PAGE \* MERGEFORMAT 1 The Acquisition of Political Power in India By the English East India Company The English East India Company ( EIC) had been active in India since 1600 as a trading corporation. This company, which was chartered by the English monarch Queen Elizabeth I in 1600 A.D., was also granted a monoply right to trade with the ?east?. In other words, no other English organizations, corporations or individuals had the legal right to trade with the ?East?. The EIC?s trade with India grew in leaps and bounds in the course of the 17th century and it emerged as a powerful and very important commericial entity within India. The main commodities which interested the Eic in India were textiles ( mainly cottton textiles, but also some silk), saltpetre, opium, indigo, some spices etc. By about 1700 A.D., the EIC had established a network of ?factories? in different parts of the sub-continent, had established three territorial enclaves at Bombay, Madras and Calcutta, possessed close connections with important Indian merchants and bankers and tried to cultivate good relations with various levels of the political system in India. The EIC depended on Indian collaborators ? called banians, dubashes etc. ? who served as interpreters, translators, commercial intermediaries, agents, representatives etc. to the EIC. Thus close relations developed between the Indian banians, dubashes etc. and European companies in India. The latter also developed close relations with certain groups of Indian mercahnts, brokers, bankers etc. The EIC as well as other European companies who were interested in trading with India ( e.g. the Dutch , the French etc.) encountered a problem in financing their purchases of Indian goods. Their initial plan had been to sell English or Dutch or French goods in India and to use the money they got from these sales to buy Indian goods. But, Indian consumers of that time ( 16th-18th centuries) had no interest in buying European goods and therefore this plan did not work. The EIC as well as other European companies were compelled to ship large amounts of gold and silver to India ( these precious metals/bullion had to be either taken to Indian bankers & exchanged for Indian currency OR, taken to Indian mints to be made into Indian currency. Both processes involved what the EIC regarded as steep charges for them. The influx of large amounts of bullion into India plus the competition among various groups of European and other merchants ( e.g. Central Asian, Iranian etc.) to buy Indian commodities, expanded the volume of India?s export trade and also benefitted the Indian economy enormously. Indian merchants, brokers, banians etc. who worked closely with European merchants also often made large fortunes through these associations. Employees of the EIC were not legally allowed to engage in trade in their private capacities during their tenures in India. However, in reality, large numbers of EIC employees did develop personal/private trading enterprises in India and enormous private fortunes were acquired by many in this way. They capitalized on the stature and power of the EIC to become powerful merchants in their private capacities, while at the same time, they serviced the corporate needs of the EIC as its employees. The EIC disapproved of private trading by its employees , but was powerless to stop it. Until about the beginning of the 18th century ( this was the time from which the growing weakness of the Mughal empire became apparent) , the EIC for the most part maintained deferential relations with different levels of the Indian political system. They tried to keep on good terms with Mughal and other functionaries and petitioned them often for various commercial concessions they wanted. A very important concession they secured from the Mughal empire Farrukhsiyar in 1717 was the right to trade in Bengal without having to pay any customs duties. The Mughal governor (subahdar) of Bengal at this time was Nawab Murshid Quli Khan, a very able tough administrator ( he was also trying during this period, to make himself independent and to convet Bengal, a Mughal province into an autonomous or semi-autonomous kingdom) . Murshid Quli objected strongly to the grant of this privilege to the EIC , but was powerless to stop it. The Farrukhsiyar farman ( farman = a written order from the govt.) generated a great deal of acrimony between the nawabs ( rulers) of Bengal and the EIC. Not only did the EIC?s commerce stop paying duties, all English private traders began to claim that the farman of 1717 had exempted their trade too from customs duties. This claim was rejected by the nawabs of Bengal. In reality, the language of the farman was ambiguously worded and could be interpreted in both ways. Thus, post -1717, relations between the EIC and the nawabs of Bengal grew progressively worse. In the latter?s perspective, the Bengal govt, was deprived of a large amount of revenue because of this. It also placed Indian merchants operating in Bengal ( as well as other European companies who traded in Bengal) at a disadvantage vis-à-vis the EIC because they had to pay customs duties. Up till about the beginning of the 18th century, the EIC had also had disputes with various Indian functionaries in different parts of India over the issue of fortifications. The EIC? s desire to fortify their territorial settlements was usually disapproved of by the Indian authorities. The weakness of the Mughal empire produced some degree of turmoil in different parts of India. The EIC took adavantage of this situation to wring from Mughal and other officials the right to build fortifications and secondly to maintain armed militias for the defense of their own interests. Thus by about 1700 A.D. the EIC possessed three territorial enclaves in three different parts of India, fortifications as well as its own armies/militias. The EIC did not bring about the decline of the Mughal empire, but, used Mughal decline to acquire and enhance its political power and influence within India. The apparent decline of this imperial system created an inevitable fluidity in Indian politics and it stimulated the political ambitions of both the English and the French East India Companies operating in India. The most important steps taken by the EIC towards acquiring political power in India were as follows: 1. Anglo-French wars in the Deccan ( southern India) during the 1740s: The War of Austrian Succession and the Seven Years War in Europe ignited hostilities between the French and English companies in India. Each of these companies used their well-trained militias to intervene in the internal succession struggles within two regional kingdoms ( namely, Hyderabad and Arcot) in Southern India. The French and the English took up the causes of rival claimants to the thrones of both kingdoms. The EIC won all military encounters . This eliminated the French company as rival political aspirants in India and secondly, it allowed the EIC to acquire a degree of control and influencve over the kingdom of Hyderabad. 