Modern India Vol 1 (1700 To 1857)

RANGANATHAN SVN KONDALA'S
MODERN INDIAN
HISTORY
Story of India from 1700 to 1857
Volume 1
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Contents
Modern India - Early Europeans ....................................................................5
The Portuguese ............................................................................................6
Estado da India, 1503-04 .............................................................................8
Later Gov Generals ....................................................................................9
Decline of the Portuguese ...........................................................................9
Impact of Portuguese ............................................................................... 10
The Dutch .................................................................................................10
Dutch East Indies ....................................................................................10
Dutch Decline ......................................................................................... 11
British East India Company ......................................................................... 11
The Company ......................................................................................... 11
Captain Hawkins (1608) ........................................................................... 12
Early English .......................................................................................... 12
Early English Settlements ......................................................................... 13
The Danes ................................................................................................. 13
French East India Company .........................................................................14
British-French struggle for supremacy and Carnatic Wars ................................15
Political Situation in India on the eve of British-French Rivalry ......................15
Difference between nature of early French and British settlement ................... 16
Carnatic Wars: ........................................................................................20
(1)First Carnatic War(1746-1748): ............................................................... 21
Treaty of Aix-la-Chapelle: .....................................................................23
(2)Second Carnatic War (1749–1754): .......................................................... 24
Treaty of Pondicherry(1754) and sacking of Dupleix and its effect: .............. 28
(3)Third Carnatic War (1757–1763): ............................................................ 28
Treaty of Paris(1763): ............................................................................ 30
French Vs English ...................................................................................31
French Colonial Possessions .................................................................. 32
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Systems of Governance ............................................................................32
Difference of Companies .......................................................................... 33
The Role of Navy .................................................................................... 34
English Success in Bengal ......................................................................... 34
Early British Consolidation .......................................................................... 36
Robert Clive and The Dual Government ..................................................... 36
Dual System of Government .....................................................................37
Merits and reasons of the Dual Government ............................................ 37
Demerit of the Dual Government ........................................................... 38
The Regulating Act (1773)........................................................................ 39
Provisions of Act .....................................................................................40
From Diarchy to Direct Control ...................................................................42
Warren Hastings (1772 – 1774) .................................................................. 42
The Rohilla War (1774) ..........................................................................42
The Trial of Nand Kumar 1775 ...............................................................43
Philanthropy of Hastings..........................................................................43
Pitts India Act 1784 .................................................................................. 43
Lord Cornwallis (1787-1793) ..................................................................... 45
Permanent Settlement ........................................................................... 45
Reforms in the East India Company ........................................................ 46
Judiciary Reforms ................................................................................46
Police Reforms of Cornwallis ................................................................. 48
Sir John Shore and Charter Act 1793 ...........................................................48
Charter Act 1793 ..................................................................................48
Lord Wellesley (1798 – 1805) ..................................................................... 49
Fourth Anglo Mysore War..................................................................... 49
Subsidiary Alliance System ...................................................................49
Censorship Act 1799 ............................................................................. 50
Sir George Barlow (Officiating) (1805-1807) ................................................. 51

Mutiny of Vellore 1806 ..........................................................................51
Lord Minto ( 1807 – 1813) .........................................................................51
Minto-Metcalfe Treaty ..........................................................................51
Charter Act of 1813 ............................................................................... 51
Lord Hastings (1812-1823) ........................................................................ 52
Lord Amherst (1823-1828) ........................................................................ 53
Lord William Bentinck (1828-35)................................................................ 54
Abolition of Sati in 1829 ........................................................................ 54
Suppression of Thugs ........................................................................... 55
Judicial Reforms .................................................................................. 55
Charter Act of 1833 .................................................................................. 56
Significance of Charter Act 1833 .............................................................58
Lord Auckland (1836 – 1842) .....................................................................58
Last Mughal Emperor ...........................................................................58
Lord Dalhousie (1848–1856) ...................................................................... 58
Doctrine of Lapse .................................................................................59
Application of the Doctrine ................................................................... 59
Criticism of the Doctrine of Lapse ..............................................................60
Annexation of Oudh 1856 ......................................................................60
Indian Railway Begins Journey 1853 ....................................................... 61
Wood’s Despatch of 1854..........................................................................62
Charter Act of 1853 ............................................................................... 62
New provinces ....................................................................................63
Significance of Charter Act 1853 .............................................................63
Changes and Impact: Indian Economy...........................................................64
Company policy of Merchant Trade ...........................................................64
Trade to Land Revenue ............................................................................ 65
Changing Phases: Colonialism to Administrator ..........................................66
1600-1757 – Precolonial Stage .................................................................... 66

Era of Merchant Capitalism or Mercantilism (1757 to 1813) ...........................66
Industrial Capitalism 1813 to 1857 ............................................................. 70
Changes In Indian Agrarian Structure ........................................................71
New Land Revenue Settlement ................................................................. 71
Early Experiments with Land Revenue .......................................................72
Permanent Settlement (by Cornwallis, Bengal, 1793) .................................73
Ryotwari System .................................................................................. 76
Mahalwari System (Northern India, 1822) ................................................ 77
Economic Impact of Various Land Revenue Settlements ............................... 78
Economic Impact Of British Rule In India ...................................................78
Disruption of Traditional Economy ............................................................ 79
Ruin of Old Zamindars and Rise of New Landed Classes ........................... 79
De-Industrialisation and Ruralisation of Indian Economy .......................... 79
Commercialisation of Agriculture...........................................................80
Commercialisation of Agriculture – Effects ..............................................81
Positive Impacts of Commercialization of Agriculture: .............................. 82
Drain of wealth ...................................................................................... 82
Early Drain of wealth...........................................................................82
Dadabhai Naoroji’s theory of the Drain of Wealth .................................. 83
Factors of External Drain .......................................................................84
Council Bills ........................................................................................ 84
Interest on Foreign Capital Investments .................................................. 85
Foreign Banking ..................................................................................85
Rise of Modern Industries under the British ................................................ 87
Roads and Indian Railways ................................................................... 88
Postal System and Telegraph ................................................................. 88
Press .................................................................................................. 89
New Indian Bourgeoisie ...........................................................................89

