NCERT Class 8 History From Trade to Territory

From Trade to Territory The Company Establishes Power

Aurangzeb was the last of the powerful Mughal rulers. He established control over a very large part of the territory that is now known as India. After his death in 1707, many Mughal governors (subadars) and big zamindars began asserting their authority and establishing regional kingdoms. As powerful regional kingdoms emerged in various parts of India, Delhi could no longer function as an effective centre. By the second half of the eighteenth century, however, a new power was emerging on the political horizon – the British. Did you know that the British originally came as a small trading company and were reluctant to acquire territories? How then did they come to be masters of a vast empire? In this chapter you will see how this came about.

East India Company Comes East

In 1600, the East India Company acquired a charter from the ruler of England, Queen Elizabeth I, granting it the sole right to trade with the East. This meant that no other trading group in England could compete with the East India Company. With this charter the Company could venture across the oceans, looking for new lands from which it could buy goods at a cheap price, and carry them back to Europe to sell at higher prices. The Company did not have to fear competition from other English trading companies. Mercantile trading companies in those days made profit primarily by excluding competition, so that they could buy cheap and sell dear. The royal charter, however, could not prevent other European powers from entering the Eastern markets. By the time the first English ships sailed down the west coast of Africa, round the Cape of Good Hope, and crossed the Indian Ocean, the Portuguese had already established their presence in the western coast of India, and had their base in Goa. In fact, it was Vasco da Gama, a Portuguese explorer, who had discovered this sea route to India in 1498. By the early seventeenth century, the Dutch too were exploring the possibilities of trade in the Indian Ocean. Soon the French traders arrived on the scene.

The problem was that all the companies were interested in buying the same things. The fine qualities of cotton and silk produced in India had a big market in Europe. Pepper, cloves, cardamom and cinnamon too were in great demand. Competition amongst the European companies inevitably pushed up the prices at which these goods could be purchased, and this reduced the profits that could be earned. The only way the trading companies could flourish was by eliminating rival competitors. The urge to secure markets therefore led to fierce battles between the trading companies. Through the seventeenth and eighteenth centuries they regularly sank each other’s ships, blockaded routes, and prevented rival ships from moving with supplies of Fig. 2 – Routes to India in the eighteenth centur Mercantile – A business enterprise that makes profit primarily through trade, buying goods cheap and selling them at higher prices goods. Trade was carried on with arms and trading posts were protected through fortification.

This effort to fortify settlements and carry on profitable trade also led to intense conflict with local rulers. The company therefore found it difficult to separate trade from politics. Let us see how this happened. East India Company begins trade in Bengal The first English factory was set up on the banks of the river Hugli in 1651. This was the base from which the Company’s traders, known at that time as “factors”, operated. The factory had a warehouse where goods for export were stored, and it had offices where Company officials sat. As trade expanded, the Company persuaded merchants and traders to come and settle near the factory. By 1696 it began building a fort around the settlement. Two years later it bribed Mughal officials into giving the Company zamindari rights over three villages. One of these was Kalikata, which later grew into the city of Calcutta or Kolkata as it is known today. It also persuaded the Mughal emperor Aurangzeb to issue a farman granting the Company the right to trade duty free.

How trade led to battles

Through the early eighteenth century the conflict between the Company and the nawabs of Bengal intensified. After the death of Aurangzeb, the Bengal nawabs asserted their power and autonomy, as other regional powers were doing at that time. Murshid Quli Khan was followed by Alivardi Khan and then Sirajuddaulah as the Nawab of Bengal. Each one of them was a strong ruler. They refused to grant the Company concessions, demanded large tributes for the Company’s right to trade, denied it any right to mint coins, and stopped it from extending its fortifications. Accusing the Company of deceit, they claimed that the Company was depriving the Bengal government of huge amounts of revenue and undermining the authority of the nawab. It was refusing to pay taxes, writing disrespectful letters, and trying to humiliate the nawab and his officials.

Let’s recall

1. After the British conquest of Bengal, Calcutta grew from a small village to a big city. Find out about the culture, architecture and the life of Europeans and Indians of the city during the colonial period.

2. Fill in the blanks:

(a) The British conquest of Bengal began with the Battle of ___________.

(b) Haidar Ali and Tipu Sultan were the rulers of ___________.

c) Dalhousie implemented the Doctrine of ___________.

(d) Maratha kingdoms were located mainly in the ___________ part of India.

3. State whether true or false:

(a) The Mughal empire became stronger in the eighteenth century.

(b) The English East India Company was the only European company that traded with India.

(c) Maharaja Ranjit Singh was the ruler of Punjab. 

(d) The British did not introduce administrative changes in the territories they conquered.

Let’s discuss

4. What attracted European trading companies to India?

5. What were the areas of conflict between the Bengal nawabs and the East India Company?

6. How did the assumption of Diwani benefit the East India Company?

7. Explain the system of “subsidiary alliance”.

8. In what way was the administration of the Company different from that of Indian rulers?

9. Describe the changes that occurred in the composition of the Company’s army.

Please refer to attached file for NCERT Class 8 History From Trade to Territory