2. EIC acquires influence in Bengal via the Plassey Conspiracy ( 1757): Bengal ( which in the 18th century referred to a much larger chunk of Eastern India) was a rich, fertile province in which the EIC had a great deal of interest. In 1757, the EIC participated in a conspiracy hatched by the political elites of Bengal against its current ruler, Nawab Sirajuddaula ( 1756-57). The success of the conspirators created a situation in which the EIC gained a very significant amount of political influence over the affairs of this rich kingdom. Some of the most powerful Indian merchants who operated in Bengal had not only been participants in this conspiracy, they had been instrumental in getting the EIC involved in it as well. It has been suggested that the close and profitable relationship that had developed between some of the most largest Indian merchants and the EIC led the former to consciously and actively help the latter to gain significant political power. While the relationship of some Indian merchants with the EIC was undoubtedly strong and close, the view that the EIC?s first step towards an Indian empire were made possible through the collaboration of Indian mercahnts, is too much ofa stretch. Available evidence does not permit sucha conclusion. From 1757 till 1772, the EIC became the virtual power behind the throne in Bengal and seated and unseated a series of weak, puppet rulers on the throne of Bengal. The EIC?s military also became the virtual military in Bengal , the military system of the nawabs became pretty ineffective. The dramatic expansion in the company?s political-military power in Bengal was accompanied by a massive escalation in the volume of private trade carried on by EIC employees as well as their Indian associates. They defied rules and resorted to violence and oppression over Indian merchants, manufacturers and peasants . In 1765, the EIC secured a very important though unusual right. In the Mughal administrative system, the official who, looked after the collection and management of revenues at the provincial level, was called the diwan. In 1765, the EIC ( through judicious pay-offs) persuaded the Mughal emperor to appoint them to the office of the diwan of Bengal. From 1765-1772, the EIC introduced a system called the dual government, under which the governnace of Bengal was split into two parts: the EIC continued to trade and to act as diwan or, the revenue collector of Bengal while the responsibility for maintaining law and order and other governmental functions was left to the powerless nawab of Bengal. This system created a period of serious mis-government and chaos in Bengal. But, it was a very important step in the EIC?s rise to political power: the EIC could now collect and pocket the entire revenues of the extremely rich region of Bengal, this meant that they no longer had to bring treasure from England to buy Indian goods. They used part of the Bengal revenue to purchase textiles, saltpetre etc. This income from Bengal also made it possible for the EIC to finance their trade and other interests in other parts of India. In the 1770s and 1980s, the Bengal revenue financed the long drawn out wars the EIC had to fight against Indian powers such as the Marathas and the kingdom of Mysore in Western and Southern India respectively. The grant of the diwani to the EIC was a negative development for Bengal and the Indian economy. In 1772, the EIC declared itself the sovereign ruler of Bengal. Thus from 1772, the EIC officially became the ruler of a large part of Eastern India and was no longer the defacto political-military authority of this region, which it had been, since 1757. Some scholars have speculated as to what extent private English commercial interests had played a role in bringing about this ?revolution? in Bengal. Between 1757 and 1772, the EIC had had several conflicts with the nawabs of Bengal and with neighboring rulers ( e.g. the Kingdom of Awadh). In some cases, these conflicts were precipitated by aggressive English private traders who were interested in preserving and further expanding their commercial interests. This is however, a difficult question because the English private interests and the corporate interests of the EIC were so closely inter-twined that it is difficult to separate them. Once the EIC became the sovereign government of Bengal, it passed stricter laws prohibiting its employees from enggaing in trade as private merchants. After 1772, the EIC used three tools to acquire its Indian empire: 4. Warfare: the EIC engaged in wars with various Indian powers and the ultimate success of the EIC vis- a ?vis the latter brought large parts of western, central and southern India under its control. The most notable examples of these are: The Anglo-Mysore wars between the EIC and Tipu Sultan, ruler of the Mysore kingdom in 1784 and 1799. The Anglo-Maratha wars between EIC and the Maratha power between 1774 and 1818 The Anglo-Sikh wars between the EIC and the Sikh kingdom in the Punjab between 1845 and 1849. [Beyond the immediate borders of India, the EIC sought to create buffer zones, also under its own control in order to safeguard its Indian empire. In the pursuit of this end, the EIC acquired Burma through a series of wars in the 19th century . The Anglo-Afghan wars in which the British govt of India got involved in the late 19th century, were primarily fought for the same ends as well.] 5. The Subsidiary Alliance: The EIC made strategic use of a kind of treaty called the Subsidiary Alliance with Indian political powers. Typically, by this treaty, the EIC undertook to provide military protection to its Indian ally while the latter agreed to disband its own army and to pay for the upkeep of the EIC?s troops. In many cases, the EIC periodically pressured its Indian ally to increase its financial commitment for the upkeep of the company?s soldiers and if the Indian ruler in question claimed inability to meet the expanded financial demand, the company demanded the secession of tracts of territory from these kingdoms. Over time, due to the operation of these processes, the subsidiary allies of the EIC lost parts of their territories and the revenues associated with them; the stationing of British agents ( called residents) at the courts of Indian rulers also gave the EIC considerable leverage in the internal politics and governance of these kingdoms. The best example of the working of the Subsidiary Alliance is provided by: The kingdom of Awadh in Northern India: This kingdom was a long-standing ally of the EIC ( from 1774 to 1856). The operation of the Subsidiary Alliance (described above) led to the gradual weakening of this kingdom and its ultimate annexation by the EIC in 1856. 6) The Doctrine of Lapse: In the 1850s, Lord Dalhousie, the EIC?s governor-General in India, enunciated this principle by which he claimed that the EIC, by virtue of being the paramount political power within the Indian sub-continent, reserved the right to withold recognition to Indian princely states in which the indigenous rulers had adopted male heirs to succeed them. The EIC used this principle as the rationale for the annexation of a few small princely states such as Satara ( in western India), Jhansi ( in Northern India) etc. --------------------------------------------------------------------------
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