Chapter 2 – From Trade to Territory Notes

Content Structure

• 1. Introduction
• 2. East India Company Comes East
  • 2A. East India Company begins trade in Bengal
  • 2B. How trade led to battles
  • 2C. The Battle of Plassey (1757)
  • 2D. The Battle of Buxer (1764) 
  • 2E. Company officials become “nabobs” (nawabs)
• 3. Company Rule Expands
  • 3A. Tipu Sultan – The “Tiger of Mysore”
  • 3B. War with the Marathas
  • 3C. The claim to paramountcy
  • 3D. The Doctrine of Lapse
• 4. Setting up a New Administration
  • 4A. The Company army
• 5. Conclusion

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1. Introduction

• Aurangzeb was the last strong Mughal king. After he died in 1707, his empire became weak because many local rulers started controlling their own areas.
• These small kingdoms became powerful, and the Mughal rule in Delhi could no longer control the whole empire.
• In the late 1700s, the British, who first came to trade, slowly became stronger and took over many parts of India, ruling a huge empire.

After Aurangzeb, there were no strong Mughal rulers, but the Mughal emperors were still seen as important symbols. In 1857, when a large rebellion against British rule broke out, Bahadur Shah Zafar, the Mughal emperor at that time, was seen as the main leader. After the British defeated the rebellion, they forced Bahadur Shah Zafar to leave the kingdom, and his sons were sadly killed.

2. East India Company Comes East

• In 1600, the East India Company received a charter from Queen Elizabeth I, making it the only English company allowed to trade with the East.
• No other English company could compete with it.
• The Company could travel across the seas, buy goods cheaply, and sell them in Europe at higher prices.
• Trading companies made money by blocking competition to control prices.
• However, the charter did not stop other European countries from trading in the East.

(i) European Competition in the Indian Ocean

• By the time English ships reached the Indian Ocean, the Portuguese had already set up a base in Goa.
• In 1498, Portuguese explorer Vasco da Gama discovered the sea route to India.
• By the early 1600s, the Dutch and French also started trading in the Indian Ocean.

(ii) Demand for Indian Goods

• All these European companies wanted the same goods, such as:
  • Cotton and silk from India.
  • Spices like pepper, cloves, cardamom, and cinnamon, were in high demand in Europe.
• Competition increased the prices of these goods, reducing profits.

(iii) Conflicts Between Trading Companies

• To increase profits, companies fought by:
  • Sinking rival ships.
  • Blocking trade routes.
  • Preventing rivals from getting goods.
• They also built forts to protect their trading posts and used weapons to secure their business.

(iv) Impact on Local Politics

• Building forts to safeguard trade led to conflicts with local rulers.
• This made it difficult to separate business from politics.

Mercantile

A business that earns profit by purchasing goods at a low price and selling them at a higher price.

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2A. East India Company begins trade in Bengal

In 1651, the English set up their first factory on the banks of the river Hugli. It had a warehouse for storing goods and offices for Company officials. As trade grew, the Company invited merchants and traders to settle nearby.

(i) Expansion of the Settlement

• By 1696, the Company built a fort around the settlement.
• In 1698, it bribed Mughal officials to get zamindari rights over three villages:
  • Sutanuti
  • Kalikata (later became Calcutta, now Kolkata)
  • Gobindapur
• The Company also convinced Mughal emperor Aurangzeb to allow it to trade without paying taxes.

(ii) Misuse of Privileges

• Wanting more benefits, the Company misused its privileges.
• Aurangzeb’s order only allowed the Company to trade tax-free.
• However, Company officials, who did private trade, also refused to pay taxes.
• This led to a big loss of revenue for Bengal.

Farman – A royal edict, a royal order.

2B. How trade led to battles

• In the early 18th century, the East India Company and the Nawabs of Bengal had major conflicts.
• After Aurangzeb’s death, the Nawabs of Bengal became stronger and ruled independently.
• After Murshid Quli Khan, Alivardi Khan became the Nawab of Bengal, followed by Sirajuddaulah.
• Each of them was a strong ruler.
• They refused to give the Company special concessions or favours.
• They:
  • Demanded high payments for trade.
  • Did not allow the Company to mint coins.
  • Stopped the Company from building more forts.
  • Accused the Company of cheating, avoiding taxes, and disrespecting the Nawab.
• The Company argued that the Nawab’s rules were unfair and made trade difficult.
• It wanted:
  • Fewer taxes.
  • Bigger settlements.
  • More villages.
  • Stronger forts to protect its business.
• These conflicts kept increasing and eventually led to the Battle of Plassey.