Modern India - Early Europeans
From the ancient times, India was the land of wealth and prosperity and was known as Golden
Sparrow. It was all because of its natural resources, the discovery of monsoons in 47 AD by
Hippalus.
All these turned India as the heart of the west and east trade. Lastly, the balance of payment was
always in the favour of India. This wealth and prosperity of India attracted foreigners, which led
to continuous invasion on India. It was a sequential invasion series from the Aryans, Shakas,
Kushanas, Hunas, Turks, Mongols, Mughals, Afghanis, Iranis (Nadir Shah) and now
terrorists are threatening not only India but also this whole world.
In the 16th Century, Europeans appeared as the new contender for Indian Subcontinent and story
of Modern India begins from here. The story started from Crusade leading to Renaissance. The
next important development was geographical discoveries.
Examples:
 1492, Columbus discovered North America.

 1498, Vasco-da-Gama got the direct sea route to Indian Subcontinent via Cape of Good Hope
with the help of Indian merchant Abdul Majid.
This was the beginning of the direct connection between west and east. Portuguese were good
sailors, so they grab the opportunity of east expedition first. So, Portuguese took the initiation and
after their success in Indian Subcontinent Dutch, English and French came to Indian Subcontinent.
In Mid-15th Century, Europeans entered in India. During the 14th and 15th Century Europe was
under the influence of new philosophies of Capitalism and Mercantilism. Therefore, from the
very beginning apart from trade and commerce these European companies had the intention
political conquest. Examples:
 In 1498 CE, Portuguese entered in India and in 1510 their Governor Albuquerque occupied
Goa.
 The year 1636 CE, Portuguese made the attempt to occupy Hooghli but they failed.
 In 1687 CE, Britishers tried to occupy Hooghli. But they also failed because of the presence
of strong Mughal rulers in India like Shahjahan and Aurangzeb.

In the last phase of 17th Century Europeans failed in their political ambitions. Eventually
Europeans became dormant and waited for the appropriate time. They got the right opportunity
on 13th February 1739. It was Battle of Karnal, which showed the loopholes to the Europeans.
Battle of Karnal was the battle fought between Iranian General Nadir Shah and Mughal Emperor
Muhammad Shah ‘Rangeela’. In this battle, Nadir Shah not only defeated Mughal Emperor but
also humiliated him. Nadir Shah plundered India, which includes 70crores in cash, Koh-i-Noor
diamond and Peacock Throne (constructed by Shahjahan).
The victory of Nadir Shah over the Mughal Emperor was a good message for the European
countries. They got the message that “THE BOSS OF THE COUNTRY IS DEAD”. So, once again
they stood up for political ambitions. The Carnatic Wars of southern India gave them this
opportunity in 18th Century.
The Portuguese
The Portuguese were the first ones to arrive on the Indian scene. The reasons for arrival of the
Portuguese in India were both economic as well as religious.
They had come to seek spices especially pepper as well as to destroy the monopoly of Arabs and
Italians over trade with the East

Calicut was usually flocked by the Muslim and Arab merchants from Aden, Turkey, Persia,
Ethiopia, Egypt etc. Even Chinese maintained a factory in Calicut which was called Chinakotta.
Among the Indians the Gujarati merchants were prominent. The trading centers of the South East
Asia were flooded with the merchants from all over the world. The ancient trade routes were in
the hands of the Arab Muslim merchants and the
used to ship their goods by the Persian Gulf to the
Red Sea and so overland to Syria and Egyptian
Ports.
Prince Henry the Navigator: Prince Henry .- of

Portugal, nicknamed the 'Navigator' had become
obsessed with the idea of finding a sea route to
India. Prince Henry died before his dream could
be fulfilled.
Bartholomew Diaz (1487): In 1487 Bartholomew

Diaz reached the southernmost tip of Africa
(which he named Cape of Storms) and became the
first known European to reach the Indian Ocean
from the Atlantic
Vasco da Gama - fleet of Vasco Da Gama had arrived in India on 20 May 1498 at Kappad near
Calicut. Manna Vikrama - Calicut Zamorin with traditional Indian hospitality received him
The result was - Vasco had to return without any concrete result. Further, the Arabs instigated the
Zamorin that he was not a Royal ambassador but only a small time pirate. Thus, the first mission
of Vasco Da Gamma was an utter failure to the extent that it could not produce any tangible results
for the Portuguese. But it was a great leap of the Portuguese, as a new route was found which was
safe from the rival Arabs.
Pedro Álvares Cabral - September 1500, Pedro

Álvares Cabral sailed to India, who had done
a wonder by discovering Brazil on the way.
Pedro established the first Portuguese factory
at Calicut. However Cabral ran into a conflict
with the local Arab Merchants who then
attacked the Portuguese factory at Calicut,
killing more than 50 Portuguese. Outraged,
Cabral captured ten Arab merchants' ships
anchored in the harbor, massacred nearly 600
Arabs on board and confiscated the cargo
before putting the ships on fire.
This is known as Battle of Calicut in which Cabral was defeated by the Arabs and locals. Cabral
started on the return voyage on 16 January 1501. He arrived in Portugal with only 4 of 13 ships on
23 June 1501, defeated and humiliated.

