The British Empire & India

After reading these notes, test your knowledge with free interactive questions on Seneca — used by over 10 million students.

The British Empire and the East India Company

The East India Company was a private company. This private company initiated Britain's control of India.

On the 31st December 1600, Elizabeth I gave the East India Company (EIC) a royal charter to own a British monopoly over trade with India. The East India Company in 1600 mainly focused on trading spices and would compete with Portuguese and Dutch companies in India.
The East India Company is the best example of Martin Kitchen's view (1996) that before 1800, ‘the Empire [had] largely been left to exploitation by individual adventurers and commercial companies’.
The East India Company was a private company founded by the leaders of the Levant Company. They wanted to match the success of the Dutch "Company of Distant Lands', which was having great success trading spices with Indonesia.

The East India Company was a private company until 1858, by which time it had virtually seized control of India.
In the Anglo-Mughal War of 1686, the East India Company began its aggression, resisting tax increases on their business. The resistance led to a major war, but the East India Company was fined 150,000 rupees on its defeat.
The East India Company fought against other businesses to control India. The Carnatic Wars were fought in India by the East India Company and its French rival, the French East India Company.
In 1803, the East India Company is estimated to have had a private army of 250,000 men (mainly local Indian people). This was larger than the British government's army.

In 1765, Shah Alam II signed the Treaty of Allahabad with the East India Company. He was the Emperor of the Mughal Empire in India.
The Treaty agreed that the Mughal Empire would not collect taxes anymore. Instead, the East India Company's own tax collectors and private army would make money by ruling the region, not only by trading spices and other goods.
Tharoor (2019) says "Shah Alam II and his successors lived on the sufferance of the Company", whilst Dalrymple (2019) calls the East India Company “the most advanced capitalist organisation in the world” who focused only on profit.

Tharoor (2019) says "It was not the British government that seized India at the end of the 18th century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India by an unstable sociopath – Clive [Robert Clive]."
Dalrymple (2019) says that "the East India Company probably invented corporate lobbying". It spend £1,200 paying MPs in 1693 and over 25% of MPs held EIC shares.
In 1767, when the East India Company came under challenge, it agreed to pay £400,000 to the government to keep its position.
The East India Company paid large dividends to its shareholders (up to 22% in some years) and in many cases bribed and lobbied MPs in Britain. The Parliamentary investigation found the EIC guilty of bribery.