2C. The Battle of Plassey (1757)

• After Alivardi Khan died in 1756, Sirajuddaulah became the Nawab of Bengal.
• The East India Company saw him as a threat and wanted a weak Nawab who would obey them.
• They tried to help one of his rivals take power but failed.
• This angered Sirajuddaulah, and he ordered the Company to:
  • Stop interfering in Bengal’s affairs.
  • Stop building forts.
  • Pay taxes.
• When the Company refused, Sirajuddaulah:
  • Marched with 30,000 soldiers.
  • Captured the English factory at Kassimbazar.
  • Took Company officials as prisoners.
  • Blocked English ships.
  • Took control of Calcutta.
• The Company was shocked and sent Robert Clive with an army from Madras.
• After failed negotiations, Clive led the Company’s army against Sirajuddaulah in 1757 at the Battle of Plassey.
• The Nawab lost because Mir Jafar, one of his commanders, betrayed him and did not fight.
• Clive had promised to make Mir Jafar the next Nawab.
• After the battle, Sirajuddaulah was killed, and Mir Jafar became Nawab.
• Initially, the Company did not want to rule Bengal.
• It only wanted to expand trade and gain more money without taking full control.

The promise of riches

The territorial ambitions of the mercantile East India Companies were viewed with distrust and doubt in England. After the Battle of Plassey, Robert Clive wrote to William Pitt, one of the Principal Secretaries of State to the English monarch, on 7 January 1759 from Calcutta:

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The Nawab complains – In 1733 the Nawab of Bengal said this about the English traders:

When they first came into the country they petitioned the then government in a humble manner for liberty to purchase a spot of ground to build a factory house upon, which was no sooner granted but they built a strong fort, surrounded by it with a ditch which has communication with the river and mounted a great number of guns upon the walls. They have enticed several merchants and others to go and take protection under them and they collect a revenue that amounts to Rs. 100,000… they rob and plunder and carry a great number of the king’s subjects of both sexes into slavery in their own country.

2D. The Battle of Buxer (1764) 

• Mir Jafar protested against the Company’s growing control, so the Company removed him and made Mir Qasim the Nawab.
• Angry, Mir Qasim joined forces with:
  • The Mughal emperor Shah Alam II, Nawab of Awadh, and Shuja-ud-Daul fought the British.
• In 1764, the Battle of Buxar took place.
• The three rulers fought against the Company, but the British army defeated them.
• Mir Qasim fled, and the Company made Mir Jafar Nawab again because he promised to pay the British Rs. 500,000 every month.
• However, the Company wanted more money for trade and wars.
• When Mir Jafar died in 1765, the Company decided to rule Bengal themselves.

Company Takes Control of Bengal

• In 1765, the Mughal emperor made the Company the Diwan of Bengal, giving it full control over Bengal’s money.
• Now, the British used Indian revenue to:
  • Pay for soldiers
  • Finance trade
  • Build forts
• Instead of bringing gold and silver from Britain, the Company used Indian revenues to cover its expenses.
• These revenues were used to:
  • Purchase cotton and silk textiles in India
  • Maintain Company troops
  • Build the Company fort and offices in Calcutta

2E. Company officials become “nabobs” (nawabs)

• The term ‘Nawab’ came to mean that the Company had gained more power and authority.
• After the Battle of Plassey, the East India Company grew stronger.
• Company officials started living like Nawabs, forcing the real Nawabs of Bengal to give them land and money.

(i) Robert Clive and Wealth in India

• Robert Clive was one such official.
• He arrived in Madras (now Chennai) in 1743 at the age of 18.
• By the time he left India in 1767, he had collected £401,102 in wealth.
• In 1764, he became Governor of Bengal, with the task of stopping corruption in the Company.
• However, in 1772, the British Parliament accused him of corruption.
• He was found not guilty, but he committed suicide in 1774.

(ii) Life of Company Officials

• Not all Company officials became rich.
• Many died early due to diseases and wars.
• Some came from poor families and just wanted to earn enough to return home.
• Those who became rich showed off their wealth in Britain and were called “nabobs” (from the word Nawab).
• However, people in Britain mocked them in plays and cartoons for being show-offs.

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3. Company Rule Expands

Between 1757 and 1857, the East India Company took control of many Indian states but rarely attacked directly. Instead, it used political tricks, economic pressure, and diplomacy to gain power.

