Chapter 12-4: The British Take Over India

East India Company

British involvement in India during the 18th century can be divided into two phases, one ending and the other beginning at mid-century. In the first half of the century, the British were a trading presence at certain points along the coast; from the 1750s they began to wage war on land in eastern and south-eastern India and to reap the reward of successful warfare, which was the exercise of political power, notably over the rich province of Bengal. By the end of the century British rule had been consolidated over the first conquests and it was being extended up the Ganges valley to Delhi and over most of the peninsula of southern India. By then the British had established a military dominance that would enable them in the next fifty years to subdue all the remaining Indian states of any consequence, either conquering them or forcing their rulers to become subordinate allies.

At the beginning of the 18th century English commerce with India was nearly a hundred years old. It was transacted by the East India Company, which had been given a monopoly of all English trade to Asia by royal grant at its foundation in 1600. Through many vicissitudes, the Company had evolved into a commercial concern only matched in size by its Dutch rival. Some 3000 shareholders subscribed to a stock of £3 200 000; a further £6 million was borrowed on short-term bonds; twenty or thirty ships a year were sent to Asia and annual sales in London were worth up to £2 million. Twenty-four directors, elected annually by the shareholders ran the Company's operations from its headquarters in the City of London.

Towards the end of the 17th century India became the focal point of the Company's trade. Cotton cloth woven by Indian weavers was being imported into Britain in huge quantities to supply a worldwide demand for cheap, washable, lightweight fabrics for dresses and furnishings. The Company's main settlements, Bombay, Madras and Calcutta were established in the Indian provinces where cotton textiles for export were most readily available. These settlements had evolved from 'factories' or trading posts into major commercial towns under British jurisdiction, as Indian merchants and artisans moved in to do business with the Company and with the British inhabitants who lived there.