Advent of the Europeans

in India, Part 1
History is a continuity; it’s not easy to distinguish
clearly when one period ends and another begins.

by Tarun Goyal
THE PORTUGUESE

3
The Quest for and Discovery of a Sea Route to India
After the decline of the Roman Empire in the seventh century, the
Arabs had established their domination in Egypt and Persia.
Direct contact between the Europeans and India declined and, with
that, the easy accessibility to the Indian commodities like spices,
calicoes, silk, and various precious stones that were greatly in
demand was affected.
In 1453, Constantinople fell to the Ottoman Turks, who were on the
ascendant. Merchandise from India went to the European markets
through Arab Muslim intermediaries.
The Red Sea trade route was a state monopoly from which Islamic
rulers earned tremendous revenues. The land routes to India were 4
also controlled by the Arabs. In the circumstances, the Europeans
were keen to find a direct sea route to India.
15th-century Europe was gripped by spirit of Renaissance with its call
for exploration. At the same time, Europe made great advances in the
art of ship-building and navigation. Hence, there was eagerness all over
Europe for adventurous sea voyages to reach unknown corners of East.
The economic development of many regions of Europe was also
progressing rapidly with expansion of land under cultivation, the
introduction of an improved plough, scientific crop management such
as crop rotation, and increased supply of meat (which called for spices
for cooking as well as preservation).
Prosperity also grew and with it the demand for oriental luxury goods
also increased.
The north Europeans were ready to aid Portugal and Spain with
money and men, and were ready to provide ships and technical
knowledge.
It is also to be noted that Portugal had assumed the leadership in 5
Christendom’s resistance to Islam even as it had taken on itself the
spirit of exploration that had characterized the Genoese.
Historians have observed that the idea of finding an ocean route to India had
become an obsession for Prince Henry of Portugal, who was nicknamed the
‘Navigator’; also, he was keen to find a way to circumvent the Muslim domination
of the eastern Mediterranean and all the routes that connected India to Europe.
Pope Nicholas V gave Prince Henry a bull (a papal charter) in 1454, conferring on
him the right to navigate the “sea to distant shores of the Orient”, more specifically
“as far as India” in an attempt to fight Islamic influence and spread the Christian
faith. However, Prince Henry died (1460) before his dream became a reality.
In 1497, under the Treaty of Tordesillas (1494), the rulers of Portugal and Spain
divided the non-Christian world between them by an imaginary line in the Atlantic,
some 1,300 miles west of the Cape Verde Islands.
Under the treaty, Portugal could claim and occupy everything to the east of the line
while Spain could claim everything to the west. The situation was thus prepared for
the Portuguese incursions into the waters around India.
It was in 1487 that the Portuguese navigator, Bartholomew Dias, rounded the
Cape of Good Hope in Africa and sailed up the eastern coast; he was well
convinced that the long sought after sea route to India had been found. 6
But it was only 10 years later that an expedition of Portuguese ships headed out to
India (in 1497) & arrived in India in slightly less than 11 months’ time, in May 1498.
7
FROM TRADING TO RULING
Vasco Da Gama
The arrival of three ships under Vasco Da Gama, led by a Arab
pilot named Ahmad bin Majid, or a Gujarati pilot Kanji Malam at
Calicut in May 1498 profoundly affected the course of Indian
history.
The Hindu ruler of Calicut, the Zamorin (Samuthiri), however,
had no apprehensions as to the European’s intentions. As the
prosperity of his kingdom was due to Calicut’s position as an
entrepôt (where goods are brought for import and export, and for collection
and distribution), he accorded a friendly reception to Vasco.

The Arab traders, who had a good business on the Malabar

coast were apprehensive and were not keen on the Portuguese 8

getting a hold there.