After the Battle of Buxar (1764), the Company placed Residents in Indian states. These officials interfered in royal matters, deciding who would be king and who would hold key positions.

The Company also forced rulers into a Subsidiary Alliance, which meant

• No independent armies for Indian rulers.
• Company protection, but rulers had to pay for British troops.
• If they couldn’t pay, they lost land.

For example, under Governor-General Richard Wellesley (1798-1805)

• In 1801, the Nawab of Awadh lost half his land for not paying.
• Hyderabad also lost land for the same reason.

What power did the Resident have?

This is what James Mill, the famous economist and political philosopher from Scotland, wrote about the residents appointed by the Company. We place a resident, who is the king of the country, whatever injunctions of non-interference he may act under. As long as the prince acts in perfect subservience, and does what is agreeable to the residents, that is, to the British Government, things go on quietly; they are managed without the resident appearing much in the administration of affairs … but when anything of a different nature happens, the moment the prince takes a course that the British Government think is wrong, then comes clashing and disturbance.

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3A. Tipu Sultan – The “Tiger of Mysore”

The East India Company used the military when it felt its power or trade was at risk. This happened in Mysore, a strong kingdom in South India.

(i) Rise of Mysore

• Mysore became powerful under:
  • Haidar Ali (1761-1782)
  • Tipu Sultan (1782-1799)
• Mysore controlled trade on the Malabar coast, where the Company bought pepper and cardamom.
• In 1785, Tipu Sultan:
  • Banned the export of sandalwood, pepper, and cardamom.
  • Stopped local merchants from trading with the British.
  • Allied with the French and modernized his army with their help.

(ii) Wars Between Mysore and the British

• The British saw Tipu Sultan as a big threat.
• They fought four wars against Mysore:
  • First Anglo-Mysore War (1767-69)
  • Second Anglo-Mysore War (1780-84)
  • Third Anglo-Mysore War (1790-92)
  • Fourth Anglo-Mysore War (1799)
• In 1799, the British won the Battle of Shrirangapatnam, where Tipu Sultan was killed.

(iii) Aftermath

• After Tipu Sultan’s death, Mysore was given back to the Wodeyar dynasty.
• However, the Company forced them into a Subsidiary Alliance, ensuring British control over Mysore.

The legend of Tipu

Kings are often surrounded by legend and their powers are glorified through folklore. Here is a legend about Tipu Sultan who became the ruler of Mysore in 1782. It is said that once he went hunting in the forest with a French friend. There he came face to face with a tiger. His gun did not work and his dagger fell to the ground. He battled with the tiger unarmed until he managed to reach down and pick up the dagger. Finally, he was able to kill the tiger in the battle. After this, he came to be known as the “Tiger of Mysore”. He had the image of the tiger on his flag.

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3B. War with the Marathas

• In the late 18th century, the East India Company wanted to end Maratha rule.
• After the Third Battle of Panipat (1761), the Marathas lost their chance to rule Delhi.
• They split into different states, ruled by leaders like:
  • Sindhia
  • Holkar
  • Gaikwad
  • Bhonsle
• These chiefs were part of a confederacy led by the Peshwa (Principal Minister), who was the military and administrative head based in Pune.
• Mahadji Sindhia and Nana Phadnis were two famous Maratha leaders of the late 18th century.

Anglo-Maratha Wars

1. First Anglo-Maratha War (1782) – Treaty of Salbai
   • No clear winner.
2. Second Anglo-Maratha War (1803-05)
   • The British captured:
     • Orissa
     • Agra
     • Delhi
     • Nearby territories
3. Third Anglo-Maratha War (1817-19)
   • The British completely defeated the Marathas.
   • The Peshwa was removed and sent to Bithur near Kanpur.

3C. The claim to paramountcy

• In the early 1800s, the East India Company began taking over more Indian land.
• Under Lord Hastings (1813-1823), they introduced “paramountcy”, meaning British power was the highest.
• The British claimed they had the right to take over any kingdom to protect their interests.
• This policy continued to shape British expansion in India.

(i) Resistance Against British Rule

• Not everyone accepted British rule.
• When the British tried to take over Kitoor (in present-day Karnataka):
  • Rani Channamma led a resistance movement.
  • She was captured in 1824 and died in prison in 1829.
  • Rayanna, a local chowkidar (guard), continued the fight.
  • With public support, he attacked British camps and destroyed records.
  • He was later caught and hanged in 1830.