In 1502, Vasco da Gama revisited India - this time the
rulers of Kannur, Cochin and Quilon were sympathetic
to him. Vasco placed a demand that all the Muslims
should be expelled from the area, but this demand was
turned down. In 1503, the 1" Portuguese factory was set
up at Cochin (Kochi). In 1505, the 2"' factory was set up
at Cannanore (or Kannur).
The Portuguese trading points or factories on land were

called Feitorias -these were unfortified trading outposts
which also served as bases for naval fleet called armadas. The early spice trade comprised of
mainly pepper and cinnamon.
Estado da India, 1503-04

The Portuguese State of India was meant to be a governing body of the various Portuguese
fortresses and colonies overseas and it was required to function under a Viceroy. Meaning -
Portuguese would no longer be content with mere spice trade but would set out to establish a
Christian Portuguese state in the East and launch a holy war against Islam there. In 1503 Francisco
de Almeida was appointed the First Governor and Viceroy of the Portuguese India. He was able
to erect some fortresses at Cochin, Cannanore, Kilwa and Anjadiva.
Francisco De Almeida
Almeida was appointed as the first Portuguese Viceroy
of India for a term of three years and sent with
sufficient armed ships to protect Portuguese interests.
He was directed by the government to build such
Portuguese fortresses that would aim to establish
Portuguese control over trade of the Indian Ocean. He
adopted the 'Blue Water Policy' aimed at establishing
naval supremacy of the Portuguese in the Indian Ocean, rather than over land. He is credited with
the construction of Fort Anjediva on Anjediva Island lying at the border of Muslim Bijapur and
Hindu Vijayanagar states. In 1508, Portuguese fleet was attacked by joint Muslim naval force
(Gujarat Sultanate and Mameluk Egyptian fleet) at Chaul and Dabul, with Almeida's son losing
his life in the battle of Chaul Almeida, however, defeated the joint force in the Battle of Diu, thus
establishing Portuguese supremacy over Indian Ocean
Alfonzo-De-Albuquerque (1509-15)
Afonso de Albuquerque was the second governor of the Portuguese India and is known as founder
of Portuguese colonial empire in India. He set up his headquarter at Cochin. Goa was the first part
of India that was colonized by the Europeans but was eventually the last part of India to be
liberated from the Europeans. In 1509, Albuquerque conquered Diu and in 1510 he conquered Goa
from the Sultan of Bijapur. Under Albuquerque, the Portuguese established their domination over
the entire Asian coast from Hormuz in Persian Gulf to Malacca in Malaya and the Spice Islands in
Indonesia. In Bengal, Hooghly and Balasore became the Portuguese trading centres. Starting first

Portuguese Mint in the east. He was able to issue the Gold, Silver and bronze coins which were
based upon the local designs but were engraved with the badge of the Portuguese kings. After
Goa, more mints were established at Malacca (Today a city of Malaysia). Portuguese Cultural
Ambassador: The Portuguese, when established themselves in Goa, started marrying the local
ladies and thus from the times of Albuquerque, mixed marriages started in Goa, combining the
culture of the east with west.
Later Gov Generals
Soares de Albergaria - Soares de
Albergaria was the third Governor of
Portuguese India, who superseded
Governor Afonso de Albuquerque in
1515. He continued the Portuguese war
against the Arabs and Africans in India
and was able to capture Ceylon.
Nino de Cunha (1529-38): He was the

next major Portuguese Governor after
Albuquerque. In 1530, he transferred the
government head office from Cochin to
Goa, thus making Goa the official capital
of the Portuguese in India. Nuno da Cunha was able to bring Mombasa and Mozambique under
the Portuguese circle. During his time, the ruler of Gujarat was Bahadur Shah. In 1529, Nuno was
able to sack Daman and Diu (Damao), which were territories of Bahadur Shah. Later in 1534, he
was able to compel Bahadur Shah to sign the treaty of Bassein. On the basis of treaty of Bassein,
Bahadur shah gave Bassein (modern Vasai and Nallasopara in Mumbai Suburbs) to the
Portuguese. But a year later, the Mughals captured Gujarat and Bahadur Shah, in order to purchase
the support of the Portuguese, gave them Mumbai and surrounding areas.
Decline of the Portuguese

The Viceroys who came after Albuquerque were weak and inefficient. By 1661, Portugal was at
war with Spain and needed support from England. This led to the marriage of Princess Catherine
of Portugal to Charles II of England and as dowry the insular and less inhabited areas of southern
Bombay were handed over to the English (the Portuguese managed to retain all the mainland
territory north of Bandra up to Thane and Bassein). After Albuquerque, the Portuguese
administration in India became inefficient because his successors were weak & inefficient. The
Portuguese officials were neglected by the home government. Their salaries were low which
encouraged them to indulge in corruption and malpractice. The Portuguese proved to be
intolerant and fanatic in matters of religion. They resorted to forcible conversions to the Christian
faith which made the natives hostile. The Portuguese drew a very thin line between trade and
piracy, which also aroused the hostility of the natives.
In 1580 Portugal was merged with Spain which dragged Portugal into Spain's wars with
England and Holland, badly neglecting the Portuguese interest in India.