For centuries, the trading system in the Indian Ocean had had numerous
participants — Indians, Arabs, Africans from the east coast, Chinese,
Javanese, among others — but these participants had acted according to
some tacit rules of conduct and none had sought overwhelming dominance
though all were in it for profit.
The Portuguese changed that : they wanted to monopolise the hugely
profitable eastern trade by excluding competitors, esp. the Arabs.
Vasco Da Gama stayed in India for three months. When he returned to
Portugal, he carried back with him a rich cargo and sold the merchandise in
the European market at a huge profit.
The importance of direct access to the pepper trade was made clear by the
fact that elsewhere the Europeans, who had to buy through Muslim
middlemen, would have had to spend ten times as much for the same
amount of pepper. 9
Not surprisingly, other profit-seeking merchants of European nations were
tempted to come to India and trade directly.
Two years after Vasco’s discovery, another
Portuguese expedition came in 1500 under Pedro
Álvares Cabral.
He had discovered Brazil on the way.
He was able to make some fruitful treaties with the
rulers of Kozhikode and Cannanore (present Kannur) Malabar Coast (c. 1500)
and established first Portuguese factory at Calicut.
However, he had to fight with the Arabs in the efforts of
creating a niche for Portuguese.
During these fights, he captured some of the vessels
of the Arabs and killed their crew.
Arabs retaliated by burning down the factory & killing
several Portuguese. This is called Battle of Calicut.
10
In 1501, Cabral had to go back to Portugal, defeated
and humiliated.
Vasco da Gama once again came to India in 1502.
The Zamorin declined to exclude the Arab merchants
in favour of the Portuguese when Vasco Da Gama
combined commercial greed with ferocious hostility
and wreaked vengeance on Arab shipping wherever
he could.
His rupture with the Zamorin thus became total and
complete. Vasco da Gama set up a trading factory at
Cannanore.
Gradually, Calicut, Cannanore and Cochin became
the important trade centres of the Portuguese.
Under the pretext of protecting the factories and their
trading activities, the Portuguese got permission to 11
fortify these centres.
The landing of Vasco da Gama at Calicut in 1498 ... is generally
regarded as the beginning of a new era in world history,
especially in the relationship between Asia and Europe.
For the Portuguese, the opening of a new sea-route to India
would give a big blow to the Muslims, the Arabs and Turks, who
were posing a new threat to Europe by virtue of the growing
military and naval power of the Turks.
A direct sea-link with India would displace the virtual monopoly
of the Arabs and Turks over the trade in eastern goods,
especially spices. They also vaguely hoped by their exploration
of Africa they would be able to be in a position to attack the
Muslims from two sides.
12
Thus, the commercial and religious objectives supported and
justified each other. — Satish Chandra
Francisco De Almeida
In 1505, the King of Portugal appointed Almeida a Governor in
India for a three-year term and equipped the incumbent with
sufficient force to protect the Portuguese interests.
Almeida was asked to consolidate the position of the
Portuguese in India and to destroy Muslim trade by seizing
Aden, Ormuz and Malacca.
He was also advised to build fortresses at Anjadiva (near Goa),
Cochin, Cannanore and Kilwa (East Africa).
What Almeida, however, encountered along with the opposition
of the Zamorin, was a threat from the Mameluke Sultan of
Egypt.
Encouraged by the merchants of Venice whose lucrative
commerce was now at risk due to the Portuguese interference, 13
the Egyptians raised a fleet in the Red Sea to stop the advance
of the Portuguese.
In 1507, the Portuguese squadron was defeated in a naval
battle off Diu by the combined Egyptian and Gujarat navies,
and Almeida’s son was killed.
Next year, Almeida avenged his defeat by totally crushing the
two navies. Almeida’s vision was to make the Portuguese the
master of the Indian Ocean.
His policy was known as the Blue Water Policy (Cartaze
system). It meant that the Portuguese were to be powerful at
the sea instead of building fortresses on Indian land.
As long as you may be powerful at sea you will hold India as
yours; and if you do not possess this power, little will avail
you a fortress on shore. — Francisco De Almeida 14
Alfonso de Albuquerque
Albuquerque, who succeeded Almeida as the Portuguese governor in
India, was the real founder of Portuguese power in the East, a task he
completed before his death. He secured for Portugal the strategic
control of the Indian Ocean by establishing bases overlooking all the
entrances to the sea.
There were Portuguese strongholds in East Africa, off the Red Sea, at
Ormuz; in Malabar; and at Malacca.
The Portuguese, under Albuquerque bolstered their stranglehold by
introducing a permit system for other ships and exercising control over
the major ship-building centres in the region. The non-availability of
timber in the Gulf and Red Sea regions for ship-building also helped the
Portuguese in their objectives.
He acquired Goa from the Sultan of Bijapur in 1510 with ease; the
principal port of the Sultan of Bijapur became “the first bit of Indian 15
territory to be under Europeans since the time of Alexander the Great”.
An interesting feature of his rule was the abolition of sati.
The Portuguese men who had come on the voyages and stayed back in
India were, from Albuquerque’s day, encouraged to take local wives.
They established themselves as village landlords, often building new
roads and irrigation works, introducing new crops like tobacco and
cashew, or better plantation varieties of coconut besides planting large
groves of coconut to meet the need for coir rigging and cordage.
In the cities, such as Goa and Cochin, they settled as artisans and
master-craftsmen, besides being traders. Most of such Portuguese
came to look upon their new settlements, rather than Portugal, as home.
View
Bitter persecution of Muslims was one serious drawback of Albuquerque’s
policy. This could have been due to his resolve to further the interests of his
countrymen by complete extinction of Muslim commercial interests in East.
