History of India 1

HISTORY

Subject : History
(For under graduate student)

Paper No. : Paper - IV

History of Modern India

Topic No. & Title : Topic – 2

Expansion & Consolidation of
British Rule

Lecture No. & Title : Lecture - 1

The Foundation of The British
Empire

THE FOUNDATION OF THE BRITISH EMPIRE:

THE EIGHTEENTH CENTURY CONTEXT

The account of the rise and

consolidation of the British
empire in India between the
middle of the eighteenth
century and the early decades
of the nineteenth century
must begin with the story of how Britain‟s imperial career
in India was launched after the defeat of Siraj-ud-Daula
in the battle of Plassey, offering an easy victory to the
British without a serious military engagement.

Plassey however, has to be

seen in the larger context
of the rise of the English
East India Company as a
key actor in India‟s politics
and commerce, since the
early part of the
eighteenth century. In the course of the eighteenth
century, the English East India Company laid down the
foundation of the British Empire in India in its eastern
Indian commercial stronghold of Bengal. By the early
nineteenth century its „dominion in Bengal turned into a
dominion of India‟ with the gradual and systematic
elimination of eighteenth century Indian regional powers
in Mysore, Maharashtra, Awadh and the Punjab. Besides
the Mysore Sultanate and the Sikh state in the Punjab,
the Indian regional states included the successor states
of the Mughal Empire in Bengal, Hyderabad or Awadh

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which had been set up early in the eighteenth century by

Mughal imperial officials like Murshid Quli Khan, Chin
Quilich Khan and Sadaat Khan Burhan-ul-Mulk. By the
middle of the eighteenth century, the grand Mughal
Empire had virtually disappeared. In another fifty years
the British were on their way to replace it.

The Eighteenth Century Transition in India

In recent times this eighteenth

century transition has led to a
major controversy among
historians. If in the conventional
historiography ,the battle of
Plassey and the consequent rise
of the English East India
Company as a territorial power
was labelled as a revolution
turning the Indian world “upside
down” ,recent scholarship
represented by Christopher Bayly, to use the most
prominent example, shows how the establishment of
British rule by the turn of the eighteenth century had a
long gestation period as it had already started operating
as an important pressure group in the Indian political
system in the late Mughal regional courts of Bengal,
Hyderabad or Awadh, by cultivating close and intimate
relations with powerful groups of courtiers, bankers and
traders. The army that aided the Company to vanquish
the Indian powers was recruited from the Indian warrior
classes who had earlier served the Mughal Empire and its
successor states. On the other hand, the long-term
consequence of British rule had remained a major point
of debate among historians. There was a time when
historians believed that British rule brought modernity to
India by exposing tradition bound Indian society to the
impact of modern science and rationalism .The
nationalists, however, in an attempt to underline the
dislocations caused by the “colonial modernity” called
attention to the process through which foreign
domination by draining wealth from this country, and by
destroying its industries became responsible for mass
poverty.

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The English East India Company’s Commerce: The

Early Period

According to this view, the

establishment of the East
India Company‟s Empire,
with its early nucleus in
Bengal in the late
eighteenth century, had something to do with attempts
by the Company and its servants to establish their
commercial domination. It is a truism that the
commercial dynamic was the main foundation for
European imperialism in Asia. It was through the
extensive commercial networks which were formed since
the early eighteenth century that the Company
eventually succeeded in challenging the Nawabs of
Bengal and finally unseating them from their power.
During Mughal rule the English East India Company came
to trade in India on the strength of a royal charter,
renewable at twenty years intervals that entitled them to
trade as the sole official agency in England‟s trade with
India. This was the source of the Company‟s monopoly
right in Indian trade. Other European companies like the
French and the Dutch had been endowed with similar
rights by their governments. The officials of these
companies however were involved in internal and coastal
trade, described in eighteenth century documents as
their private trade, to earn huge private profits. The
commercial privileges that these private traders, who had
powerful collaborators among Indian trading classes as
well, were looking for ultimately entangled them in a
conflicting relationship with the Nawabs of Bengal. To
understand the process by which Bengal was emerging in
the eighteenth century as the principal seat of English
commerce in India we require to go back to the turn of
the seventeenth century.

