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2. From Trade to Territory

This chapter talks about how the East India Company gained power in India

2.1           State of Indian Rulers

Aurangzeb was the last powerful ruler of the Mughal Empire. He established control over a large part ofIndia. After his death in 1707,Delhi no longer remained an effective centre of power, as governors and landlords started asserting their power and control to establish regional kingdoms 

By the second half of the eighteenth century, the British, who come toIndiaas a small trading company, started emerging as the new power on the political horizon.

2.2           East India Company establishes foothold

  1. In 1600, the East India Company acquired a charter from the Queen Elizabeth I, allowing them the sole right to trade with the East.
  2. With this right, the Company could venture across the oceans to do the trade, buying things at cheap price & selling them at a higher price inEurope.
  3. However, this royal charter could not prevent other European powers like Portuguese, the Dutch & the French from entering inIndia. In fact, it was Vasco da Gama, a Portuguese explorer, who had discovered this sea route toIndiain 1498.
  4. As all the companies were interested in buying the same things – silk, cotton, spices, the prices of these shot up & their profits were reduced.
  5. This resulted in fierce battles between the trading companies & also led to intense conflicts with the local rulers.

2.3           East India company begins trade in Bengal

  1. In 1651, the first English factory was set up on the banks of the river Hugli. They also established a warehouse & a company office.
  2. As trade expanded, the merchants & traders were asked to come & settle near the factory.
  3. In 1696, the company began building a fort around the settlement.
  4. In 1698, the Company got Zamindari rights of three villages, one of them Kolkata, by bribing Mughal officials.
  5. The company tried to pass for more concessions & manipulated the privileges given to them.
  6. Officials refused to pay the duty on private trade also, which resulted in enormous revenue loss for Bengal.

2.4           How trade led to Battles?

  1. Through the early eighteenth century, the conflict between the Company & the nawabs of Bengal intensified.
  2. After the death of Aurangzeb, the other strong rulers ofBengal- Murshid Quli Khan, Alivardi Khan & Sirajuddaulah refused to grant concessions to the Company.
  3. The Nawabs demanded large tributes for the company’s right to trade, denied it any right to mint coins.
  4. The company, on its part, declared that their demands were unjust & the trade could flourish only if the duties were removed.
  5. Their conflicts led to confrontations & finally culminated in the famous Battle of Plassey.

2.5           The Battle of Plassey

  1. Alivardi Khan died in 1756 and Sirajuddaulah became the Nawab of Bengal
  2. The Company wanted a puppet ruler instead, who would willingly give privileges. So they tried to help one of Sirajuddaulah’s rivals become the Nawab
  3. Sirajuddaulah got furious and asked the company to stop meddling in the political affairs, stop buildings forts and pay the revenues.
  4. After the negotiations failed, Sirajuddaulah along with 30,000 soldiers captured the English factory at kassim bazar and the Company’s fort at Calcutta.
  5. On hearing about the fall ofCalcutta, company officials inMadrassent forces under the command of Robert Clive. After the negotiations with the nawab failed, Robert Clive led the company’s army against Sirajuddaulah at plassey
  6. Clive managed to secure the support of Mir Jafar, one of the commanders of Sirajuddaulah. He did not fight the battle against the East India company and thus helped the company win the battle. This was the company’s first major victory in a battle inIndia
  7. Sirajuddaulah lost the battle and was assassinated. Mir Jafar was made the nawab
  8. The company realized that even puppet nawabs were not that helpful as they needed to maintain a basic appearance of dignity in front of the subjects.
  9. When Mir Jafar protested, he was deposed and Mir Qasim was made the nawab.
  10. In 1764, Mir Qasim also started complaining, so the company fought a war with him (the battle of Buxar) and won the battle. Mir Jafar was again reinstated as the nawab of bengal.
  11. In 1765, Mir Jafar died. Company realized that it was difficult to get things done from puppet nawabs, so they wanted to become the nawabs themselves. The company was appointed as the Diwan of Bengal
  12. Now they could use the vast revenues resources of Bengal instead of buying good against gold/silver they brought fromBritain. These revenues could be used to purchase cotton & silk textiles inIndia, maintain company troops & meet the cost of building the company fort & offices at Calcutta.

2.6           The Rule of Company officials

As the company acquired more power & authority, the company servants wanted to live like nawabs. The actual nawabs were forced to give land & vast sums of money to company officials. This is how the company officials amassed huge amounts of wealth inIndia.

2.7           Company Rule Expands

Between 1757 and 1857, the East India Company annexed various Indian states. Instead of a direct military attack, it used political, economic and diplomatic methods to influence the states

  1. After the Battle of Buxar (1764), he Company appointed Residents in Indian states who were actually the political & commercial agents for them.
  2. Through the residents, the company directly started interfering in the internal affairs of the Indian states.
  3. Company also forced states to agree for a ‘subsidiary alliance’, that is, they were to be protected by the company. In turn they had to pay for the ‘subsidiary forces, failing which, a part of their territory were taken away.

2.8           TIPU SULTAN – The ‘Tiger of Mysore’

Mysorehad grown in strength under the leadership of powerful leaders like Haider Ali (ruled 1761-1782) and his famous son Tipu sultan (ruled 1782 – 1799).

