The British East India Company (EIC or EEIC), later the British East India Company, was founded in 1600 as a trading company. With a massive private army and the support of the British government, the EIC plundered the Indian subcontinent from 1757 until anarchy forced the government to intervene and retake the EIC`s possessions in 1858. The addition of Bombay (officially handed over to the EIC in 1668) took place because Charles II of England (r. 1660–1685) received it as a wedding gift when he married Catherine of Braganza (1638–1705), daughter of John IV of Portugal (r. 1640–1656). Charles, eager to create a powerful rival to Dutch interests in Asia, represented by the Dutch East India Company (VOC), gave the EIC the autonomy to conduct its affairs as it saw fit. The VOC had been founded two years after the EIC, but a much larger investment meant that it had a powerful naval fleet that had allowed it to take control of many valuable possessions of the Portuguese Empire. The VOC conquered the lucrative spice trade in Asia and its sources in Indonesia. The dominance of VOCs was so great that EICs instead turned their coveted gaze to India. Competition began in 1635 when Charles I granted Sir William Courteen a commercial licence allowing the rival Courteen Association to trade with the East wherever the EIC was not present. [35] In 1764-5, after the Battle of Buxar, the Mughal emperor Shah Alam II.dem granted EIC the right to collect land gains (dewani) in Bengal, Bihar and Orissa.
This was a big step forward and ensured that the company had enormous resources to develop and protect its traders, bases, armies and ships. The EIC had become the official imperial tool of the British Empire in India, and it was the level of coordination between the various EIC centres that set it apart from its Indian and European competitors. Men like Robert Clive (1725-1774) created an empire in the name of the EIC. Clive of India, as he was popularly called, rose from clerk to governor of Bengal, and his military prowess, demonstrated in victories such as the Battle of Plassey in June 1757 against the forces of the Nawab of Bengal, was surpassed by his administrative successes. Clive reduced corruption and tightened regulations, so that what had hitherto been a private business increasingly resembled the official control of the British government. Nevertheless, there were still allegations that EIC officials were enriching themselves at the expense of the interests of the British state – even Clive was suspected. EIC officials who retired to England and had an extravagant retreat with their wealth were contemptuously referred to as “Nababs,” a corruption of the Mughal title for a senior official, Nawab. Despite China`s ban on opium imports, reaffirmed by Emperor Jiaqing in 1799, the drug was smuggled from Bengal to China by smugglers and agencies such as Jardine, Matheson & Co., David Sassoon & Co. and Dent & Co., averaging 900 tons per year.
The proceeds of drug traffickers who landed their cargo on Lintin Island went to the company`s factory in Guangzhou, and by 1825 most of the money needed to buy tea in China came from the illegal opium trade. Although the Company became increasingly bold and ambitious in crushing resistant states, it became increasingly clear that the Company was incapable of governing the vastness of conquered territories. The Bengal famine of 1770, in which a third of the local population died, caused hardship in Britain. Military and administrative costs increased in the British-administered areas of Bengal due to the resulting uncontrollable decline in labour productivity. The East India Company was the first company to register the Chinese use of orange-flavored tea, which led to the development of Earl Grey tea. [75] The Dutch company argued that the profits should cover the costs of the war, which came from the trade that produced profit. [34] The EIC was heavily involved in the so-called “triangular trade”, where precious metals were exchanged for products made in India (especially fine textiles) and then resold for spices in the East Indies. The spices (especially pepper) were then shipped to London, where they made prices high enough to take advantage of the initial investment in metal.
Later in its history, the EIC made huge profits from its control of the salt trade, the tea trade, and opium sales to China.