East India Company
The East India Company was an English trading enterprise established in 1600 under a royal charter from Queen Elizabeth I, aimed at monopolizing the spice trade in Southeast Asia. However, it quickly shifted focus to India's lucrative textile industry, establishing factories and exporting textiles worldwide. By the mid-1700s, the company had gained significant power, playing a pivotal role in the political landscape of India, especially after defeating French rivals and asserting control over key regions like Bengal. This growing influence led to exploitation, including land seizures and heavy taxation on Indian farmers, contributing to famines. Concerns over the company's escalating power prompted the British government to intervene, leading to the Regulating Act of 1773 and the eventual dissolution of the company in 1874. The British then assumed direct control over India, marking the start of the British Raj, which lasted until India's independence in 1947. The legacy of the East India Company is complex, encompassing both economic development and profound social and political changes that impacted Indian society.
East India Company
The East India Company was an English merchant company officially created by a royal charter issued by Queen Elizabeth I in 1600. A group of London businessmen founded the company as a means of breaking into the spice trade of the East Indies, the island nations of Southeast Asia. Within only a few years, however, the merchants of the East India Company discovered that they stood to profit more from the textile trade in India, and they soon gave up their East Indies trade.
Into the 1700s, supported by the British government, the East India Company began to assert greater control over Indian life. In the mid-1700s, the company defeated rival French forces in India and essentially became the ruling power in India. Company leaders subjugated the Indian people by taking their land, charging them taxes, and exposing them to devastating famines, all while becoming wealthy from selling their textiles.
The British government eventually believed that the East India Company had become too powerful and stripped it of its political and economic power in India. The government subsequently assumed control of India, marking the beginning of the British Raj. The British Parliament dissolved the East India Company in 1874.
Background
Queen Elizabeth I of England formally created the East India Company on December 31, 1600. Her royal charter issued that day granted state backing to a band of London merchants who wanted to monopolize the spice trade in the East Indies. The support of the government meant the East India Company would not be fully financially liable to investors in the event of economic failure. It also granted the company the power of the military should trouble arise among its trade competitors in the East Indies.
The first few years of the 1600s were not particularly successful for the East India Company. The Dutch prevented the British from overtaking the East Indies spice trade, and most Southeast Asian traders were not even interested in trading their spices for English products; Indonesians, for example, found no use for English wool in the hot climate of their islands.
In the 1610s, therefore, the East India Company started focusing on what its leadership believed was an even more valuable Southeast Asian market, India. Unlike the islands of the East Indies, India was home to a thriving textile industry that the Portuguese and French had already been exploiting for years. Textiles are cloths or woven fabrics.
The British then petitioned Emperor Jahangir of India's Mughal Empire for the rights to establish textile factories in India. Jahangir granted this request, and the East India Company was soon shipping its Indian textiles around the world from its production centers in the cities of Calcutta, Bombay, and Madras (present-day Kolkata, Mumbai, and Chennai, respectively).
The textiles were in especially high demand in England, where people used these cheap, colorful, expertly woven fabrics for dresses and furniture. By the 1630s, the Indian textile business had proven so valuable to the East India Company that it nearly abandoned the East Indies spice trade altogether. In the early 1700s, the East India Company was making millions of pounds a year.
Impact
By the mid-1700s, the managers of the East India Company in London had determined that the continued success of their enterprise in India depended on their not interfering with their business model of the past nearly 150 years. This meant the East India Company would uphold its agreement with the Indian government to produce and sell India's textiles while not becoming involved in local Indian affairs. The company's merchants in India, however, began to change this in the 1750s.
The Mughal Empire had crumbled by this time, leaving numerous regional states to begin forming throughout India. On the coasts, where the British and French maintained their shipping centers, Indian leaders vied for rule of these states. The Indians requested the military aid of the more powerful Europeans, promising them financial rewards if they helped. The French and British quickly took sides, both to prop up their respective companies financially and to attempt to drive their competitors out of business. The East India Company eventually defeated its French opponents and their Indian allies in battle in the late 1750s, allowing a British ruler to be installed over the region of Bengal in eastern India.
The East India Company began replicating this practice in other Indian regions where it conducted business. Soon the British had raised British-Indian armies to defend their territories from political and business competitors. Company overseers established entire systems of government in which the Indians still performed most of the work in the textile industry but now had to pay British taxes on their land.
Meanwhile, the British government in London had begun to worry that the East India Company was becoming too powerful in India. In 1773, Parliament passed the Regulating Act to try to control the company's actions. The next few decades saw Parliament strip the East India Company of its political and economic authority in India while the British government itself moved in to replace it. In 1813, Parliament ended the company's monopoly of Indian trade. In 1834, the company became simply the administrative body of the British government in India. By this time, the British had begun implementing Western-style institutions in India, believing Indian laws, education systems, and religions were inferior to British ways and needed to be corrected.
The British crushed the 1857 Indian Mutiny and in 1858 formally took control of India from the East India Company. The British rule of India into the mid-twentieth century became known as the British Raj. The East India Company paid off its last dividends, or financial returns, to shareholders in 1873, and in 1874, it was formally dissolved by Parliament. The British granted India its independence in 1947.
Bibliography
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