The Changing Structure of the Company’s Trade in

India

By the time the English company

became the rulers of Bengal,
significant changes in the direction
of English commerce in India had
already taken place. For much of the early seventeenth

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century, English commercial activity in India was

concentrated in the country‟s western coastline, alike the
Dutch and the Portuguese before them. The English too
carved out a space for themselves within the complex
structure of intra-Asian trade from their base in Surat.
Bengal textiles of course featured in the list of their
purchases, but Masulipattanam was the furthest point in
the east on the Coromandel coast, that English ships
regularly visited. Political trouble at Masulipattanam at
1628 and the expulsion of the Portuguese from Hooghly
in southern Bengal a few years later drew them towards
Bengal. As they sailed upwards from Balasore on the
Orissa coast to Hooghly, the most important riverine
Mughal port in South Bengal, the English Company came
to acquire a major competitive advantage over their main
rival, the Dutch. In 1650 Shah Shuja, the then Subahdar
of Bengal allowed them exemption from customs and
transit duties on an annual lump sum payment of three
thousand rupees. There was, consequently a substantial
expansion of their trade in the region. The English private
traders, Company‟s officials or otherwise, took full
advantage of this privilege to consolidate their position in
the province‟s seaborne and inland trade. The growth of
English trade in Bengal however was briefly interrupted
by the Anglo-Mughal conflict in Hooghly in 1686, but
soon in 1690 normalcy was restored and the English
settlement at Calcutta was established.

The Rise of Calcutta

Calcutta‟s
development as
a port town,
accompanied by
a major increase
in the English
owned ships in the Calcutta port, was, to a large extent,
facilitated by a reorientation that the English Company
brought about in the overall direction of India‟s maritime
trade from the West Asian trading zone to the eastern
seas, against the backdrop of the political crisis in Mughal
India, Safavid Iran and Ottoman Turkey. Political
instability in Turkey, Iran and India in the early
eighteenth century was a disaster for India‟s West Asian

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trade based in Surat, with which much of Indian trading

activity all along the Indian coast line was linked. Even
the Indian merchants of Hooghly in Bengal had
maintained their connections with the Red sea – Persian
Gulf region through Surat based shipping. The Europeans
too operated within this framework, and sailed between
Europe and South East Asia by touching the many ports
of call on the western Indian coast line. By the middle of
the eighteenth century, this structure of Indian Ocean
trade had collapsed. The possibility of its revival however
was ruled out by a reorientation of India‟s external trade
towards China, with its final destination in Europe in the
course of the eighteenth century. Not unnaturally the
English moved away from Surat and turned Calcutta into
their principal seat of commerce. In another fifty years
the European world economic system, through the
agency of the English East India Company would turn the
richest Mughal Subah of Bengal into its prized
possession.
The Commercial Importance of the Company in the
early 18th century

Military victory at
Plassey in June 1757
certainly made it
possible; yet the
connections that the
company had forged
with the powerful local merchants became an important
resource in achieving their aspirations for Empire.
Already in the early part of the eighteenth century,
following the collapse of Mughal shipping at Hooghly and
the contraction of West Asian markets, the Indian
merchants in Bengal were turning their gaze away from
the West to the East. They opted for the British shipping
network based in Calcutta to convey their merchandise to
the Bay of Bengal ports, as English shipping was
redirected to wards China and South-east-Asia. Even
Bombay which replaced Surat in the second half of the
eighteenth century as the principal seat of English
commerce in western India, took the major trade of the
West coast towards China, with Surat, emerging as a

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11

collection point for raw cotton for shipment from Bombay

for China. But the English political triumph in Bengal
ultimately made the trade from Bombay far less
important than the booming trade from Calcutta in the
eastern seas. In fact, financing the China trade became
easier, once political control in Bengal gave the Company
the advantage of territorial revenue, a point to which we
will turn shortly. A portion of the Bengal revenue began
to be remitted by the company to their agents at Canton
to buy Chinese tea for the European markets. Bullion
from Bengal was initially the barter for Chinese tea and
silk, until opium emerged as a substitute in the latter half
of the eighteenth century. Alongside, English trade with
Malaya and Batavia (Indonesia) also gained some
importance, as Calcutta ships on their way to Canton
made stoppages to exchange Bengal‟s commodities for
pepper and tin destined for the Chinese markets. At the
close of the eighteenth century, English voyages in
South-east Asia were made easier by the decline of
Dutch shipping, undermining their ability to control the
sea lanes towards China, with the result that even
Batavia came to depend on English ships for its imports
from Bengal. Earlier in the 1750s the Dutch had retreated
from the Western Indian coast. Surat, although in a
declining state, passed under English control after its
occupation in 1759, followed by similar reversals for the
Dutch in Bengal and the Corommandel Coast.