During his rule, Albuquerque did his best to strengthen the fortifications of
Goa and enhance its commercial importance. In order to secure a 16
permanent Portuguese population in India, he encouraged his men to take
Indian wives. –The Gazetteer of India, Vol. II
Nino da Cunha
Nino da Cunha assumed office of the governor of Portuguese interests in
India in November 1529 and almost one year later shifted the
headquarters of the Portuguese government in India from Cochin to Goa.
Bahadur Shah of Gujarat, during his conflict with the Mughal emperor
Humayun, secured help from the Portuguese by ceding to them in 1534
the island of Bassein (modern Vasai) with its dependencies and
revenues. He also promised them a base in Diu.
However, Bahadur Shah’s relations with the Portuguese became sour
when Humayun withdrew from Gujarat in 1536. Since the inhabitants of
the town started fighting with the Portuguese, Bahadur Shah wanted to
raise a wall of partition. Opposing this, the Portuguese started
negotiations, in the course of which the ruler of Gujarat was invited to a
Portuguese ship and killed in 1537.
Da Cunha also attempted to increase Portuguese influence in Bengal by
17
settling many Portuguese nationals there with Hooghly as their
headquarters.
Favourable Conditions for Portuguese
In India, except Gujarat, ruled by the powerful Mahmud
Begada (1458-1511), the northern part was much
divided among many small powers.
In the Deccan, the Bahmani Kingdom was breaking up
into smaller kingdoms. None of the powers had a navy
worth its name, nor did they think of developing their
naval strength.
As regards the Arab merchants and ship-owners who
until then dominated the Indian Ocean trade, they had
nothing to match the organisation and unity of the
Portuguese. Moreover, the Portuguese had cannons
18
placed on their ships.
Portuguese State
The general tendency is to underestimate the Portuguese hold in
India. However, the Estado Português da India (State of the
Portuguese India) was in fact a larger element in Indian history than
it is given credit for.
Many of the coastal parts of India had come under Portuguese
power within fifty years of Vasco da Gama’s arrival. The
Portuguese had occupied some sixty miles of coast around Goa.
On the west coast from Mumbai to Daman and Diu to the
approaches to Gujarat, they controlled a narrow tract with four
important ports and hundreds of towns and villages.
In the south, they had under them a chain of seaport fortresses and
trading-posts like Mangalore, Cannanore, Cochin and Calicut. And
though their power in Malabar was not consolidated, it was enough 19
to ensure influence or control over the local rulers who held the
spice growing land.
The Portuguese established further military posts and settlements
on the east coast at San Thome (in Chennai) and Nagapatnam (in
Andhra). Towards the end of the sixteenth century, a wealthy
settlement had grown at Hooghly in West Bengal.
Envoys and ambassadors were exchanged between Goa and
many of the major kingdoms in India of the time. Treaties were
signed between Goa and the Deccan sultans in 1570 which were
regularly renewed as long as their kingdoms lasted.
The Portuguese always had a role to play in the successive
battles for the balance of power between Vijayanagar and the
Deccan sultans, between the Deccanis and the Mughals, and
between the Mughals and the Marathas.
Interestingly, the Portuguese, the first Europeans to come to India,
were also the last to leave this land. It was 1961 before the 20
Government of India recaptured Goa, Daman and Diu from them.
Portuguese Administration in India
The head of the administration was the Viceroy
who served for three years, with his Secretary
and, in later years, a Council.
Next in importance came the Vedor da
Fazenda, responsible for revenues and the
cargoes and dispatch of fleets. The fortresses,
from Africa to China, were under Captains,
assisted by ‘factors’, whose power was
increased by the difficulties of communication
and was too often used for personal ends. 21
Religious Policy of the Portuguese
The Moors were the bitter enemies of the Portuguese in North Africa. So
were the Arabs. Arriving in the East, the Portuguese brought with them the
same zeal to promote Christianity and the wish to persecute all Muslims.
Intolerant towards the Muslims, the Portuguese were initially quite tolerant
towards the Hindus. However, over time, there was a change and Hindus
were also persecuted.
But, in spite of this intolerant behaviour, the Jesuits (members of Society of
Jesus; founded by Ignatius of Loyola and six companions with the approval of Pope Paul III in
1540)made a good impression at Akbar’s court, mainly due to his interest in
questions of theology. In Sept 1579, Akbar forwarded a letter to the
authorities at Goa requesting them to send two learned priests.
The Church authorities in Goa eagerly accepted the invitation, seeing in it
a chance to convert the emperor to Christianity, and with him his court and 22
the people. Jesuit fathers, Rodolfo Aquaviva and Antonio Monserrate were
selected for the purpose and sent to Fatehpur Sikri in 1580.
Aquaviva and Monserrate went back in 1583, belying the hopes the Portuguese
entertained of Akbar’s conversion to the Christian faith. The second mission called
by Akbar in 1590 also ended on a similar note in 1592. The third mission, again
invited by Akbar, arrived in 1595 at Lahore (where the court was then residing) and
continued as a sort of permanent institution, thereby extending its influence on
secular politics.
Fathers Jerome Xavier and Emanuel Pinheiro were the leaders of the mission, and
their letters from the court became very widely known for the information they
provided on the latter part of Akbar’s reign.
Prince Salim, on ascending the throne as Jahangir, satisfied the Muslims by
neglecting the Jesuit fathers.
Gradually, however, his temporary estrangement from the Jesuits ended, and in
1606 he again renewed his favours to them. The elegant and spacious church at
Lahore was allowed to be retained by them along with the collegium or the priests’
residence. In 1608, twenty baptisms were carried out in Agra, the priests publicly
acting with as much liberty as in Portugal.
Jahangir’s conduct was such that the Jesuit priests became hopeful of bringing him
within the Christian fold. 23

