NCERT / CBSE NOTES | Class 8th (VIII) : Chapter Summary


From Trade to Territory


The East India Company

In 1858, the responsibility of managing the affairs of the Indian states got transferred to the British Crown.

The English East India Company was set up in 1600 when Queen Elizabeth I granted a charter giving the company sole rights in England to establish trade relations with the East. The Portuguese, Dutch and French were trading with India much before the British.


India was famous for its great riches - silk, cotton and spices and there was stiff competition amongst various European companies for these products. This led to many fierce battles between the trading companies. However, trading by fortifying settlements led to conflicts among the local rulers.

In 1651, the first English factory was established on the banks of river Hugli in West Bengal.  As trade expanded, they started building a fort around the factory and eventually bribed the Mughals to give the Company zamindari rights over three surrounding villages.

In 1717, the Company convinced Mughal Emperor Aurangzeb to grant a royal order or farman for duty free trade.

Nawabs Murshid Quli Khan, Alivardi Khan and Sirajuddaulah were against the Company acquiring territories and expanding its trade in Bengal. The nawabs demanded huge tributes from the Company to continue trading and prevented it from minting coins and extending its fortifications.

All these conflicts between the nawabs and the Company eventually resulted in the famous Battle of Plassey, which marked the start of the Company rule in India.

How Trade Led to Battles

Many battles were fought between the Nawabs of Bengal and the Company, before it could establish its rule over the province of Bengal. The Battle of Plassey fought in 1757 was the first major victory for the East India Company and marked the start of its rule in India.

After the death of Aurangzeb, the Mughal Empire disintegrated and strong nawabs like Murshid Quli Khan, Alivardi Khan and Sirajuddaulah came to power one after another. The Company wanted to trade duty free whereas the nawabs were trying to levy more duties.

The Company however, wanted puppet rulers who would agree to all its demands like privileges and concessions to expand their trade.

Sirajuddaulah was a powerful leader who became the nawab of Bengal in 1756 and was dead against the Company. The Company tried to make one of Sirajuddaula’s rivals, the Nawab of Bengal. This infuriated Sirajuddaulah and led to him capturing the English Factory at Kassimbazar, followed by the fort at Calcutta.

The Company enraged with this, retaliated by waging a war against Sirajuddaulah at Plassey in 1757 under the command of Robert Clive. Sirajuddaulah was defeated and later assassinated.
This was the Company’s first major victory in India. The Company appointed Mir Jafar as the Nawab of Bengal. The Company was still unwilling to take over the control of the administration wished for puppet rulers who would grant privileges and concessions for trade expansion.

When Mir Jafar protested he was deposed and Mir Qasim was made the nawab. Howeverm when he too protested, he was defeated in the battle at Buxar and Mir Jafar was brought back.

Finally, in 1765, after the death of Mir Jafar, the Company steered towards becoming Nawabs themselves. On 12 August 1765, the Company was appointed the Diwan of Bengal by Mughal Emperor Shah Alam II.

A diwan had the power to administer territories under its control and collect revenues. This could comfortably finance the Company’s trade expenses. The original Nawabs of Bengal were forced to part with their land and give huge sums of money to the Company officials.

Expansion of the Company Rule

The Battle of Plassey fought in 1757 was a turning point for the East India Company and marked the start of its rule in India. The Company annexed many Indian states by using different well thought strategies.

It started with Bengal and a few states on the east coast and southern India but soon they spread to almost all of south India and parts of western, central and northern India. By1857, they virtually had the whole of India under their control. The Company used a combination of political, diplomatic and economic methods to annex the states, and rarely resorted to a direct military attack on an unknown territory.

In 1764, after the Battle of Buxar, the British decided to appoint Residents in many of the Indian states. The Residents were political or commercial agents used by the Company to meddle in the internal affairs of the states. The residents hence began to decide the successor to the throne and other administrative posts.

Another strategy introduced by the Company was forcing a state into a subsidiary alliance. Under this strategy, an Indian ruler wasn’t allowed to maintain independent armed forces and had to pay the Company for the subsidiary forces it provided.

Direct military confrontation was also a strategy pursued by the Company to annex the Indian states. The Company resorted to a direct military attack only when it felt a threat to its economic and political interests.

Mysore was however annexed through a direct military attack. The British fought a series of four wars known as the Anglo-Mysore Wars against Haider Ali and his son Tipu Sultan and in 1799, got victory in the war at Seringapatam.

The Marathas also lost the Third Battle of Panipat to the Afghans. After the Battle of Panipat, the Maratha states were ruled by chiefs belonging to dynasties like the Holkars, Scindias, Bhonsles and Gaikwads. The Maratha chiefs had to report to a principal minister, known as the Peshwa, who was their military and administrative head.

The Maratha kingdom was also annexed by the company through a direct military attack. They fought a series of wars known as the Anglo-Maratha Wars and by 1819 managed to gain control over the territories to the south of the Vindhyas.

Between 1830 and 1850, Afghanistan, Sind and Punjab were also attacked by the Company. It wanted to gain control over these territories as it felt Russia might enter India through these states.

Another policy introduced by the Company to annex the Indian states was the policy of paramountcy. This was introduced by Lord Hastings, the first Governor-General of India from 1813 to 1823. The Company through this policy claimed that it was the supreme power and had all the rights to directly annex or threaten to annex any Indian state.

Later, Lord Dalhousie, the Governor-General of India introduced a policy known as Doctrine of Lapse, according to which a kingdom without a male heir would automatically come under the rule of the Company after the death of the ruler.

Kingdoms like Jhansi, Udaipur, Satara, Nagpur and Sambalpur were annexed under this strategy. In 1856, the Company took over Awadh, claiming to protect it from the bad governance of the Nawab of Awadh.

All these annexation strategies led to a wave of hatred against the English and culminated as the great revolt of 1857.

A New Administration

By 1857, about 63% of the Indian territories and 78% of the Indian population were under the direct control of the East India Company. Warren Hastings, the first Governor-General played a vital role in the expansion of the Company’s Rule in India.

Under his administration the Company gained control over three presidency units; Bengal, Madras and Bombay. The territories under the British rule were divided into administrative units known as presidencies.

He appointed a collector in each Indian district, responsible for collecting taxes and maintaining law and order. The collector’s office known as the Collectorate soon became the centre of power. Warren Hastings introduced reforms in the system of justice too.

All districts were supposed to have a criminal court or faujdari adalat and a civil court also known as the diwani adalat. Every criminal court was presided by a qazi and a mufti, who were Muslim jurists.
The civil court was directly presided over by a European district collector, who was assisted by Hindu pandits and the Maulvi’s. To ensure uniformity in law, a digest of the Hindu laws was compiled in 1775, followed by a digest of Muslim Laws in 1778.

According to the regulating act of 1773, a Supreme Court and a court of appeal – the Sadar Nizamat Adalat – were also set up in Calcutta.

The Company along with administrative reforms, also introduced changes in its military culture. It was greatly influenced by the Mughal Army which was categorized into the cavalry and the infantry. The cavalry or the sawars were trained to fight on horsebacks whereas the infantry or the foot soldiers were trained in archery and the use of swords.

The 18th century the Company started recruiting peasants into the army to be called the sepoy army. The British needed the infantry to fight against Burma, Egypt and Afghanistan. By the early 19th century, the Company army were exposed to European-style drills, discipline and training to create a uniform military culture. By the early 19th century, the Company had established itself as a colonial power.
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