The Company’s Privileges, Private Trade and Indian

Collaborators

It was in such circumstances that

the merchants of Bengal opted for
the English shipping and trading
network in Calcutta. The option
turned into dependence, as the English aided by political
power systematically imposed its domination on
Calcutta‟s eastern Indian hinterland, even before the
political revolution of the 1750s. Much of the English
success was indebted to the collaboration between
English private merchants and the Indian traders of the
hinterland. While the seafaring Muslim ship-owners of
Hooghly went into decline, the predominantly Hindu
merchants of the shore came to depend on the English

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13

network. Apart from superior speed and fire power of the

English ships, which ensured quick passage of
merchandise and better protection against piracy, the
privileged position of the English Company in Bengal re-
confirmed by the Farman of the Mughal emperor
Farrukhshiyar in 1717 drew the Indian merchants
towards them. Exemption from customs duties that the
Mughals granted to the English Company was grossly
abused by its officials for the benefit of their private
trade. Some of the Indian traders who became tied with
the English- such as the famous Punjabi Khatri Omichand
in Calcutta, were also beneficiaries of this abuse when
they employed Englishmen as their fronts to evade
taxation .Customs exemptions were sold by the
Company‟s servants by way
of assuming ownership of
Indian goods, pulling Indian
business to the English
stronghold in Calcutta. These
misused privilege enabled the English private traders to
undersell their competitors in the market for Bengal
goods around the Indian Ocean. An important factor in
the more intimate forging of ties between Calcutta and its
early eighteenth century hinterland, were the privileges
enjoyed by the English, which also told upon Indian
shipping even on the great river of Ganga which began to
be dominated by English boats much before Plassey. Of
course, once political power was achieved by the
Company in the latter half of the eighteenth century,
such controls deepened further, leaving behind their
casualties even among those local trading groups who
had been their collaborators for some time. Much has
recently been written about the importance of this
mercantile collaboration in the making of the British
empire; it is however often forgotten that in 1757 these
collaborators had a brilliant future behind them .Once
the British became the master in Bengal, they would
easily dispense with Indian collaboration by deliberately
rupturing the complex cobweb of inter dependent
relations that had defined the space of European traders
in the pre-colonial world. The Europeans couldn‟t make
do without a whole range of people including
intermediary traders, money changers or creditors, big or

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15

small; political power enabled them to outgrow this

dependence by turning these merchants into dependent
banyans or gomasthas.

The Problem of Investment

Against this backdrop of the changing commercial

scenario in the course of the eighteenth century, one
should locate the political intervention of the Company in
Bengal. The intervention in the 1750s was occasioned to
some extent by a problem that all the European
companies were facing in financing their trade in Asia.
Traditionally they were exchanging bullion for goods.
They brought precious metals, went to a shroff or a
moneychanger to convert these metals into a local
currency by offering a commission and bought goods
from markets. From the early eighteenth century the
European rulers considered this practice to be a drain on
the country‟s wealth especially at a time when incessant
wars in Europe warranted substantial storage of wealth
for purposes of military mobilization. It was felt that the
more a country was depleted of its bullion reserves,
greater were its vulnerabilities. This explains why the
English and the French looked eagerly to territorial
revenues. The political revolution in Bengal gave the
English this great advantage by making them the master
of Bengal revenue. In this regard, the French company,
their main competitor in the eighteenth century, had
shown them the way.

