Chapter 2. From Trade to Territory : Establishment of Company Power

• Aurangzeb was last of powerful Mughal rulers. He established control over a very large part of territory that is now called 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 center. By second half of 18th century, however, a new power was emerging on political horizon – British. In this chapter, you will see how this came about.

East India Company Comes East
• East India Company received a charter from England’s ruler, Queen Elizabeth I, in 1600, granting it exclusive rights to trade with East. According to charter, Company might go across oceans in search of new locations where it could buy things at a lower cost and transport them back to Europe to sell at a greater cost.
• Portuguese established their presence before East India Company on India’s western coast, Goa as their base.
• Vasco da Gama, a Portuguese explorer, discovered sea route to India in 1498. Dutch began exploring potential of trade in Indian Ocean by early 17th century and French arrived soon after.
• All companies are interested in buying same things. fine qualities of cotton, silk, pepper, cloves, cardamom & cinnamon were in great demand. urge to secure markets led to fierce battles between trading companies. Trade was carried on with arms and trading posts were protected through fortification.

East India Company begins to trade in Bengal
• first English factory was established in 1651. It served as headquarters for Company’s dealers, called ‘factors.’ Goods for export were stored at factory’s warehouse.
• Company, by 1696, began building a fort around settlement. It got right to trade duty free, a farman [a royal order] from Mughal Emperor Aurangzeb, but private traders needed to pay duty. Company continuously tried to press for more concessions and manipulated existing privileges.

How trade lead to battles?
• Private traders didn’t pay their taxes, which caused Bengal to lose money. Company and Nawabs of Bengal fought even harder. Bengal Nawabs [Murshid Quli Khan, Alivardi Khan, and then Sirajuddaulah] wouldn’t give Company concessions, demanded large tributes for right to trade, wouldn’t let Company make coins, and wouldn’t let Company build up its defences. They said that company was stealing a lot of money from Bengal government and undermining power of Nawab. disagreements led to fights, which led to famous Battle of Plassey.

Battle of Plassey
• Alivardi Khan died in 1756 and Sirajuddaulah became Bengal’s Nawab. Company attempted to assist one of Sirajuddaulah’s opponents in his bid to become Nawab.
• When Sirajuddaulah learned of Company’s plan, he told them to stop interfering in their political matters, stop fortification and pay revenues. Company’s army was led by Robert Clive against Sirajuddaulah at Plassey in 1757.
• key cause for defeat was that Mir Jafar’s forces [one of commanders of Sirajuddaulah] never engaged in battle, because it was Company’s first important victory in India, Battle of Plassey became famous. Mir Jafar became nawab after battle, but company was still not willing to take over responsibility of administration.
• prime objective of Company was expansion of trade. If it can be done without conquest, through help of local rulers, then territories need not be taken over directly, but, very soon Company discovered that this was rather difficult. Company installed Mir Qasim as nawab after protest of Mir Jafar. Later, Mir Qasim complained and he got defeat by company in battle of Buxar in 1764. Mir Jafar was reinstalled by company.
• After death of Jafar, company thought to rule by itself.
• In 1765, Mughal emperor appointed Company as Diwan of provinces of Bengal. It allowed Company to use vast revenue resources of Bengal. From early 18th century, Company’s trade with India had expanded. Goods from India had to be brought with gold and silver imported from Britain.

Company officials become ‘nabobs’
• After Battle of Plassey, actual Nawabs of Bengal were forced to give land and vast sums of money as personal gifts to Company officials. Robert Clive himself amassed a fortune in India. He had come to Madras [now Chennai] from England in 1743 at age of
(18) When in 1767 he left India, his Indian fortune was worth £401,102. Interestingly, when he was appointed Governor of Bengal in 1764, he was asked to remove corruption in Company administration, but he was himself cross-examined in 1772 by British Parliament which was suspicious of his vast wealth. Although he was acquitted, he committed suicide in 1774.
• Many Company officers died young in India as a result of disease and war. Some of officials hailed from low-income families and their ambition was to make enough money in India to return to Britain and live well. Those who returned wealthy were called ‘Nabobs,’ which is an anglicised version of Indian word nawab.

Company Rule Expands
• Certain major characteristics arose when examining East India Company’s takeover of Indian territories from 1757 to 1857.
• A direct military strike on an unfamiliar country was rare for Company. Before annexing an Indian state, it utilised a number of political, economic & diplomatic strategies to expand its power. Company appointed Residents in Indian states after Battle of Buxar. They were political or commercial representatives whose job was to serve and promote Company’s interests.
• company started to meddle in business of Indian states and forced them to join a “subsidiary alliance.” term “subsidiary alliance” means that Indian rulers were not allowed to have their own army. They were supposed to be protected by Company, but they had to pay for “subsidiary forces” that Company was supposed to keep up to protect them. If Indian rulers didn’t pay, part of their land was taken away as a punishment.