However, these hopes were belied. Moreover, arrogant actions on the part of the
Portuguese Viceroys created a rift with the Mughal emperor.
Portuguese Lose Favour with the Mughals
In 1608, Captain William Hawkins (in his ship Hector)
reached Surat. He brought with him a letter from James I,
King of England, to the Mughal court of Jahangir
requesting permission to do business in India.
Father Pinheiro and the Portuguese authorities did their
best to prevent Hawkins from reaching the Mughal court,
but did not succeed. Jahangir accepted the gifts Hawkins
brought for him and gave Hawkins a very favourable
reception in 1609.
As Hawkins knew the Turk language well, he conversed
with the emperor in that language without the aid of an
interpreter. Pleased with Hawkins, Jahangir appointed him
24
as a mansabdar of 400 at a salary of Rs. 30,000
(apparently, he never received it).
Jahangir called him “English Khan”. This English Khan was able
to persuade the emperor to grant a commission for an English
factory at Surat but under the pressure of the Portuguese
Viceroy, the grant was withdrawn.
Hawkins lived in the court of Mughals till 1611, tried to reverse
the orders, but the Portuguese influence over the King was
impregnable. He returned in disgust on Nov 2, 1611.
Meanwhile, the Portuguese stopped the English ships from
entering the port of Surat.
The naval Battle of Swally Hole (between English and the
Portuguese fleets) took place in Nov 1612 off the coast of Suvali
(near Surat). It was won by the English.
This battle marked the beginning of the end of Portugal's
commercial monopoly over India, and the beginning of the ascent 25
of the English East India Company's presence in India.
This battle also convinced the English East India Company to establish
a small navy to safeguard their commercial interests from other
European powers and also from pirates.
This small beginning is regarded as the root of modern Indian navy.
Jahangir, who had no navy worth its name, learnt of the English
success and was greatly impressed.
The Portuguese acts of piracy also resulted in conflict with the imperial
Mughal government. In 1613, the Portuguese offended Jahangir by
capturing Mughal ships, imprisoning many Muslims, and plundering the
cargoes.
An enraged Jahangir ordered Muqarrab Khan, who was the then in-
charge of Surat, to obtain compensation. However, it was during the
reign of Shah Jahan, that the advantages which Portuguese enjoyed in
the Mughal court were lost forever. Also lost were the hopes of
converting the royal family and Mughal India to Christianity, a hope that 26
the Portuguese held because of the welcome accorded to them and
their religion by Akbar and Jahangir.
Capture of Hooghly
On the basis of an imperial farman in 1579, the Portuguese had
settled down on a river bank which was a short distance from
Satgaon (now Saptagram) in Bengal to carry on their trading activities.
Over the years, they strengthened their position by constructing big
buildings which led to the migration of the trade from Satgaon to the
new port known as Hooghly.
They monopolized the manufacture of salt, built a custom house of
their own and started enforcing strictly the levy of duty on tobacco,
which had become an important article of trade since its introduction
at the beginning of the 17th century.
The Portuguese not only made money as traders but also started a
cruel slave trade by purchasing or seizing Hindu and Muslim
children, whom they brought up as Christians. 27
On June 24, 1632, the siege of Hooghly began, ending in its capture
three months later.
Decline of the Portuguese
By the 18th century, the Portuguese in India lost their
commercial influence, though some of them still
carried on trade in their individual capacity and many
took to piracy and robbery. In fact, Hooghly was used
by some Portuguese as a base for piracy in the Bay of
Bengal.
The decline of the Portuguese was brought about by
several factors. The local advantages gained by the
Portuguese in India were reduced with the emergence
of powerful dynasties in North India and the rise of the
turbulent Marathas as their immediate neighbours
(Marathas captured Salsette and Bassein in 1739 28
from the Portuguese).
The religious policies of the Portuguese, such as the activities of the
Jesuits, gave rise to political fears. Their antagonism for the Muslims
apart, the Portuguese policy of conversion to Christianity made
Hindus also resentful.
Their dishonest trade practices also evoked a strong reaction. The
Portuguese earned notoriety as sea pirates.
Their arrogance and violence brought them the animosity of the rulers
of small states and the imperial Mughals as well. The discovery of
Brazil diverted colonising activities of Portugal to the West.
The earlier monopoly of knowledge of the sea route to India held by
the Portuguese could not remain a secret forever; soon enough the
Dutch and the English, who were learning the skills of ocean
navigation, also learnt of it.
As new trading communities from Europe arrived in India, there
29
began a fierce rivalry among them. In this struggle, the Portuguese
had to give way to the more powerful and enterprising competitors.
One by one, the Portuguese possessions fell to its opponents.
Goa, which remained with the Portuguese, had lost its importance as a
port after the fall of the Vijayanagar empire and soon it did not matter in
whose possession it was.
The spice trade came under the control of the Dutch, and Goa was
superseded by Brazil as the economic centre of the overseas empire of
Portugal.
By 1663, the Dutch won all Portuguese forts on the Malabar coast to
basically oust the Portuguese from India.
The Portuguese entered India with the sword in one hand and the crucifix
in the other; finding much gold, they laid aside the crucifix to fill their
pockets, and not being able to hold them up with one hand, they were
grown so heavy, they dropped the sword, too; being found in this posture 30
by those who came after, they were easily overcome — Alfonso de
Souza, the Portuguese Governor in India (1542-45)
Significance of the Portuguese
Most historians have observed that the coming of the
Portuguese not only initiated what might be called the
European era, it marked the emergence of naval power.
The Cholas, among others, had been a naval power, but it was
now for the first time a foreign power had come to India by way
of the sea.
The Portuguese ships carried cannon, and this was the first
step in gaining monopoly over trade—with the threat or actual
use of force. The Portuguese declared their intention to abide
by no rules except their own, and they were intent on getting a
decisive advantage over the Indians and over the Indian Ocean
trading system.
In the Malabar of the sixteenth century, the Portuguese showed 31
military innovation in their use of body armour, matchlock men,
and guns landed from the ships.
THE DUTCH

