Chapter 2 From Trade to Territory The Company Establishes Power Aurangzeb was the last of the powerful Mughal rulers. He established control over a very large part of the territory that is now known as India. After his death in 1707, many Mughal governors or subedars and big zamindars began asserting their authority and establishing regional kingdoms.
As powerful regional kingdoms emerged in various parts of India, Delhi could no longer function as an effective centre. By the second half of the 18th century, however, a new power was emerging on the political horizon, the British. Did you know?
that the British originally came as a small trading company and were reluctant to acquire territories? How then did they come to be masters of a vast empire? In this chapter, you will see how this came about. East India Company Comes East In the year 1600, the East India Company acquired a charter from the ruler of England, Queen Elizabeth I granting it the sole right to trade with the East.
This meant that no other trading group in England could compete with the East India Company. With this charter, the company could venture across the oceans looking for new lands from which it could buy goods at a cheap price and carry them back to Europe to sell at higher prices. The company did not have to fear competition from other English trading companies. Mercantile trading companies in those days made profit primarily by excluding competition so that they could buy cheap and sell dear.
Mercantile means a business enterprise that makes profit primarily through trade, buying goods cheap and selling them at higher prices. The Royal Charter, however, could not prevent other European powers from entering the eastern markets. By the time the first English ships sailed down the west coast of Africa, round the Cape of Good Hope and crossed the Indian Ocean, the Portuguese had already established their presence in the western coast of India and had their base in Goa.
In fact, it was Vasco da Gama. a Portuguese explorer who had discovered the sea route to India in 1498. By the early 17th century, the Dutch too were exploring the possibilities of trade in the Indian Ocean. Soon, the French traders arrived on the scene. The problem was that all the companies were interested in buying the same thing, the fine quality of cotton, and silk produced in India had a big market in Europe.
Pepper, cloves, cardamom and cinnamon too were in great demand. Competition amongst the European companies inevitably pushed up the prices at which these goods could be purchased and this reduced the profits that could be earned. The only way the trading companies could flourish was by eliminating rival competitors. The urge to secure markets therefore led to fierce battles between the trading companies.
Through the 17th and 18th centuries, they regularly sank each other's ships, blockaded routes and prevented rival ships from moving with supplies of goods. Trade was carried on with arms and trading posts were protected. through fortification. This effort to fortify settlements and carry on profitable trade also led to intense conflict with local rulers. The company, therefore, found it difficult to separate trade from politics.
Let us see how this happened. East India Company begins trade in Bengal. The first English factory was set up on the banks of the river Hukli.
in 1651. This was the base from which the company's traders, known at that time as factors, operated. The factory had a warehouse where goods for export were stored. and it had offices where company officials sat.
As trade expanded, the company persuaded merchants and traders to come and settle near the factory. By 1696, it began building a fort around the settlement. Two years later, it bribed Mughal officials into giving the company zamindari rights over three villages.
One of these was Calicutta, which later grew into the city of Calcutta or Kolkata as it is known today. It also persuaded the Mughal Emperor Aurangzeb to issue a Farman granting the company the right to trade duty-free. A Farman means a royal edict or a royal order. The company tried continuously to press for more concessions and manipulate existing privileges. Aurangzeb's Farman, for instance, had granted only the company the right to trade duty-free, but officials of the company who were carrying on private trade on the side were expected to pay duty.
This they refused to pay, causing an enormous loss of revenue for Bengal. How could the Nawab of Bengal, Murshid Guli Khan, not protest? Subscribe to my channel. Click on bell icon to get notification about new video.