War with Marathas
• Company, from late 18th century, was planning to destroy Maratha power. In Third Battle of Panipat in 1761, Marathas were defeated and their dream of ruling from Delhi was shattered. They were divided into many states under different chiefs [sardars] belonging to dynasties such as Sindhia, Holkar, Gaikwad & Bhonsle. These chiefs were held together under a Peshwa [Principal Minister] who became its effective military and administrative head based in Pune.
• Marathas were involved in numerous conflicts. There was no obvious victory in first war, which ended in 1782 with Treaty of Salbai. British won Orissa and areas in north of Yamuna river, including Agra and Delhi, in Second Anglo-Maratha War [1803-05], which was fought on several fronts. Finally, Third Anglo-Maratha War, which lasted from 1817 to 1819, shattered Maratha supremacy.

Tipu Sultan – The ‘Tiger of Mysore’
• Company resorted to direct military confrontation when it saw a threat to its political or economic interests. This can be illustrated with case of southern Indian State of Mysore.
• Mysore had grown in strength under leadership of powerful rulers like Haidar Ali [ruled from 1761 to 1782] and his famous son Tipu Sultan [ruled from 1782 to 1799].
• Mysore controlled profitable trade of Malabar coast where Company purchased pepper and cardamom. In 1785, Tipu Sultan stopped export of sandalwood, pepper & cardamom through ports of his kingdom and disallowed local merchants from trading with Company.
• British were furious. They saw Haidar and Tipu as ambitious, arrogant & dangerous – rulers who had to be controlled and crushed. Four wars were fought with Mysore [1767-69, 1780-84, 1790-92 & 1799]. Only in last – Battle of Seringapatam – did Company ultimately win victory. Tipu Sultan was killed defending his capital Seringapatam, Mysore was placed under former ruling dynasty of Wodeyars and a subsidiary alliance was imposed on state.

claim to paramountcy
• ‘Paramountcy’ [supreme authority] was a new policy initiated under Lord Hastings [Governor General from 1813 to 1823]. Company argued that it had more power than Indian states. East India Company became concerned about Russia in late 1830s. It was envisioned that Russia would spread over Asia and invade India from north-west. Between 1838 and 1842, Company fought a long war with Afghanistan and established indirect Company administration there. After two lengthy wars, Punjab was annexed in 1849.

Doctrine of Lapse
• final wave of annexations occurred under Lord Dalhousie who was Governor-General from 1848 to 1856. He devised a policy that came to be called Doctrine of Lapse.
• doctrine declared that if an Indian ruler died without a male heir, his kingdom would ‘lapse’, that is, become part of Company’s territory. One kingdom after another was annexed simply by applying this doctrine: Satara [1848], Sambalpur [1850], Udaipur [1852], Nagpur [1853] and Jhansi [1854].
• In 1856, Company took over Awadh. Enraged by humiliating way in which Nawab was deposed, people of Awadh joined great revolt that broke out in 1857.

Setting up a New Administration
• Warren Hastings [Governor-General from 1773 to 1785] played a significant role in expansion of Company power. During his time, Company had acquired power in Bengal, Bombay & Madras. British territories were broadly divided into administrative units known as Presidencies.
• Three Presidencies: Bengal, Madras & Bombay. Each was ruled by a Governor. From 1772, a new system of justice was established. According to new system, each district needed to have two courts – a Criminal Court [ faujdari adalat ] and a Civil Court [diwani adalat].
• Based on different schools of dharmashastra, Brahman pandits have varied interpretations of local laws. In 1775, eleven pandits were commissioned to create a compilation of Hindu rules in order to bring uniformity.
• By 1778, a system of Muslim laws had been prepared for European judges’ use. Regulating Act of 1773 established a new Supreme Court, as well as a court of appeal – Sadar Nizamat Adalat – in Calcutta. In an Indian district, Collector was most powerful authority.
• With support of judges, police officers and darogas, Collector was responsible for collecting money and taxes as well as maintaining law and order in his territory.

Company army
• In India, colonial rule brought some new ideas of administration and reform. Mughal army composed of cavalry [sawars: trained soldiers on horseback] and infantry, i.e., paidal [foot] soldiers.
• army of Mughal was dominated by cavalry. In 18th century, changes occurred when Mughal successor states like Awadh and Benaras started recruiting peasants into their armies and training them as professional soldiers.
• East India Company used a similar strategy, which was called sepoy army [from Indian word sipahi, meaning soldier]. British began to build a consistent military culture in early 19th century.
• Soldiers were exposed to European-style training, drill & discipline, which significantly restricted their lives.

• Thus, East India Company was transformed from a trading company to a territorial colonial power. arrival of new steam technology in early 19th century aided this process.
• By 1857, Company came to exercise direct rule over about 63 % of territory and 78 % of population of Indian subcontinent. Combined with its indirect influence on remaining territory and population of country, East India Company had virtually taken whole of India under its control.

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