32
Commercial enterprise led the Dutch to undertake voyages to the East.
Cornelis de Houtman was the first Dutchman to reach Sumatra and
Bantam in 1596.
The Dutch East India Company (Vereenigde Oostindische Compagnie or
VOC in Dutch) was established in 1602, as a chartered company to trade
with India and Indianized Southeast Asian countries when the Dutch
government granted it a 21-year monopoly on the Dutch spice trade.
The VOC was the earliest multinational/ transnational corporation in its
modern sense. In the early 1600s, by widely issuing bonds and shares of
stock to the general public, the VOC became the world's first formally listed
public company. In other words, it was the first corporation to be ever
actually listed on an official stock exchange (Amsterdam). It was influential
in the rise of corporate-led globalization in the early modern period.
It was the first company which was given power to engage itself in colonial 33
activities including waging a war and execute the convicts, mint the coins
and establish colonies. Its first permanent trading post was in Indonesia.
34
Dutch Settlements
They set-up their first factory at Masulipatnam in 1605. Their
other factories were at Pulicat, Chinsura, Patna, Balasore,
Nagapattanam, Cochin, Surat, Karikal, Kasimbazar,
Masulipatnam, Bharuch, Agra, Ahmedabad, Sadras, etc.
They established Fort Williams in Cochin after defeating
the Portuguese in 1663.
Their main centre in the starting was Pulicat (till 1690), then
Nagapattanam.
Participating in the redistributive or carrying trade, they
brought to the islands of the Far East various articles and
merchandise from India. They carried indigo (manufactured
in the Yamuna valley and Central India), textiles and silk
(from Bengal, Gujarat and the Coromandel), saltpetre (from 35
Bihar) and opium and rice (from the Ganga valley).
View
The Dutch rivalry with the English, during the
seventeenth century, was more bitter than that of the
Portuguese. The policy of the Dutch in the East was
influenced by two motives: one was to take revenge
on Catholic Spain, the foe of their independence, and
her ally Portugal, and the other was to colonise and
establish settlements in the East Indies with a view to
monopolising commerce in that region.
They gained their first object by the gradual decline of
Portuguese influence. The realisation of their second
object brought them into bitter competition with the
English. — R.C. Majumdar, H.C. Raychaudhuri and 36