(ii) British Wars and Expansion

• In the 1830s, the British feared Russia might invade India.
• To stop this, they fought a war in Afghanistan (1838-1842) and took control.
• In 1843, they captured Sind.
• The British then wanted Punjab, but Maharaja Ranjit Singh kept them away.
• After Ranjit Singh’s death in 1839, the British fought:
  • First Anglo-Sikh War (1845-46)
  • Second Anglo-Sikh War (1848-49)
• In 1849, the British defeated the Sikhs and took control of Punjab.

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3D. The Doctrine of Lapse

The final British takeovers happened under Lord Dalhousie (Governor-General 1848-1856). He introduced the Doctrine of Lapse, which stated that “if an Indian ruler died without a son, his kingdom would automatically become British territory”.

(i) Annexed States Under Doctrine of Lapse

• Using this rule, the British annexed several states:
• Satara (1848)
• Sambalpur (1850)
• Udaipur (1852)
• Nagpur (1853)
• Jhansi (1854)

(ii) Annexation of Awadh (1856)

• In 1856, the British took over Awadh.
• This time, they claimed they were doing it to “help the people” and end the Nawab’s bad rule.
• This angered the people, and they joined the great revolt of 1857 against the British.

4. Setting up a New Administration

• Warren Hastings was the first Governor-General of India (1773-1785).
• He helped expand British control over India.
• By his time, the Company ruled Bengal, Bombay, and Madras.
• These were divided into three Presidencies:
  • Bengal
  • Madras
  • Bombay
• Each Presidency had a Governor, but the Governor-General was the highest authority.

(i) New System of Justice (1772)

• Every district had two courts:
  • Criminal Court (Faujdari Adalat) – Run by a qazi and a mufti, but supervised by the British.
  • Civil Court (Diwani Adalat) – Run by a British officer, with Hindu pandits and Muslim maulvis explaining Indian laws.

• Different interpretations of Hindu laws caused confusion.
• In 1775, eleven pandits were asked to compile Hindu laws into one book.
• N.B. Halhed translated this into English.
• By 1778, a Muslim law code was also written for British judges.

(ii) Regulating Act of 1773

• The Regulating Act of 1773 established:
  • A Supreme Court in Calcutta.
  • A Sadar Nizamat Adalat (Court of Appeal) in Calcutta.

(iii) Role of the Collector

• The Collector was the most important British officer in the district.
• His main responsibilities:
  • Collecting taxes.
  • Maintaining law and order.
• He worked with judges, police officers, and darogas.
• His office, the Collectorate, became the new centre of power, replacing old Indian rulers.

Qazi	A judge
Mufti	A jurist of the Muslim community was responsible for expounding the law that the Qazi would administer.
Impeachment	A trial by the House of Lords in England for charges of misconduct brought against a person in the House of Commons.

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4A. The Company army

The British rule in India brought new ideas of administration but relied on a strong army.

(i) Traditional Indian Armies

• The Mughal army had:
  • Horse soldiers (cavalry).
  • Foot soldiers (infantry) trained in archery and sword fighting.
• Cavalry was the most important, and zamindars and villages provided extra foot soldiers when needed.
• In the 18th century, Awadh and Banaras started training peasants as professional soldiers.

(ii) Formation of the Sepoy Army

• The East India Company copied this system and created the sepoy army (sepoy = soldier).
• By the 1820s, the British army used muskets and matchlocks in wars.
• The British, fighting in Burma, Afghanistan, and Egypt, needed fewer horse soldiers and focused more on infantry.

(iii) Strict Military Training & Problems

• In the early 1800s, the British introduced strict European-style military training.
• Soldiers were forced to follow new rules and drills.
• These changes ignored caste and religious traditions, causing problems.
• Could soldiers forget their traditions and see themselves only as fighters?
• Many sepoys were unhappy, and the Revolt of 1857 was their reaction to these changes.

Dharmashastras	Sanskrit texts prescribing social rules and codes of behaviour, composed from c. 500 bce onwards.
Sawar	Men on horses.
Musket	A heavy gun used by infantry soldiers.
Matchlock	An early type of gun in which the powder was ignited by a match.

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5. Conclusion

The East India Company changed from a trading company into a powerful ruler of India. The invention of steamships in the early 1800s helped this change. Before steamships, it took six to eight months to travel to India by sea. With steamships, the journey took only three weeks, making it easier for more British people and their families to come to India. By 1857, the East India Company directly ruled 63% of India’s land and 78% of its people. It also had indirect control over the rest of the country. This meant that by 1857, the Company controlled almost all of India.

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