From Trade to Territory: The Company Establishes Power

Mughal Decline and the Rise of Regional Powers

Aurangzeb, the last powerful Mughal ruler, died in 1707.
After Aurangzeb's death, Mughal governors (subadars) and big zamindars asserted their authority, leading to the emergence of regional kingdoms.
Delhi's role as an effective center diminished as powerful regional kingdoms arose.
The British emerged as a new power in the second half of the 18th century, initially as a trading company.

East India Company Comes East

In 1600, Queen Elizabeth I granted the East India Company a charter, giving it the sole right to trade with the East.
The charter allowed the Company to buy goods cheaply and sell them at higher prices in Europe, excluding competition from other English trading groups.
Mercantile trading companies profited by excluding competition to buy cheap and sell dear.
The royal charter could not prevent other European powers from entering Eastern markets.
The Portuguese, including Vasco da Gama (who discovered the sea route to India in 1498), were already present on the western coast of India with a base in Goa.
The Dutch and French traders also explored trade possibilities in the Indian Ocean.

Competition and Conflict

European companies competed for the same goods: fine qualities of cotton and silk, pepper, cloves, cardamom, and cinnamon.
Competition led to increased purchase prices and reduced profits.
Trading companies sought to eliminate rivals to flourish, leading to fierce battles.
Throughout the 17th and 18th centuries, they sank each other’s ships, blockaded routes, and prevented rival ships from moving with supplies.
Trade was conducted with arms, and trading posts were protected through fortification.
Efforts to fortify settlements and conduct profitable trade resulted in intense conflict with local rulers.
The Company found it difficult to separate trade from politics.

Trade in Bengal

The first English factory was set up on the banks of the river Hugli in 1651.
Company traders, known as "factors," operated from this base, which included a warehouse for goods and offices for Company officials.
The Company persuaded merchants and traders to settle near the factory.
By 1696, a fort began to be built around the settlement.
In 1698, the Company bribed Mughal officials to gain zamindari rights over three villages, including Kalikata, which later became Calcutta (Kolkata).
The Mughal emperor Aurangzeb issued a farman (royal order) granting the Company the right to trade duty-free.
The Company continuously pressed for more concessions and manipulated existing privileges.
Company officials carrying on private trade refused to pay duties, causing significant revenue loss for Bengal.
The Nawab of Bengal, Murshid Quli Khan, protested this loss of revenue.

Conflict with Bengal Nawabs

In the early 18th century, conflict between the Company and the Nawabs of Bengal intensified.
After Aurangzeb's death, Bengal nawabs asserted their power and autonomy.
Murshid Quli Khan, Alivardi Khan, and Sirajuddaulah were strong rulers of Bengal who followed each other.
They refused to grant concessions to the Company, demanded large tributes for the Company’s right to trade, denied the right to mint coins, and stopped fortification extensions.
The Nawabs accused the Company of deceit, depriving Bengal of revenue, undermining the Nawab's authority, refusing to pay taxes, writing disrespectful letters, and humiliating officials.
The Company claimed that unjust demands from local officials were ruining trade, and trade could only flourish if duties were removed.
The Company wanted to enlarge settlements, buy villages, and rebuild forts to expand trade.
These conflicts led to confrontations, culminating in the Battle of Plassey.

Battle of Plassey

After Alivardi Khan's death in 1756, Sirajuddaulah became the Nawab of Bengal.
The Company sought a puppet ruler who would grant trade concessions and privileges.
The Company tried to help one of Sirajuddaulah’s rivals become the Nawab but failed.
Sirajuddaulah asked the Company to stop meddling in political affairs, halt fortification, and pay revenues.
Negotiations failed, and the Nawab marched with 30,000 soldiers to the English factory at Kassimbazar, capturing officials, locking the warehouse, disarming Englishmen, and blockading ships.
He then marched to Calcutta to control the Company’s fort.
Company officials in Madras sent forces under Robert Clive, reinforced by naval fleets.
Prolonged negotiations with the Nawab followed.
In 1757, Robert Clive led the Company’s army against Sirajuddaulah at Plassey.
Mir Jafar, one of Sirajuddaulah’s commanders, did not fight, as Clive had promised to make him Nawab after defeating Sirajuddaulah.
The Battle of Plassey was the first major victory for the Company in India.

Aftermath of Plassey

After the Battle of Plassey, Sirajuddaulah was assassinated and Mir Jafar was made the Nawab.
The Company was unwilling to take over administration, focusing on trade expansion.
The Company preferred working through local rulers willing to grant privileges to avoid direct territorial control.
Even puppet nawabs were not always helpful, needing to maintain dignity and sovereignty to retain the respect of their subjects.
When Mir Jafar protested, the Company deposed him and installed Mir Qasim.
When Mir Qasim complained, he was defeated at Buxar in 1764, driven out of Bengal, and Mir Jafar was reinstalled.
The Nawab had to pay Rs. 500,000 monthly, but the Company wanted more money for wars, trade, and expenses.
The Company desired more territories and revenue.
By 1765, the Company's attitude changed, with Clive declaring, "We must indeed become nawabs ourselves."
In 1765, the Mughal emperor appointed the Company as the Diwan of Bengal provinces.
The Diwani allowed the Company to use Bengal’s vast revenue resources, resolving the need to import gold and silver from Britain to buy Indian goods.
Revenues from India financed Company expenses, including purchasing cotton and silk, maintaining troops, and building forts and offices in Calcutta.

Company Officials become Nabaobs

The term "nabob" comes from the Indian term nawab, signifying the Company officials who had accumulated wealth and adopted an extravagant lifestyle.
Company servants often arrived in India with little money but amassed fortunes through corruption.
They engaged in private trade, accepted bribes, and exploited the system for personal gain.
Robert Clive himself amassed a fortune in India before leaving in 1767.
His wealth was scrutinized by the British Parliament, and he was acquitted of corruption but later committed suicide in 1774.
Not all Company officials were corrupt; many came from humble backgrounds and did not die wealthy.
Those who managed to return to Britain led ostentatious lives and flaunted their riches, attracting social climbers and earning the contempt of others.
In British cartoons and plays, they were ridiculed as upstarts.

The Company Begins to Rule: Investigating Warren Hastings

The process of the Company's transition from trade to governance had begun.
Warren Hastings became the Governor-General of Bengal in 1773.
He played a significant role in expanding the Company's power.
Hastings faced impeachment in the British Parliament for being wrongly charged with maladministration during his governorship from 1773 to 1785.
The trial highlighted the controversial nature of the Company's activities and the personal gains made by its officials.

The Growth of Company Army

As the Company engaged in conflicts with local rulers, it needed to build a substantial army.
The British East India Company's army was known as the "sepoy" army because it was composed of Indian soldiers (sepoys).
The sepoys were trained and equipped in the European style, reflecting the modernization of warfare.
The Company faced challenges in recruiting soldiers, as many came from peasant families and had to be persuaded to give up their traditional occupations.
The soldiers' loyalty and willingness to fight were influenced by factors such as pay, discipline, and the perceived benefits of serving the Company.

The Sepoy Mutiny

Sepoys were Indian soldiers serving under British command.
The revolt of 1857, also known as the Sepoy Mutiny, was a major uprising against British rule in India.
It started due to various factors, including resentment against British policies, economic grievances, and cultural insensitivity.
A key trigger was the introduction of new rifle cartridges greased with animal fat, which offended both Hindu and Muslim soldiers.
The mutiny spread across northern India, leading to violent clashes between the sepoys and British forces.
The uprising was eventually suppressed, but it led to significant changes in British policies and administration in India.

Conclusion

The East India Company's