Portuguese discovered Brazil which diverted their imperial interests away from India. Lastly and
most importantly, the Portuguese power declined in the face of stiff competition from other
Europeans powers who came behind them. The Dutch gained control over Indonesia and the
British over India, Sri Lanka and Malaya.
Impact of Portuguese
The Portuguese began to propagate Christianity in the Malabar and the Konkan coast. Missionaries
like St. Francis Xavier, Father Rudolf & Father Monserette played a leading role in propagating
the Christian faith. In 1540, all temples of Goa were destroyed. The Portuguese brought the
printing press to India. The Bible came to be printed in the Kannada and Malayalam language.
The missionaries undertook research on Indian history and culture. Fa Heras has made a deep
study on the Indus Valley Civilisation. The
Missionaries started schools and colleges along the
west coast, where education was imparted in the
native language. The Portuguese introduced into
India several types of crops, fruits & vegetables which
they had obtained from different countries. These
included-potato, sweet potato, tobacco, corn, lady's
finger, chilly, pineapple, papaya, sapota, leechi,
orange, black pepper, groundnuts, cashew, almonds,
etc.
The Dutch
Dutch East India Company (Vereenigde Oost-Indische Compagnie or VOC in
Dutch) is considered to be the First Multinational Corporation of the World. It was
also the first company to issue stock. It was the first company which was given power
to engage itself in colonial activities including waging a war and execute the convicts,
mint the coins and establish the colonies. This company did wonders in India and Indonesia for 2
centuries but later the pompous acronym of VOC became Vergaan Onder Corruptie meaning
“marred by the Corruption. The Dutch East India Company was created in 1602 as "United East
India Company" and its first permanent trading post was in Indonesia
Dutch had designed the fluitship (the Fluyt) which was much lighter and these ships proved to be
superior to the bulkier and slower Portuguese ships eventually. In 1596, Cornelius de Houtman
was the first Dutch traveler to reach India. In 1602, the Dutch East India Company was formed
and the Dutch Parliament gave it a charter.
Dutch East Indies

The main interest of the Dutch was in the Indonesian archipelago and the Spice Islands and not
India. They soon pushed out the Portuguese from the Malay Straits and the Indonesian Spice
Islands of Java and Sumatra and even defeated English attempts there. However, they discovered
that Indian trade was necessary to carry out trade with South-West Asia, as there was a good
demand of Indian cloth there. In return, Indians demanded pepper and spices. Hence, the credit
of first making 'Indian cloth' as an item of export goes to the Dutch. In India, they established the
first factory in Masulipattanam in 1605, followed by Pulicat in 1610, Surat in 1616, Bimilipatam

in 1641 and Chinsura in 1653. In Bengal they established a factory in Pipli, but it was abandoned.
When the established a factory in Pulicat, in 1610, it became their main center of activities. It was
later known as Fort Geldria.
Dutch Decline
Dutch factories were also established at Kasimbazaar, Karaikal, Balasore, Baranagore and
Golconda. In 1690, the Dutch headquarters were transferred from Pulicat to Nagapattinam. The
head of Dutch factories were called factors who were classified as traders and the Dutch Model of
Trade was based on Cartel or Cooperative System. The Dutch struck many decisive blows to the
Portuguese at Goa, Malabar, Ceylon, Malacca, Colombo and Cochin and virtually replaced the
Portuguese. But meanwhile, an important rival, the English had emerged. The climax of the Dutch
East India Company was in 1669, when it was the richest private company of the world with 150
merchant ships, 40 warships and 50 thousand employees and an army of 10 thousand soldiers. In
India, the most important event was the Battle of Colachel in 1741, which was fought between the
Dutch East India Company and State of Travancore army. In 1759, the Dutch were defeated by the
English in the decisive Battle of Bedara (Bengal), ending the Dutch power in India
British East India Company

In 1599, the first British John Mildenhall came to India via land route and styled himself as the
ambassador of the East India Company. He reached the court of Mughal Emperor Akbar, and had
discussions with him. John Mildenhall was able to interview with the Mughal emperor Akbar.
British East India Company is the oldest among all the similarly formed European East India
Companies.
It was granted an English Royal Charter, under the name "Governor and Company of Merchants
of London Trading into the East Indies" by Queen Elizabeth-I on 31 December 1599. The original
company had only 125 shareholders, and a capital of 68,373 Sterling, which was raised to 429,000
sterling when voyages were undertaken on the first joint-stock account. Thomas Smith was the
first governor of the newly founded East India Company.
James Lancaster was the commander of the first Voyage of the East India Company which sailed
from Torbay towards the end of April 1601. The name of the Ship was Red Dragon. The early
voyages of the Company from 1600 to 1612 were the “separate voyages," twelve in number.
The Company
It was a joint stock company and was known as John Company. The name
"Company Bahadur” in India echoed its authority. When the company was
founded the cradle of commercial activities had already been removed from
Mediterranean to Atlantics by Vasco Da Gama
et al. 1603, Elizabeth I died and James I
succeeded this last Tudor monarch of England
and Ireland. During his time, William Hawkins was sent to the
Court of Great Mughal Jahangir William Hawkins became the first
Englishman ever received by the Emperor of India as the official
representative of the King of England. In 1607, William Hawkins

commanded the ship "Hector" for East India Company on a voyage to Surat and Aden loaded with
letters & presents from King of England James I. He arrived in Surat in August 1608.
Captain Hawkins (1608)