K. Datta in An Advanced History of India

Anglo-Dutch Rivalry
The English were also at this time rising to prominence in the Eastern
trade, and this posed a serious challenge to the commercial interests of
the Dutch. Commercial rivalry soon turned into bloody warfare.
The climax of the enmity between the Dutch and the English in the East
was reached at Amboyna (a place in present-day Indonesia, which the
Dutch had captured from the Portuguese in 1605) where they massacred
ten Englishmen and nine Japanese in 1623.
This incident further intensified the rivalry between the two European
companies. After prolonged warfare, both the parties came to a
compromise in 1667 by which the British agreed to withdraw all their
claims on Indonesia, and the Dutch retired from India to concentrate
on their more profitable trade in Indonesia.
37
They monopolised the trade in black pepper & spices. The most important
Indian commodities Dutch traded in were silk, cotton, indigo, rice & opium.
Decline of the Dutch in India
The Dutch got drawn into the trade of the Malay Archipelago.
Further, in the third Anglo-Dutch War (1672-74),
communications between Surat and the new English settlement
of Bombay got cut due to which three homebound English
ships were captured in the Bay of Bengal by the Dutch forces.
The final retaliation by the English resulted in the defeat of the
Dutch, in the Battle of Hooghly (or Battle of Chinsura or Battle
of Biderra) (Nov 1759), which dealt a crushing blow to Dutch
ambitions in India.
The Dutch were not much interested in empire building in India;
their concerns were trade. In any case, their main commercial
38
interest lay in the Spice Islands of Indonesia from where they
earned a huge profit through business.
 THE
ENGLISH

39
Charter of Queen Elizabeth I
As the knowledge grew of the high profits earned by the
Portuguese in Eastern trade, English traders too wanted a share.
So in 1599, a group of English merchants calling themselves the
‘Merchant Adventurers’ formed a company. On Dec 31, 1600,
Queen Elizabeth I issued a charter with rights of exclusive trading
to the company named the ‘Governor and Company of Merchants
of London trading into the East Indies’.
Initially, a monopoly of 15 years was granted, which in May 1609
was extended indefinitely by a fresh charter. As the Dutch were
already concentrating more on the East Indies, the English turned
to India in search of textiles & other commodities of trade.
Wealthy merchants and aristocrats owned the EIC's shares.
40
Initially, the government owned no shares and had only indirect
control until 1657 when permanent joint stock was established.
During its first century of operation, the focus of the Company was
trade, not the building of an empire in India.
Its interests turned from trade to territory during the 18th century as
the Mughal Empire declined in power.
The battles of Plassey and Buxar left the company in control of Bengal and a
major part in North India.
In the following decades, it gradually increased the extent of the territories
under its control, controlling the majority of the Indian subcontinent either
directly or indirectly via local puppet rulers under the threat of force by
its Presidency armies, much of which were composed of native
Indian sepoys.
The Company rule in India effectively began in 1757 and lasted until 1858,
when, following the Revolt of 1857, the Government of India Act 1858 led to
the British Crown's assuming direct control of the Indian subcontinent.
It was dissolved in 1874 as a result of the East India Stock Dividend 41
Redemption Act passed one year earlier, as the Government of India
Act had by then rendered it vestigial, powerless, and obsolete.
 PROGRESS OF THE ENGLISH COMPANY
Foothold in West and South
Captain Hawkins arrived in the court of Jahangir in April 1609 itself.
But the mission to establish a factory at Surat didn’t succeed due to
opposition from the Portuguese, and Hawkins left Agra in Nov 1611.
In 1611, Captain Middleton obtained the permission of the Mughal
governor of Surat to trade there.
In 1611, the English had started trading at Masulipatnam on the
south-eastern coast of India and later established a factory there in
1616.
It was in 1612 that Captain Thomas Best defeated the Portuguese in
Battle of Swally Hole; an impressed Jahangir granted permission to 42

