EAST INDIA COMPANY

The East India Company began as a joint-stock enterprise incorporated by royal charter; established a trading monopoly with East Asia, Southeast Asia, and India; and became progressively involved in both domestic and international politics. It played a vital role in securing Britain's hegemony over maritime shipping and was instrumental in the foundation of the British Empire in India. With settlements in the Indian coastal cities of Bombay, Surat, Calcutta, and Madras, the Company exported cotton and silk piece goods, indigo, saltpeter, and spices in exchange for bullion, eventually expanding its trade to the Persian Gulf, parts of Southeast Asia, and East Asia, including China, in the nineteenth century. Merging in 1708 with its main competitor to form an exclusive monopoly, the Company was run by twenty-four directors elected annually by a Court of Proprietors, who also exerted powerful influence in the British Parliament.

In India the Company obtained a Mughal charter of duty-free trade (1717), and invested heavily in local manufacture, especially textiles, operating from Fort William, Calcutta, and Fort Saint George, Madras, on the eastern seaboard. Company servants became involved in lucrative internal and coastal trade for their own private investments, leading to friction with local authorities. In Bengal, private trade in salt, betel nut, tobacco, and saltpeter; the fortification of Calcutta; and connections with indigenous traders ill-disposed toward the Nawab (Sirajud-Dawlah, c. 1729–1757) resulted in conflict, Robert Clive's (1725–1774) victory at the Battle of Plassey (1757), and the installation of "puppet" rulers. One of them, Mir Kasim, (r. 1760–1763) protested the flagrant abuse of trading privileges by Company servants, which led to the decisive Battle of Baksar (1764) in which Kasim, the Nawab of Awadh, and the Mughal emperor Shah Alam II (r. 1759–1806) joined forces, only to be routed by the Company's superior Bengal Native Army. The Mughal emperor, in exchange for a yearly tribute, made the Company the collector (Diwan) of revenues of Bengal, Bihar, and Orissa, an annual gain of approximately £6 million, which solved its investment and currency problems. However, revenue collection proved difficult and administrative negligence coupled with drought led to crop failure and the famine of 1770, in which millions perished.

In southern India the East India Company was involved in a protracted military and diplomatic contest with the Marathas, the Nizam's dominion of Hyderabad, kingdom of Mysore ruled by Hyder Ali (1722–1782), and the French. The Company was successful in stalling the French, who were led by François Dupleix (1697–1763), but the conflict escalated during the Seven Years' War (1756–1763) leading eventually to an end of the French challenge at Wandiwash (1760). Soon after, both Arcot and Tanjore came under indirect British rule. Mysore provided stiff resistance until the defeat of Tippu Sultan (1749–1799) in 1799. The Marathas, divided into various ruling houses, their forces depleted by the confrontation with the Afghans (1761), finally succumbed to the British after 1803. The Sikhs of Punjab were humbled in the 1840s and other princely states accepted the suzerainty of the Company, which had emerged as the most formidable fiscal-military state in the subcontinent.

Company affairs, especially mismanagement in Bengal, led to parliamentary inquiry into Indian affairs. Through the Regulating Act (1773) and Pitt's India Act (1784) a Board of Control responsible to Parliament was established, ending the undue influence of shareholders in Indian policy. Warren Hastings (1732–1818), the first governor-general of India (1772–1785), sought to restructure the fiscal and military affairs of the Company, but was charged with corruption by Parliament (led by Edmund Burke [1729–1797]), impeached (1788), and much later acquitted. Significant changes took place in British India by the early nineteenth century: the revenue system was restructured with new property rights vested in land; marketplaces, custom, and police were overhauled; an extensive cartographic survey of India was initiated; a new civil service trained at Haileybury College was put in place; strict limits were placed on all concourse between Britons and Indians; English education was gradually promoted; and modern technologies, including railways, steamships, and the telegraph, were selectively introduced.

In the aftermath of the loss of the American colonies, India under Company rule had emerged as a cornerstone of imperial Britain, although as a dependency and not a settler colony, a fact that possibly restricted the direct impact of the Indian imperial venture on British domestic politics. Under the Company Raj, Indian manufacturers declined in the nineteenth century, making way for a vast, largely dependent market for Britain's industrial output. In 1813 the Company forfeited its commercial monopoly, although it remained as the administrative agent in India till the Sepoy Mutiny and popular uprisings of 1857: a brief debacle for British rule in India that set the stage for direct Crown Rule.

See alsoColonialism; Colonies; Great Britain; Imperialism; India; Sepoy Mutiny; Trade and Economic Growth.

bibliography

Chaudhuri, K. N. The Trading World of Asia and the English East India Company, 1660–1760. Cambridge, U.K., and New York, 1978.

Furber, Holden. Rival Empires of Trade in the Orient, 1600–1800. Minneapolis, Minn., 1976.

Keay, John. The Honourable Company: A History of the English East India Company. London, 1991.

Lawson, Philip. The East India Company: A History. London and New York, 1993.

Marshall, P. J. East Indian Fortunes: The British in Bengal in the Eighteenth Century. Oxford, U.K., 1976.

Sudipta Sen