In 1608, Captain William Hawkins was sent as a
representative of the English Company to the Court of
Jahangir to obtain permission to open a factory at Surat. The
English Company was given permission by a royal farman to
open factories on the west coast. But the English were not
satisfied with this concession as they wanted permission for
the whole of the country.
Moreover, Hawkins had to leave Agra owing to Portuguese

intrigue and the English realized that they would first have to
deal with the Portuguese before gaining favours from the
Mughals. In 1611, the English opened their first factory in the
south at Masulipatnam (Machilipatnam). In 1611 itself, the
English defeated the Portuguese in the Battle of Swally Hole near Surat. This convinced Jahangir
and, the English were allowed to set up a permanent factory at Surat in 1613. In 1615, taking the
policy of expansion further, Sir Thomas Roe was sent by King James I as an ambassador to the
court of Jahangir. Roe was successful in obtaining
royal farman permitting the British to trade and
establish factories in all parts of the Mughal Empire.
Early English
English began to feel insecure
in the absence of fortified
settlements and made an
attempt to fortify Surat (in
1625) but the Mughals
frustrated the attempt and
imprisoned the English. The English then decided to shift their focus to
South India to avoid direct confrontation with the Mughals. Conditions
in South India were more favourable to the English as they did not have
to face a strong Indian government there. In January 1615, Sir Thomas
Roe presented his credentials to the emperor Jahangir as the Ambassador
of the King of England. This experienced, firm, courageous, combined
with management skills and clever person, who lived as a resident of Agra till 1619; was able to
swipe out the Portuguese Influence from the Mughals despite of some opposition from Prince
Khurram and Nur Jahan.

Early English Settlements
In 1632, Sultan of Golconda issued a Golden Farman in favour
of the English, permitting them to trade freely from the ports of
Golconda on annual payment of 500 pagodas. In 1633, they
establish a branch factory at Hariharpur, near Balasore in
Orissa. In 1634, by a firman dated February 2, the Company
obtained from the Great Mogul, they got liberty to trade in
Bengal, but their ships were to resort only to Pipli in Orissa.
Around the same time, the Portuguese were expelled for a time
from Bengal.
In 1639, Francis Day was able to obtain Madras on lease from
the Raja of Chandragiri and shifted the centre of their activity
to Madras. The Raja allowed the English to fortify Madras, to administer it and to coin the money
on the condition that the English will pay him half the customs revenue of the port. Thus the
English set up a factory and built a small fort around it called Fort St. George. In 1690, the British
bought the Fort Devanampatnam, near Madras, and renamed it as Fort St David.
In 1651, at Hugli, the first English factory in Bengal was set up upon receiving permission from
Sultan Shuja (second son of Emperor Shah Jahan), the Subahdar of Bengal. In 1658, all
establishments of the Company in Bengal, Bihar, Orissa and Coromandel Coast were brought
under the control of Fort St. George.
In 1690 Job Charnock established a factory at Sutanuti which
was fortified in 1696 and called Fort William.
In 1698 the English Company obtained from Subahdar of
Bengal Azim-us-Shan, the zamindari (i.e. right to collect
revenue) of the villages of Sutanuti, Kalikataand Gobindapur
on payment of rs,200 to the previous proprietors. In 1700, the
Bengal factories were placed under Fort William. Soon the
villages grew into a city known as Calcutta. In 1661, Bombay
was given to the British crown as part of the dowry of Catharine Braganza to Prince Charles II of
England. However it was not delivered till 1665.
In 1664 when Surat was raided by the Maratha swarms under Shivaji, George Oxenden defended
the English factory. The Mughals granted them exemption from the customs for 1 year for this
"brave act". In 1665, Bombay was transferred to East India Company for an annual payment of
10 Pounds to the government. In 1667 Mughal Emperor gave them a Firman to carry out trade in
Bengal. In the same year 1687, the headquarters of the British East India Company was replaced
from Surat to Bombay.
The Danes
The Danes came from Denmark and they were a minor colonial power to set foot in Indian soil.
The Danish East India Company was established in 1616 and they set up trading outposts in 1620
at Tranquebar near Tanjore (Tamil Nadu). In 1755, they founded a colony called Fredricknagore

near Serampore in Bengal. Occupied twice by the English, the Danish colony failed as a commercial
venture. In 1777, the Danish company went bankrupt and Serampore was transferred to the Danish
Crown. However, Serampore became a safe haven for missionaries in India and earned immense
fame for the cultural and educational activities of the missionaries. In 1845, Denmark ceded
Serampore to Britain, thus ending nearly 150 years of Danish presence in Bengal.
French East India Company

The French were the last of the European colonial powers to set foot in India. They were also keen
on profiting from the Asian trade. Jean-Baptiste Colbert founded the French East India Company
in 1664. The initial attempts of the company to found a successful colony on Madagascar, got failed.
In 1667, under Francis Caron, the company established first factory at Surat and second factory
was established at Masulipattanam a year later. In 1674, the François Martin of French East India
Company established a trading center at Pondicherry, which eventually became the chief
French settlement in India. The Dutch captured Pondicherry in 1693 but returned it to France
later. The French acquired Mahe in the 1720s, Yanam in 1731, and Karaikal in 1738.
French also established a factory at Chandranagar in Bengal. A new factory in 1688 was
established at Chinsura but want of support from France brought the Company's affairs in India
to low ebb and the French East India Company felt obliged to cede its right of monopoly to some
enterprising merchants of Saint-Malo. In February, 1701, Pondicherry was made the capital of the
French settlements in India, and François Martin was appointed president of the superior council
and director general of French affairs in India. Martin died December 30, 1706 and this followed a
series of the successors. Till
1720, the factories at Surat,
Masulipattanam and Bantam
had to be abandoned because
of the adverse conditions
back at home.
In 1741, Joseph François
Dupleix began to cherish the
ambition of a French Empire
in India but could not sell the
idea to his superiors. The
series of skirmishes began in
India when the conflict of the
British and French started. In
1744 Robert Clive arrived in
India. This devil British
Officer ruined the hopes of
Dupleix to create a French
Colonial India. In 1761,
Pondicherry was captured by
the British and since then the
French colonies in India have been unimportant