Co. in 1613 to establish a factory at Surat under Thomas Aldworth.

In 1615, Sir Thomas Roe came as an accredited ambassador of James-I
to the court of Jahangir, staying there till Feb 1619. Though he was
unsuccessful in concluding a commercial treaty with the Mughal emperor,
he was able to secure a number of privileges, including permission to set
up factories at Agra, Ahmedabad and Broach.
The English company did not have a smooth progress. It had to contend
with the Portuguese and the Dutch in the beginning.
But the changing situation helped them and turned things in their favour.
Bombay had been gifted to King Charles II by the King of Portugal as
dowry when Charles married the Portuguese princess Catherine in 1661.
Bombay was given over to the East India Company on an annual
payment of ten pounds only, in 1668.
Later, Bombay was made the headquarters by shifting the seat of the 43
Western Presidency from Surat to Bombay in 1687. So there was tacit
peace between the English and the Portuguese now.
There was also an Anglo-Dutch compromise (as mentioned
earlier) by which the Dutch agreed not to interfere with the English
Company’s trade in India. Thus, the English were rid of two arch-
rivals in India.
The English Company’s position was improved by the ‘Golden
Farman’ issued to them by the Sultan of Golconda in 1632. On a
payment of meagre amount a year, they earned the privilege of
trading freely in the ports of Golconda.
A member of the Masulipatnam council, the British merchant
Francis Day, in 1639 received from the ruler of Chandragiri
permission to build a fortified factory at Madras which later
became Fort St. George and replaced Masulipatnam as the
headquarters of the English settlements in South India.
Thereafter, the English extended their trading activities to the east 44
and started factories at Hariharpur in the Mahanadi delta and at
Balasore (in Odisha) in 1633.
Foothold in Bengal
Bengal was then a large and rich province in India, advanced in trade
and commerce. Commercial and political control over Bengal
naturally appeared an attractive proposition to the profit-seeking
English merchants. Bengal was also an important province of the
Mughal empire.
Shah Shuja, the subedar of Bengal in 1651, allowed the English to
trade in Bengal in return for an annual payment of Rs. 3,000, in lieu of
all duties.
Factories in Bengal were started at Hooghly (1651) and other places
like Kasimbazar, Patna and Rajmahal.
Nevertheless, despite the privileges of the farmans, the Company’s
business was now and then obstructed by customs officers in the
local check-posts who asked for payment of tolls.
45
In pursuance of its changed policy, Co. wanted to have a fortified
settlement at Hooghly so that force could be used if necessary.
William Hedges, the first agent and Governor of the Company in Bengal,
appealed to Shayista Khan, the Mughal governor of Bengal in August
1682, for redressal of the grievance. As nothing came out of the appeal,
hostilities broke out between the English and the Mughals.
Four years later, Hooghly was sacked by the imperial Mughals in Oct
1686. The English retaliated by capturing the imperial forts at Thana
(modern Garden Reach), raiding Hijli in east Midnapur and storming the
Mughal fortifications at Balasore. However, the English were forced to
leave Hooghly & were sent to an unhealthy location at the mouth of
Ganga.
After the Mughal raid on Hooghly, Job Charnock, a company agent, started
negotiations with the Mughals so as to return to a place called Sutanuti.
Charnock signed a treaty with Mughals and returned to Sutanuti in 1690.
Thus, an English factory was established on Feb 10, 1691, the day an 46
imperial farman was issued permitting the English to “continue contentedly
their trade in Bengal” on payment of Rs 3,000 a year in lieu of all dues.
47
A zamindar in Bardhaman district, Sobha Singh,
rebelled, subsequently giving the English the pretext
they were looking for, to fortify their settlement at
Sutanuti in 1696.
In 1698, the English succeeded in getting the
permission to buy the zamindari of the three villages
of Sutanuti, Gobindapur and Kalikata (Kalighat) from
their owners on payment of Rs. 1,200.
The fortified settlement was named Fort William in