The Drive for Territorial Revenue and Political

Power: The English and the French

By the middle of the eighteenth century, the British and

the French, among European trading powers in India had
begun to assume a major political role. After the French
attack on the British settlement in Madras in 1746, both
the powers became involved in a series of local wars in
the Deccan and in South India by backing rival
contestants for the Nawabship of the Carnatic in what
became the northern districts of the British province of
Madras Presidency, and Hyderabad. The French
involvement in South Indian politics however was not a
sudden development triggered by European rivalries
alone. In the early 1740s, individual Frenchmen had

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17

begun to make contacts with the courtiers of the Nawab

of Carnatic in order to secure revenue farms, and once
the French had been able to establish their military
prowess by taking Madras, the contenders for the
rulership of the Carnatic and Hyderabad found in them a
useful ally. Invariably the French commanders like
Dupleix and Bussy were anxious to acquire revenue
rights. Muzaffar Jung who was installed on the throne of
Hyderabad granted substantial territorial concessions to
the French in the form of a jagir in the northern sarkars,
Masulipattanam and tracts around Pondicherry.

In the long run however, the French were unable to

pursue these objectives in a competition in which the
British were the winners. The succession contest in the
Carnatic was settled in favour of the English, when they
were able to place Mohammad Ali Walajah as the Nawab
of Carnatic by vanquishing Chanda Saheb, the French
protégé. In return, the English Company was given a
share in the land revenue of the Nawab‟s territory. Later
the Company‟s army also served the Nawab‟s territorial
ambitions for a price. The English private traders, in
addition, offered him the credit that he needed to pay off
his old debts to the Company and to fund his wars of
expansion. By the early 1760s the French challenge in
South India disappeared, as the British were on their way
to create their early dominion in Bengal. The same
pattern was repeated in Bengal during the critical period
between 1756 when the conflict
between the Company and Siraj-
ud-daula had begun to brew, and
1765 when the English Company
received revenue rights in the
Bengal Subah on the strength of
the transfer of Dewani. Like the
Nawab of Carnatic who for all
practical purposes became a British
satellite, the Bengal Nawabs after Mir Qasim‟s failed
resistance ruled under British protection. Roughly around
the same time Awadh too became a dependent ally of the
British in the wake of Shuja-ud-daula‟s failure to prop up
Mir Qasim in his war against the Company. Their defeat
in the battle of Buxar completed the process that had

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begun at Plassey, little less than a decade ago. Only in

western India the Marathas and the Sultanate of Mysore
were able to hold out against British expansion for some
time. By the end of the century Mysore fell, and soon
within a couple of decades the Marathas followed suit.

Trade and Empire in the Late Eighteenth Century

It seems therefore that from around the middle of the

eighteenth century internal problems in some of the
Indian states exposed them to covert and overt
aggression by European powers. The armies of the Indian
states at one level failed to resist the onslaught of the
Company‟s forces, a large component of which was
basically Indian. British military conquest was followed by
new British regimes which were different from what had
gone before. On the face of it, such changes amounted to
a kind of political revolution turning the Company into the
ruler of a vast empire based on more ruthless forms of
economic exploitation. Yet it is important to recognize
that conditions in India, to some extent, determined the
emergence of the British Empire. Rival groups of
courtiers in the Indian states were wooing the British for
their support and in return were willing to sell rights to
collect revenue. The outcome of this process was the
tight economic and political control that the English
Company was able to impose on different regions at
different points of time. Since in the early stage of the
Company‟s rule it did not try to change institutions of
government, the Company apparently behaved like
another successor state paying lip-service to Mughal
ideals and principles of governance. The appearance of
continuity however, concealed far deeper motives of
territorial conquest in order to enhance the economic
advantage for Britain. It is often suggested that the East
India Company‟s directors in London, always mindful
about their commercial profits, warned their local agents
in India against involvement in expensive political and
military adventures. The Indian empire was a creation of
Englishmen in India who needed political leverage to
pursue their private objective of profit. Besides the
financial inducements that Englishmen received from
fledgling Indian rulers, one important consequence of

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political control however, was the Company‟s domination

over India‟s inland trade. With time the British claimed
the right to act as a sovereign power, refusing to share it
with the Mughal Empire, unlike the Marathas who even in
their heyday owed formal allegiance to the Mughal
emperor. The structure of the early colonial state that
had begun to evolve in Bengal soon after the transfer of
Dewani by Emperor Shah Alam to the English Company
admitted the right of the British Crown and Parliament to
shape the modes of government in India. All this was set
in motion with the conquest of Bengal. Bengal was, to
use the celebrated phrase of historian Peter Marshall, „the
bridge head‟ for the future British Empire of India. We
need to take up the story of the British conquest of
Bengal later on another occasion.