East India Company

In 1600, the East India Company acquired a charter from Queen Elizabeth I, granting it the sole right to trade with the East. 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 this sea route to India in 1498. By the early seventeenth 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 things. The fine qualities 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 seventeenth and eighteenth 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.
East India Company begins trade in Bengal The first English factory was set up on the banks of the river Hugli in 1651. This was the base from which the Company’s traders, known at that time as “factors”, operated. As trade expanded, the