  1. Mysore controlled the profitable trade of Malabar Coast consisting of pepper and cardamom
  2. In 1785, Tipu Sultan stopped the export of sandalwood, pepper & cardamom from his ports & disallowed local merchants from trading with the Company.
  3. He also modernized his army with the help of French
  4. The company fought four wars withMysore(1767-69, 1780-84, 1790-92 & 1799). In the last war – the Battle of Seringapatam, Company ultimately won the war and Tipu Sultan was killed
  5. The state was placed under the rule of former ruling dynasty – wodeyars, and a subsidiary alliance was imposed on the state.

2.9           War with the Marathas

  1. Since late eighteenth century, the company wanted to destroy Maratha Power
  2. The Marathas were subdued in a series of wars. The first war ended in 1782, with neither of them a clear victor
  3. The second Maratha War (1803-05) resulted in the British gaining Orissa & the territories north of the Yamuna includingAgraandDelhi
  4. The third Anglo-Maratha War (1817-19) crushed Maratha Power
  5. The Company gained complete control over the territories south of the vindhyachal mountain range 

2.10     The Claim to Paramountcy

From early nineteenth century, the company pursued an aggressive policy of territorial expansion.

  1. Under Lord Hastings (Governor – General from 1813-1823), a new policy of ‘paramountcy’ was initiated, which claimed that the authority of the company was supreme
  2. It also said hat in order to protect its interests, it was justified in annexing any Indian kingdom
  3. This process, however, was challenged. For example when the British tried to annex the small state of kitoor in Karnataka, Rani Channamma took to arms & led an anti-British resistance movement, which was carried on by Rayanna, a poor chowkidar in kitoor after the Rani’s death in prison in 1829
  4. In the late 1830s, fearing that Russia might expand across Asia, entering India from North-West, British wanted to secure their control over North-West
  5. British fought a long war inAfghanistan(1838-1842) and imposed an indirect Company rule there
  6. Sindh was annexed in 1843
  7. After the death of Maharaja Ranjit Singh in 1839, British fought two prolonged wars with the Sikh kingdom and in 1849,Punjabwas annexed. 

2.11     The Doctrine of Lapse

Lord Dalhousie (Governor – General from 1848-1856) devised a policy which was known as the Doctrine of Lapse. According to this doctrine, if any Indian ruler died without a male heir, his kingdom would ‘lapse’ & become part of the company territory.

  1. By applying this doctrine, many kingdoms were annexed
    1. Satara in 1848
    2. Sambalpur in 1850
    3. Udaipurin 1852
    4. Nagpurin 1853
    5. Jhansiin 1854
    6. Avadh in 1856
  2. While annexing Awadh, British gave an argument that they were freeing people from the ‘misgovernment’ of the Nawab. Due to the humiliating way in which the Nawab was deposed, the people of Awadh joined the great revolt that broke out in 1857 

2.12     Setting up a New Administration

When Waver Hastings (Governor – General from 1773 to 1785) took over Company had already acquired power in Bombay&MadrasbesidesBengal.

  1. British territories were divided into three administrative units called Presidencies – Bengal, Madras & Bombay.
  2. Each presidency was ruled by a Governor, over which was the supreme head of the administration, Governor General.
  3. Warren Hastings introduced several reforms.
  4. From 1772, a new system of justice was introduced. Each district had two courts
    1. A criminal court called Faujdari adalat
    2. A civil court called Diwani adalat
  5. In 1775, a digest of Hindu Laws and in 1778, a code of Muslim laws were complied for the benefit of European judges.
  6. A new Supreme Court & a court of appeal – the sadar Nizamat adalat was set up.
  7. Collector was the principal figure in an Indian district. His main job was to collect revenue & taxes & also to maintain law & order & his office the collectorate became the new centre of Power. 

2.13     The Company Army

The Colonial rule inIndiabrought in new ideas of administration & reform, but its power rested on is military strength. 

The company had to match the strengths of various Indian armies. 

Mughal Army mainly composed of Cavalry (trained soldiers on horseback) & Infantry (paidal or on foot soldiers)

  1. Soldiers were trained in archery & use of the sword.
  2. Mughals army dominated by Cavalry & the need to have a large professionally trained infantry was not felt.
  3. In eighteenth century, Mughals states like Awadh & Benaras started recruiting peasants into their army & trained them as professional soldiers.
  4. Much like the Mughal successor states like Awadh & Benaras, company also adopted the same method of recruiting peasants as Sepoys (soldiers)
  5. British, at that time were fighting wars inBurma&Afghanistan&Egypt, so they trained Indian soldiers with the latest in warfare technology.
  6. In the early nineteenth century, the British introduced a uniform military culture.
  7. Soldiers were subjected to European-style training, drill & discipline. 


Thus, over a period of time, the East India Company was transformed from a trading company to a territorial colonial power. 

With the arrival of steam technology, nowIndiawas only three weeks away fromBritainby sea. So, more Britishers & their families come toIndia. 

By 1857, the East India Company had virtually the whole ofIndiaunder its control.