British Empire: Rise and Fall of the East India Company

Reviewing the role played by the Dutch East India Company at the Cape Colony when considering South Africa’s history, it would just about not add up to neglect to deal with its greatest competitor that is, the East India Company. Resembling the Dutch East India Company, the East India Company developed into a global trading empire, dealing in East Indian goods, having its army, freely occupying territories, freely waging war against competitors, and over time, dealing in the international slave trade. The Company wielded such a great deal of power during its time of existence that power was, over and over again, abused, driving the British government to take control, eventually ending the Company altogether in the 19th century. Even though the Company seizes to exist, because of the influence it had in the regions in which it operated, it is worth looking into its history.

A drawing of the headquarters of the East India Company, the East India House, in London, along with the Company’s emblem and two national flags representing Great Britain.
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Founding of the EIC

Throughout the 16th century, Spanish and Portuguese merchants dominated sea routes to the group of islands in Southeast Asia. Recognizing the rising sea power of these nations coupled with the value in Eastern goods like spices, textiles, and jewels, from the late 16th century, British merchants began openly challenging Spanish and Portuguese dominance. For example, they defeated the Spanish Armada in 1588, seizing Spanish and Portuguese ships and shipment. While sea voyages were, all in all, dangerous not only because of the possibility of falling ill but also because of the possibility of dealing with pirates and competing merchants, even then, British merchants, set on improving their understanding of navigating the seas and longing to benefit from the goods of the East Indies, made plans to start a trading company and journey to the Far East.

Accordingly, in 1599, a group of British merchants talked over their plans and committed large amounts of money to their mission. Nearly a year later, on the 31st of December 1600, with the backing of Queen Elizabeth I, they were granted a royal charter allowing them to journey to the East Indies, trading on behalf of the royal crown in return for a monopoly on British trade. Their trading company, originally named Governor and Company of Merchants of London Trading into the East Indies, later identified as, the East India Company, founded by John Watts and George White, competed against Spanish, Portuguese, and Dutch merchants and, in the end, managed to develop into the greatest joint-stock company of its time.

Dominance of Textile Trade

The earliest ships left for the East Indies in 1601 and returned to England after several months shipping pepper. In time, the British welcomed shipments of cloves, cinnamon, ginger, and nutmeg, amongst other things. These spices of the Spice Islands, used in foods and medicines, generated large amounts of money. In the fullness of time, however, met with rising competition in the spice trade, the Company decided to look towards the textile trade, dealing in cotton and silk. These Indian textiles changed European society in a significant way, shaping the earliest stages of fashion in Europe. By the 18th century, owing to the high demand for Indian textiles, the Company was able to develop into the world’s frontrunner in the textile trade.

The Company established a trading system in its territories in the East Indies, letting representatives set up trading posts, giving them the power to barter and obtain goods. In 1613, for example, after an agreement with the 4th Mughal Emperor, Jahangir, the Company set up its first trading post in Surat, India. Over several years, the Company set up trading posts in Bombay, Calcutta (Kolkata), Madras (Chennai), and Surat, and by the middle of the 17th century, the Company had over 20 trading posts in India. The Company also fought its way into becoming a global trading empire. In the same way that the Company had shifted its attention from the spice trade to the textile trade due to increasing competition, recognizing the power of the Spanish and the Portuguese, with the help of the Dutch East India Company, the East India Company succeeded in weakening Spanish and Portuguese power and presence in the East Indies. As a result of that, the Company expanded its trading system, setting up trading posts in the Persian Gulf and different places in Asia.

Colonial Ambitions

During its time in the East Indies, the Company had discovered spices in the Spice Islands, textiles in India, and after some time, tea in China. The Chinese, however, only traded their tea for silver and realizing that they wouldn’t be able to get hold of this tea because they didn’t have an adequate amount of silver, the Company resolved to produce opium from its territories in India. The Company arranged to exchange opium for tea through the black market. The opium trade survived for very many years before the late 1830s when the Chinese government insisted upon the surrender and destruction of all opium. With the British opposing this decision, the First Opium War (1839-1842) was started. The British defeated the Chinese and after their loss, the Chinese surrendered Hong Kong to the British, making Hong Kong a colony of the British Empire for the next several decades – not counting the years 1941-1945 when it was occupied by the Japanese.

