeat of
the Dutch, and a decisive victory over the Mysorean Dynasty in a series of four Anglo-Mysore Wars fought by
various Governor Generals of the EIC between 1767 and 1799.
c. EIC’s Conquest of Central India: after the assassination of Narayan Rao, the fifth Peshwa of the Marathas, the
largest and most powerful confederacy in India had been busy in a civil war. The British saw this as an opportunity
to interfere in the internal matters of the Marathas and weaken them from the inside – classic divide and rule
tactics that the British were so good at. In the Maratha civil wars of 1775 and 1803, the British sided with the
weaker claimant to the office of Peshwa but failed to achieve a decisive settlement in their favour. It was only in
1818 when the British faced them for the third time that the British emerged victorious. The third battle with the
Marathas had been a result of the refusal of the Marathas to help the British against the Pindaris in 1817. In the
absence of French support and decline in Maratha power due to continuous internal strife, they proved to be no
match for the British. In 1818, after the third Anglo-Maratha war, the office of the Peshwa was abolished. There
was no other serious contender for Delhi after that.
d. EIC’s Control of Delhi: by the time Akbar Shah II, the second last Mughal Emperor was on the throne in 1806,
Mughal control of the Red Fort at Delhi was only in name since the EIC had its regent placed at the Red Fort. Even
within Delhi, the city to which the extent of the Mughal Empire was restricted, law and order was maintained by
the EIC and taxes were also collected by the EIC. The final blow was to come later in the form of a failed attempt
at a revolution in 1857 when the EIC was replaced by the British Crown. Till then, EIC did as it pleased in India. Its
internal and external sovereignty was unchallenged in India for a while.
 e. EIC’s Annexation of Sindh after the Failure in Afghanistan: frontier regions of India were of special interest to the
English East India Company, especially once the EIC was convinced that the Southward expansion of Tsarist Russia
under the Romanovs was a threat to its own imperial/colonial interests. When diplomatic missions to Afghanistan
failed, the EIC organized its “Army of the Indus” to invade Afghanistan in 1839 and replace the Afghan Emir Dost
Muhammad with Shah Shuja. While the army was successful at first, the Afghans rose up in rebellion against the
alien invaders and drove the British out in 1842. To rescue the Englishmen left behind in Afghanistan, the EIC
organized another “Army of Retribution” in 1843 and rescued the Englishmen whom the Afghans had taken as
prisoners. With the conclusion of the First Anglo-Afghan War, the EIC wanted to have a secure launching board in
Sindh, not to mention that it wanted to cut its military costs of maintaining an army in Sindh. Thus, Sindh was
annexed though many saw it as a move to emphasize the EIC’s dominant position in India – the company did not
want the Indians to take the disaster in Afghanistan as a sign of EIC’s weakness and wanted them to know that it
could still do with India whatever it wanted.
f. The Sale of Kashmir and EIC’s Annexation of Punjab: one of the strongest successor Kingdoms of the Mughal
Empire was the Sikh Kingdom under Maharaja Ranjit Singh who had founded it officially after the occupation of
Lahore in 1799. EIC entered into an agreement with Ranjit Singh in 1809 according to which the Sutlej was
demarcated as the boundary between the EIC’s possessions in India and the Sikh Kingdom. This was respected by
both sides till the death of Ranjit Singh in 1839 after which the Sikh Kingdom stated to weaken and disintegrate.
As the EIC posted its troops on the South-East bank of Sutlej to prevent a spillover effect and the Sikhs posted
their soldiers on the North-West bank of Sutlej as a precaution against a possible invasion by the EIC, both armies
launched a preemptive attack on each other due to mutual suspicions. The First Anglo-Sikh War led to a Sikh
defeat after which Kashmir was stripped off from the Sikh Kingdom and sold off to Gulab Singh Dogra in 1846.
Two years later, a small quarrel between the locals and the EIC officials in Multan spiraled into the Second Anglo-
Sikh War which concluded in 1849 with a decisive EIC victory as a result of which Punjab was annexed by the EIC.
Starting off in Eastern India and moving towards Western India, the EIC had Delhi and Agra surrounded by the time the
War of Independence broke out, because of which the uprising remained confined to Central India. Other factors too
played their part but they all had to do with the political and economic might of the EIC which was restrained not by some
Indian force but by its own imperial overstretch that led to practices inviting the attention and involvement of the British
Government which took over the Indian possessions of the EIC in 1858.

5. Conclusion: The Rise of English East India Company

Economic interests of an entity that started out as a purely trading company necessitated its involvement in politics. With
only profit motives in sight, and without any subjects to care for and people to whom it was accountable for the way it
conducted itself, the Company was able to indulge in ruthless power politics in which it took advantage of weaknesses of
every other economic and political actor and at the same time persuaded the British government to increase its authority
and capabilities. Declining Mughal power and the internal divisions of India – political, religious or class-based – allowed
the EIC to rise to political power in almost a century and a half and consolidate its position in another half century. By the
time EIC was done with India, there was no other actor within India that could realistically challenge its position.