Establishment of the East India Company – The Charter of 1600

Establishment of the East India Company – The Charter of 1600

The Charter of 1600:

The East India Company (EIC)/The British East India Company was an English and later a British Joint Stock Company primarily formed to trade with The Indian Subcontinent, Southeast Asia and also the Qing Dynasty ruled China. The East India Company was originally chartered on Thirty-One December 1600 from Queen Elizabeth I under the name of “Governor and Company of Merchants of London Trading into the East-Indies” to George Earl along with Two Hundred and Fifteen Knights, Aldermen (Elected Municipal Officials) and Burgesses (Freemen of Scotland Representatives).

The Company at one point in time used to account for half of the world’s trade ranging from cotton, silk, indigo, salt, spices, saltpetre, tea, to opium. The Company had begun its operations as a trading company but it soon became interested in politics and to act as an agent of The British Government in India. The Charter was mainly given the Queen assent to meet competition with The Dutch and Portuguese.

The Terms of the Charter:

  • The Charter gave the company permission for traffic along with Merchandise Trade and permission to assemble at any convenient place, to make reasonable laws and ordinances for the good government of the East India Company.
  • It gave exclusive trading rights to The Company.
  • It gave the company the exclusive right to trade in the whole of Asia, Africa and America.
  • The Charter had a life span of Fifteen Years.
  • The Affairs were to be conducted on Democratic lines.
  • No British Subject could carry trade without a license from The Company.
  • To maintain Law and Order on long voyages The Company used the Crown’s powers and thus permitted itself to select a Commander in Chief on each Voyage and that person could punish anyone and set into motion “The Martial Law”.
  • The charter gave the company a monopoly to trade with all countries east of the Cape of Good Hope and west of the Straits of Magellan.

Governance Body:

The Company was governed by a Governor along with Twenty-Four Directors or Committees who were primarily from the Court of Directors. The Court of Directors used to report to The Court of Proprietors, which appointed them.

The First Voyage and its effects:

The First Voyage of East India Company (EIC) started in April (1601) with five ships commanded by James Lancaster and returned with a cargo of pepper, a highly in-demand spice weighing a total of Five Hundred Kilograms. There were many such profitable voyages but there was fierce competition from The Dutch and Portuguese who were already well established in the trading business and Pirate attacks. These increasing problems prompted the Company to shift its focus to Trading of Cotton and Silk from India instead of trading in Spices from India.

The Voyages to India:

The first voyage to India was led by Sir James Lancaster (1601) to Surat where the first British Trading Post in India was established in 1608. In 1610 the first Company factory was established at Machilipatnam along the Coromandel Coast.

Starting of establishments in India:

The East India Company after defeating The Portuguese in the Battle of Swally (1612), at Suvali in Surat gave a major victory to the Company. The Company then requested the Crown to launch a diplomatic mission to the then Mughal Empire Jahangir to gain territory in mainland India. The treaty was that the Company would be given exclusive rights to establish factories and reside there at different locations in return for goods and rarities from European markets for the emperor. The Emperor gave his permission and thus began the arrival of The Company in India.

The Company under the patronage of the Emperor soon established Trading posts at Surat (1619), Madras (1639), Bombay (1668), and Calcutta (1690). By 1647, the company had 23 factories, under the command of a merchant and a governor. The major factories became the walled forts of Fort William in Bengal, Fort St George in Madras, and Bombay Castle in Bombay. Through a series of acts around the year 1670, the company gained rights to acquire territory, mint money, command fortresses and troops, form alliances, indulge in war, and exercise civil and criminal jurisdiction over their acquired territories.

This greatly enhanced the company’s powers. The Company then began to hire Indian people into its Army and in 1763 it had some Sixty-Seven Thousand People under its army which were primarily used for political purposes. Each of the major establishments at Bombay, Madras and Bengal had its own units of infantry, cavalry, artillery, horse artillery units and also a navy.

The Battle which altered the course of Indian History Forever:

After the defeat of the then Nawab of Bengal in the Battle of Buxar, The East India Company was given the right to collect revenue in The Bengal Region the most riches area of India. This Victory changed the course with its focus on gaining territory in India and slowly and steadily it started defeating major rulers. The Battle of Plassey (1757) gave the East India Company a major victory and a puppet government was established on the throne. In the Battle of Buxar (1764) the Nawab of Bengal surrendered the administrative rights of Bengal, Bihar and Orissa to the Company.

The Dissolution of the Company:

The Regulating Act (1733) curtailed many administrative rights of the Company and made Warren Hastings the First Governor-General of Bengal and also gave him rights and power to control the Presidencies at Bombay and Surat. The Company was later dissolved in 1874 after The Sepoy Mutiny (1857) resulted in widespread devastation in India since the mutiny was a direct result of The Company’s policies and the widespread corruption.

After the Rebellion, under the provisions of the Government of India Act 1858, the British Government nationalised the company and took over its Indian possessions, its administrative powers and machinery, along with its armed forces. The Sepoy Mutiny (1857) ended the rule of The East India Company which paved the way for The British Raj period, a period under which India came under direct British colonial rule which continued until India’s Independence (1947).

Author: Samar Jain,

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