British-French struggle for supremacy and Carnatic Wars
Political Situation in India on the eve of British-French Rivalry
Since the 15th century when Europeans first arrived in India the fight for supremacy between rival
factions became a part of the Indian history. But the Anglo-French struggles should get special
mentions, as their role in shaping the course of modern India is far more important than that of
any other contemporary struggles. The actual onset of the struggles arose from Anglo-French
commercial and political rivalry in India and political rivalry in Europe. In the late seventeenth
and early eighteenth century the French stake in India was not great enough to be worth the
despatch of an English armament. The two companies therefore declared neutrality and went on
trading. But between 1720 and 1740 the French Company’s trade increased ten times in value until
it was nearly half that of the old-established English company.
The stake of both countries in India was now considerable. The British were deeply involved with
indigo, saltpetre, cottons, silk, and spices; they had a growing, trade with China . The value of the
trade was more than ten per cent of the public revenue of Great Britain at that time.
The occasion for intervention arose with Frederick the Great of Prussia’s seizure of Silesia in
1740. In the war of the Austrian Succession which followed (1740-48) Britain and France were on
the opposite sides in the rival coalitions. It is these wars, of wholly European origin, which
provided the political turning-point in the history of modern India.
In the year 1740, six years before the outbreak of war between the English and French in India,
these two nations alone, out of the four chief European nations, who had embarked in Eastern
enterprise, continued to hold any considerable power.
The Portuguese — the first on the scene — had for a century maintained a complete monopoly
of Eastern trade, but their glory had long ago departed. The bigotry and intolerance and cruelty,
which characterized the successors of d’Albuquerque (Portuguese Governor), had long ago met
with their just reward.
The Dutch, who succeeded, in like manner failed to maintain the enormous power which they had
once gained. They brought about their own ruin by a flagrant abuse of the monopoly, which they
had wrested from the Portuguese. Next came the English, who, at this time, still continued to keep
in their own hands the greater share of the traffic between Europe and India; and, some sixty years
after the English, came the French whose commercial success, while not equaling that of the
English, was still such as to make them formidable rivals. Up to this time, English and French had
existed side by side in India, without coming into serious collision, for more than seventy years,
although England and France had been at war with each other for a considerable portion of that
period.
The settlers of the two nations had hitherto pursued entirely independent courses. The policy
adopted by either side, towards the rules and inhabitants of the country, in which the settlements
stood, was neither imitated from nor influenced by that pursued by the other, and the result of this

was an important difference between the nature of English and French power and policy in India,
which vary greatly influenced the character of the subsequent struggle.
It will be necessary to gain a general idea, first, of the political state of India at this period, and,
secondly, of the history of English and French in India up to this date. Mahrathas, a power which,
from small beginnings, had grown until now, on the eve of the French and English struggle, it was
feared more than any other power in India.
The Mahrattas had already more than once dictated terms to the Mughal Emperor of Delhi. They
were one of the chief causes of the disintegration of once mighty the Mughal Empire.
The other chief cause was the Persian invasion under Nadir Shah in 1739, during which the
Persian troops had occupied and devastated Delhi, and taken the Emperor, Mohammed Shah,
prisoner.
Nadir Shah retired only through the persuasion of an enormous bribe. Such attacks affected central
power of Mughal, and lessened its control over the subordinate powers. Each of the chief
subdivisions of the vast Mogul Empire constituted practically an independent power. These
principal subdivisions were called “subahs”, and their rulers “subahdars”.
Under the rule of the subahdars were included various subordinate powers, called by different
names in different parts of India; and, just as the subahdars, when they felt themselves strong
enough, threw off allegiance to the Emperor of Delhi, so did the nawabs and rajas, when an
opportunity presented itself, throw off allegiance to their subahdars.
Of these minor subordinate powers, the one with whom we shall have most to do in British-French
struggle is the nawabs of the Carnatic, in whose dominions by far the greater part of the struggle
was fought out. This nawab, too, was practically independent, and the post, which was
theoretically in the gift of the subahdars of the Dekhan, had become hereditary. Thus, at this period
of Indian history, might was right. The various subordinate powers were divided one against the
other, and were unanimous only in rebellion against the supreme power. Beyond this there was
no common feeling of nationality, no common bond of religion. It was only the existence of such a
state of things which rendered possible the mighty empire which Europeans have established in
India.
Difference between nature of early French and British settlement
Up to this time, however, neither French nor English had attained to any political power. Their
settlements were in no sense of the word political settlements. They were the possessions not of
the French or of the English crown, but of the French or of the English East India Company. They
held the land, on which their factories were built, either as tenants of the native powers, in
consideration of the payment of an annual rent, or as their own property by gift or purchase. In
every case they were directly subject to the native prince, in whose territory such land was
situated.
They were tolerated for the sole reason that their commerce brought an accession of wealth to the
states in which they settled. There would naturally exist a want of favour from the natives on the
part of the Europeans; and the Europeans might either accept this want of sympathy as inevitable