the year 1700 when it also became the seat of the
Eastern Presidency (Calcutta) with Sir Charles Eyre
48
as its first President.
Farrukhsiyar’s Farmans (Magna Carta of the Company)
In 1717, an English mission led by John Surman to the court of the Mughal
emperor Farrukhsiyar secured three famous farmans, giving the Company many
valuable privileges in Bengal, Gujarat and Hyderabad. Important terms were—
 In Bengal, the Company’s imports and exports were exempted from customs
duties in lieu of annual payment of Rs 3,000 as settled earlier.
 The Company was permitted to issue dastaks (passes) for the transportation
of such goods. The Company servants were also permitted to trade but were not
covered by this farman. They were required to pay the same taxes as Indian
merchants.
 The Company was permitted to rent more lands around Calcutta.
 In Hyderabad, the Company retained its existing privilege of freedom from
duties in trade and had to pay the prevailing rent only for Madras.
 In Surat, for an annual payment of Rs. 10,000, the East India Company was
exempted from the levy of all duties. 49
 It was decreed that the coins of the Company minted at Bombay were to have
currency throughout the Mughal empire.
This farman was a perpetual source of conflict between the Company and
the Nawabs of Bengal. All the Nawabs of Bengal from Mushid Quli Khan to
Alivardi Khan, had objected to the English interpretation of this farman.
The company used to issue dastaks, authorising their agents to trade
customs-free within the province of Bengal. The Bengal nawabs had issued
parwanas to all their officials to honour the dastak when the Company
traders produced it to them on demand.
According to the farman, this right of free trade covered by the dastaks was
restricted to the company alone. This right was not to be exercised by the
company's private traders.
But in practice, the private traders of the company generally abused the free
trade right by selling dastaks at high price, not only to European private
traders but also to native merchants.
Consequently, the Bengal government was losing revenue on the one hand,
and the native merchants were losing their business due to unequal 50
competition with the company and private traders, on the other.
Formative Years of the East India Company
• 1600 : The East India Company was established.
• 1609 : William Hawkins arrived at Jahangir’s court.
• 1611 : Captain Middleton obtained the permission of the
Mughal governor of Surat to trade there.
• 1613 : A permanent factory of East India Company was
established at Surat.
• 1615 : Sir Thomas Roe, the ambassador of King James I,
arrived at Jahangir’s court. By 1618, the ambassador
succeeded in obtaining two farmans (one each from the
emperor and Prince Khurram) confirming free trade with
exemption from inland tolls.
• 1616 : The Company established its first factory in the south 51
in Masulipatnam.
• 1632 : The Company got the golden farman from the Sultan of
Golconda which ensured safety and prosperity of their trade.
• 1633 : The Company established its first factory in east India in
Hariharpur, Balasore (Odisha).
• 1639 : The Company got the lease of Madras from a local king.
• 1651 : The Company was given permission to trade at Hooghly
(Bengal).
• 1662 : The British King, Charles II, was given Bombay as dowry for
marrying a Portuguese princess (Catherine of Braganza).
• 1667 : Aurangzeb gave the English a farman for trade in Bengal.
• 1691 : The Company got the imperial order to continue their trade in
Bengal in lieu of payment of Rs 3,000 a year.
• 1717 : The Mughal emperor Farrukhsiyar issued a farman, called
52
Magna Carta of the Company, giving the Company a large number of
trade concessions.
Note : A rival company to the East India Co. was later formed which
deputed Sir William Norris as its ambassador to the court of
Aurangzeb (Jan 1701-April 1702) to gain trading privileges for itself.
The new company, however, proved a failure. Under pressure from
the Crown and the Parliament, the two companies were
amalgamated in 1708 under the title of ‘United Company of
Merchants of England Trading to the East Indies’.
This was the East India Company, which was to establish British
political power in India.

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