Chapter 2 FROM TRADE TO TERRITORY

East India Company Comes East

In 1600, the East India Company received a royal charter from Queen Elizabeth I, granting it the sole right to trade with the East. This monopoly excluded other English trading companies. The Company aimed to procure goods like fine cotton, silk, pepper, cloves, cardamom, and cinnamon from India at low prices for higher profits in Europe. However, competition from other European powers like the Portuguese, Dutch, and French, who were also interested in Indian commodities, led to increased prices and reduced profits. This competition escalated into conflicts, with companies sinking each other's ships and blockading routes to secure markets and control trade.

How Trade Led To Battles

The desire to control trade and markets led to conflicts not only among European companies but also with local rulers. The East India Company, established its first factory in Bengal in 1651, expanding its operations and fortifying its settlements. The Company sought concessions, including duty-free trade rights granted by a Mughal farman. However, company officials also engaged in private trade, refusing to pay duties, which caused significant revenue loss to the Bengal government. This, along with demands for tributes, denial of coin minting rights, and attempts to humiliate the Nawab, intensified conflicts, eventually leading to confrontations like the Battle of Plassey.

The Battle Of Plassey

Following the death of Nawab Alivardi Khan in 1756, Sirajuddaulah became the Nawab of Bengal. The East India Company, seeking a puppet ruler, supported one of Sirajuddaulah's rivals. When negotiations failed, the Nawab captured Company officials and their warehouse. In response, Robert Clive led the Company's forces, reinforced by naval fleets, against Sirajuddaulah's army at Plassey in 1757. A crucial factor in the Nawab's defeat was the betrayal by Mir Jafar, one of his commanders, who had been promised the throne by Clive. This victory marked the East India Company's first major territorial conquest in India.

Company Officials Become “Nabobs”

After the Battle of Plassey, the Company officials gained significant power and wealth. Company servants began to emulate the lifestyle of nawabs, amassing fortunes through gifts and salaries. Robert Clive, for instance, accumulated vast wealth during his tenure. Those who returned to Britain with their riches were often called "nabobs," a term reflecting their perceived ostentatious lifestyle and social climbing, which was sometimes met with ridicule in British society. However, not all officials were successful, and many faced early deaths due to disease and war.

Company Rule Expands

From 1757 to 1857, the East India Company gradually expanded its territorial control using political, economic, and diplomatic strategies, rarely resorting to direct military conquest initially. They appointed Residents in Indian states to serve Company interests and interfere in internal affairs, influencing succession and administrative appointments. The "subsidiary alliance" policy forced Indian rulers to pay for Company troops, surrender territories if payments defaulted, and disband their own armies. The Company also engaged in direct military confrontations when its interests were threatened, as seen in the wars against Mysore rulers Haidar Ali and Tipu Sultan, and the Marathas.

Tipu Sultan – The “Tiger Of Mysore”

Mysore, under rulers like Haidar Ali and Tipu Sultan, had grown powerful and controlled profitable trade routes. Tipu Sultan restricted the export of certain goods and disallowed local merchants from trading with the Company. He also formed an alliance with the French and modernized his army. The British viewed him as a threat and fought four wars against Mysore, eventually defeating and killing Tipu Sultan in 1799, imposing a subsidiary alliance on the state.

War With The Marathas

From the late 18th century, the Company sought to curb Maratha power. After their defeat in the Third Battle of Panipat (1761), the Marathas fragmented into several states. Under the Peshwas, they developed a strong military organization. The Company fought several wars against the Marathas, gradually expanding its control and ultimately crushing Maratha power by 1819.

The Claim To Paramountcy

In the early 19th century, under Lord Hastings, the Company adopted a policy of "paramountcy," asserting its supreme authority over Indian states. This justified annexing or threatening to annex any Indian kingdom deemed a threat to Company interests. This policy led to resistance, such as that by Rani Channamma of Kitoor, who fought against British annexation attempts.

The Doctrine Of Lapse

Lord Dalhousie introduced the "Doctrine of Lapse" in the mid-19th century. This policy stipulated that if an Indian ruler died without a male heir, their kingdom would be annexed by the Company. Several states, including Satara, Sambalpur, and Jhansi, were annexed under this doctrine. The annexation of Awadh in 1856, justified by the claim of "misgovernment," further fueled resistance, contributing to the Revolt of 1857.

Setting Up A New Administration

Warren Hastings, Governor-General from 1773 to 1785, played a key role in expanding Company power in Bengal, Bombay, and Madras. The British administration organized territories into Presidencies, each headed by a Governor, with the Governor-General as the supreme head. A new system of justice was introduced in 1772, establishing civil (diwani) and criminal (faujdari) courts in each district. European district collectors presided over civil courts, assisted by Indian legal experts (Maulvis and Hindu pandits) for interpreting local laws. A Supreme Court was established in 1773, along with a Sadar Nizamat Adalat (court of appeal) in Calcutta. The Collector became the key figure in the district, responsible for revenue collection and maintaining law and order.

The Company Army

The Mughal army relied heavily on cavalry and paid foot soldiers, with less emphasis on professional training. The East India Company, however, adopted a new approach by recruiting and training soldiers, known as sepoys, in European-style military discipline. As warfare evolved with advancements in firearms like muskets and matchlocks, the Company's infantry regiments became more important. This professionalization of the army aimed to create a disciplined force, but it sometimes clashed with soldiers' caste and community sentiments, which would later contribute to revolts like the one in 1857.

Conclusion

Through a combination of military conquest, political maneuvering, economic exploitation, and administrative reforms, the East India Company transformed from a trading entity into a territorial colonial power. Technological advancements, such as steamships, facilitated the expansion and consolidation of British rule in India. By 1857, the Company directly or indirectly controlled almost the entire Indian subcontinent, marking a significant shift in the political landscape.

Exercises

The chapter's exercises encourage critical thinking about the East India Company's rise to power. They involve matching historical figures and events, filling in blanks related to key battles and rulers, and stating the truthfulness of historical claims. Discussion questions prompt analysis of the attractions of Indian trade for European companies, conflicts between the Company and Bengal nawabs, the benefits of the Diwani, the workings of the subsidiary alliance, differences in administration between the Company and Indian rulers, and changes in the Company's army composition. Activities include imagining oneself as a colonial official or a nawab's nephew facing British policies, and identifying territorial changes on maps.