and as not to be overcome, or they might attempt to come to a better understanding with the
natives by respecting native customs and prejudices. As will be seen, the English, on the whole,
followed the former course, and the French the latter; and the importance of this difference is seen
from the fact that, on the eve of the struggle, the English still held aloof, as far as possible, from all
intercourse with native princes, while the French had gained not only the friendship of the royal
family, in whose territory their chief settlement, Pondicherry, was situated, but also the respect of
its foes.
The history of the English in India, from the incorporation of the East India Company, in the year
1600, until the outbreak of war with the French — a period of nearly a century and a half — is little
more than the history of a mercantile body attempting to gain and hold a monopoly. In this attempt
they were brought into collision with both Portuguese and Dutch.
With the notable exception of a short period (in 1664 and 1690), they consistently followed, the
advice given by Sir Thomas Roe, in the year 1615, “ to seek their profit at sea and in quiet trade,
and not to affect garrisons and land wars in India”. The object which brought them to India was
trade, and on this they concentrated all their energies. For this reason they not only abstained from
siding with any of the native parties in their struggles with one another, but they even submitted
to much unjust treatment. Their great wish was, indeed, to be allowed to go their own way in
peace, but they showed again and again that there were limits to their endurance of unjust
treatment even to secure this.
That they were quite prepared to hold their own was shown in 1664, when the Mahratta general,
Sivaji, attacked Surat. On this occasion the natives fled in despair, and the only opposition offered
to Sivaji was by the English at that place, who undertook to defend not only themselves but also
the natives — a piece of bravery in gratitude for which the Emperor Aurangzeb remitted the
greater portion of the duties, which he claimed on the English traffic.
At about 1685-90, a fit of ambition seized the directors of the Company at this time, and the English
in India assumed an offensive attitude towards the native powers. The pretext was the unjust and
cruel conduct of the native powers towards the English in Bengal but it is equally certain that the
expedition was prompted by an ambitious project of establishing an actual English power in
Bengal itself. The expedition failed entirely.
The wrath of the Great Mughal, the Emperor Aurangzeb, was fully kindled, and the English were
expelled from every part of India. They were permitted to return only by making the most abject
submissions. They had received a lesson, which they did not forget for very many years. The
English had been taught, by how precarious their existence in India was, and that they thought
it necessary to possess some stronghold on the western coast, to which they might escape, if
Madras were at any time attacked by an overwhelming force.
In the year 1674, ten years after the foundation of the French East India Company, the French
bought from the Bijapur the land, on which the town of Pondicherry stands. Three years
afterwards, Pondicherry was threatened by the Maratha force under Sivaji, but was saved by the
judicious measures adopted by the governor, François Martin. The tact displayed by the French
on this occasion gained for them the admiration and friendship of the ruler of Bijapur. Not many

years after this, the kingdom of Bijapur was incorporated with the Mogul Empire, and placed
under the rule of the nawáb of the Carnatic.
The first nawáb of the Carnatic, who assumed independent power, was Sadat Alla Khan. With
him the French established friendly relations, but it was with his nephew and successor, Dost Alí,
and with his son-in-law, Chandá Sahéb, that they established that firm alliance, which so greatly
affected their future. Chandá Sahéb especially was an enthusiastic admirer of the French, and
showed, by his subsequent conduct, that he both appreciated their good qualities and had, at the
same time, detected their desire for power in India. This policy, which the French adopted, of
making native alliance the means by which they might ultimately gain their ends, was above all
things unaggressive in character; and so it remained until the time of Dupleix. Every fresh addition
to the power of the French under Martin, Lenoir, and Dumas, was made without striking a blow,
and, in the case of the two first, without making an enemy. During the time that M. Benoit Dumas
held the office of governor-general of the French settlements in India, he maintained a close
friendship with Dost Alí, the nawáb of the Carnatic, and continued to extend this friendship to his
family after his death. By means of this friendship he obtained from the Emperor of Delhi,
Mohammed Shah, through the mediation of Dost Alí, the permission to coin money at Pondichery
— an item of “no” small importance in the growth of French commerce in India. During the
struggle in 1738 for the sovereignty of Tanjore, Sahuji sent to implore the assistance of the French,
offering to grant them, in return, the town of Karikal. Dumas aided him with money and arms,
and he was successful; but, Sahuji evaded the fulfilment of his promise. Here was certainly a great
temptation for the French to employ force; but their friendship with the family of Dost Alí saved
them from the necessity. Chandá Sahéb, who was at this time the raja of Trichinopoly, came
forward and offered to make Sahuji fulfil his promise and hand over Karikal to the French. Early
in 1739, Karikal became a French possession, without the French in India having struck a single
blow to obtain it. Sahújí himself hastened to make friends with them, Soon after this, Sahújí was
driven from the throne by his brother, Pratab Sing, who likewise made a bid for the continuance
of French favors, by adding to the territory given to them, and even advising them to fortify the
towns in their new possessions. The affair of Karikal is a good instance of the policy pursued by
the French governors of this period. They were keen enough to see that diplomacy was all that was
needed to gain everything they could want, and they were prudent enough not to let their anger
at any time lead them to attack any of the native powers. They clearly saw that it was their best
policy to play a waiting game. French had never of themselves attacked a native power, so they
had hitherto remained free from actual attack by a native power. They gained their first experience
of this, just as the English had, at the hands of the Marathas.
These Mahrattas had made another incursion into the Carnatic, and had slain in battle the nawáb
and his second son. The eldest son, Safder Alí, and the sonin-law of the nawáb, Chandá Sahéb,
sought some place of refuge for their families and treasures. Pondichery occurred to both of them.
Dumas presented a bold front to the enemy, Mahrattas raised the siege and withdrew. This
resistance of Dumas may be said to have created a prestige, without the aid of which the glorious
career of the French subsequently would scarcely have been possible. The prestige, which the
French had now gained, was, moreover, of no ordinary kind. They had run an enormous risk
against a most formidable foe, not from any compulsion, but simply because they had determined