Several years after the Opium War, resistance to the Company’s rule in its Indian territories rose. However, there were quite a few instances of opposition by the local people even before the Opium War. In 1757, for example, in what has come to be identified as the Battle of Plassey, the Company acted in response to a local uprising about taxes by quickly overpowering its challengers. Following the rebellion, the Company not only took complete responsibility for the management of its territories but its triumph allowed it to increase its power over taxes. The Battle of Plassey has continually been identified as a defining moment for the Company for it displayed the earliest signs of the Company’s move from operating as a trading enterprise to operating as a colonizer, effectively exploiting the local people and their resources.

The Decline

Furthermore, a century later, the Indian Rebellion of 1857, an uprising that was to change the future of the Company, began. In this rebellion, Indian soldiers who had been working for the Company’s army violently attacked and killed British soldiers, citizens, and anyone else whose loyalties lied with the Company. The first rebellion, occurring in the city of Meerut, set off further cases of rebellion against the Company in different parts of India. The people of India had grown resentful of the Company’s presence and unjust rule in India and this rebellion became their way of expressing their discontent. In response to the rebellion, the Company violently attacked and killed Indian soldiers, citizens, and anyone else backing the uprising. In 1858, after the uprising, the British government passed the Government of India Act, essentially abolishing the Company.

The Company existed and operated during a time when the only way for states to build their power and influence was through dominating the seas. The Company was granted a royal charter because its success in foreign trade, represented the success of the British Empire. As follows, the existence and promising success of the Company was not only beneficial to British merchants but, it was also valuable to the British Empire too. Because of the times that the Company existed and operated in, its growing economic power allowed it to have a certain degree of political power. For example, the Company had the power to give loans to the treasury, create its own money, command its army, freely occupying land, and engage in war against any persons who resisted its rule. The Company’s rich senior officials or partners also often used their riches to become Members of Parliament or win over government officials through gifts and donations, allowing them have a hand in the affairs of the state in some way.

Resembling the Dutch East India Company, the East India Company existed and operated as a state and like the Dutch East India Company, the East India Company abused its power completely. It was able to do so because having a monopoly on British trade protected it from any domestic competition. The absence of any British competition as well as having the kind of power that it wielded, allowed it to act unethically. Even so, the British government and society did find ways to challenge its power. For example, in 1784, the British government passed the East India Act, bringing the Company’s territories under the control of the British government. Similarly, in 1813, the British government passed the Charter Act, bringing the Company’s monopoly on trade – not including their trade in China and trade in tea with India – to an end. Moreover, the economic ideas of the 18th century concerning free trade in addition to the growing opposition to the Company in Britain, all worked together, ultimately weakening the power of the Company. While the Company ended in 1858, it continued to operate as a state-run trading company but, in 1874, all operations were seized. The East India Company developed not only into a global trading empire but also developed into the world’s longest standing trading company, outliving all leading global trading empires of its time.

References and Further Readings

Dalrymple, W. (2019). The Anarchy: The Relentless Rise of the East India Company. Bloomsbury Publishing

Erikson, E. (2014). Between Monopoly and Free Trade: The English East India Company, 1600-1757. Princeton University Press

Freeman, H. (2016). The East India Company: From Beginning to End. Create Space Independent Publishing Platform

McAleer, J. (2017). Picturing India: People, Places, and the World of the East India Company. University of Washington Press

Pettigrew, W. A., & Gopalan, M. (2016). The East India Company, 1600-1857: Essays on Anglo-Indian Connection. Routledge

Roos, D. (2020). How the East India Company Became the World’s Most Powerful Monopoly. [Online]. Available:

Roy, T. (2012). The East India Company: The World’s Most Powerful Corporation. Penguin Books India

Wheeler, J. T. (1886). India Under British Rule: From The Foundations of the East India Company. Macmillan and Co.

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