to stand by their friends. Henceforth the French occupy a distinctly higher status, and are by all
recognized as by no means the least of the powers of India. Thanks, accompanied by the most
valuable presents, came to the French from all the great native powers, and, what is most
significant as indicating the relation of the French to the native powers, the Emperor of Delhi
himself conferred on the Governor of Pondichery and his successors the rank and title of nawáb,
and the high dignity of the command of 4500 horse. Soon after this Dumas resigned, and left all
the honors he had gained for his successor, Joseph François Dupleix, the Governor of
Chandernagor, a man who possessed an equal knowledge of the state of native affairs, and joined
to this an ambition even greater. His promptitude and boldness formed a contrast to the cautious
policy of Dumas. The policy of Dumas had been essentially one of peace, of interference only when
interference was safe, and of resistance only when the honor of the French name called for it.
Dupleix mingled more freely in the affairs of native princes, and tended more to take up an
independent position. The French had hitherto acted the rôle of humble allies of a native prince.
These positions were shortly to be completely reversed. Dumas had laid the foundation of French
power in India: it remained for Dupleix to raise the superstructure
Dupleix was strongly convinced of the importance of gaining the sympathy of the natives, and
took pains to impress upon them the fact that,
in his capacity of nawáb, he too was an officer
of the Great Mogul. He adopted the Eastern
mode of life and paid and received visits among
the native princes. In this way he learnt the real
weakness of every native state. By skillful and
patient diplomacy, he gained a complete
knowledge of every little move in the intricate
game of intrigue, which was going on all
around, and saw that it would be possible to
take advantage of such a state of things for the
purpose of founding a French empire in India.
In this work Dupleix found an enthusiastic
assistant in his wife, whose intimate
acquaintance with the native languages proved
of the greatest service. Hence, the positions of
English and French in India, with reference to
the native powers, though identical at first, had,
in course of time, become as widely different as
possible. Besides this, there is one fact in
connection with the foundation of the French
East India Company by Colbert, in the year
1664, which distinguished them from the English. This was the proclamation of Louis XIV, to the
effect that a man of noble birth suffered no degradation by engaging in the East Indian trade. The
primary motive for this proclamation was to encourage the noblesse to subscribe to the East India
Company; but may it not also have produced another effect? When we consider what the state of

the French nobility was at this time, the number of its members, its rigid exclusiveness, and the
fact that for these reasons many of its members were doomed to lives of idleness and, at the same
time, of almost abject poverty, we can well understand that full advantage was taken of this outlet
for its energies. Many young scions of the nobility, who had no career to look forward to in France,
proceeded to India in the service of the Company; and may not this sprinkling of men, who had
been taught all their previous life to scorn the pursuits of commerce, and to look upon the career
of a statesman as the ideal of life, help to explain the fact that the French had fully conceived the
idea of political power at a very early period of their career in India.
Carnatic Wars:
The Carnatic Wars were a series of military conflicts in the middle of the 18th century on the Indian
subcontinent. The conflicts involved numerous nominally independent rulers and their vassals,
struggles for succession and territory, and included a diplomatic and military struggle between
the French East India Company and the British East India Company. They were mainly fought on
the territories in India which were dominated by the Nizam of Hyderabad up to the Godavari
delta. It lasted only about fifteen years—from 1746 till 1761. By the fall of Pondichery in this last
year, French power in India was completely overthrown, and the question of supremacy may be
said to have been settled once for all. British East India Company established its dominance among
the European trading companies within India.
The scene of Carnatic Wars, during the first two wars, is the Carnatic, and, during the second war,
it will be necessary also to take a glimpse at the progress of French power in the Deccan. This,
although really outside the struggle, is important, as being the most extensive development of
French power in India. In the third war, the scene shifts for a time to Bengal, and then returns to
the Carnatic. All this time the English in India had remained stationary, steadily plodding on,
wholly intent on fortune-making. It may well be supposed that these peaceful traders viewed with
extreme alarm the ambitious projects of the French, and many were the complaints on this subject
which they made to their masters at home. Numbers of fortunes were made by members of the
companies; but neither of the companies themselves was, at this period, a great success. Neither
company had the insight to see that the remedy lay, for the most part, in its own hands.
Each attributed its failure in commerce to its inability to maintain a strict monopoly of the traffic
between Europe and India. The result was that, instead of reforming its own trade-system, each
thought the great end to be obtained was the destruction of the commerce of its rival; and, to obtain
this end.
Each held out rewards to the servants of the other to desert; and both were continually doing their
best to persuade native powers to harass their rivals by unjust laws, or by exorbitant taxes, and so
to make their position on the continent of India unendurable. Such a state of feeling, existing on
the eve of the struggle, no doubt increased the bitterness with which it was carried on; but was not
in itself the direct cause of the war between English and French in India. The direct cause was the
outbreak of the Austrian war of succession, after the death of the Emperor Charles VI, in 1740.

In this war the English and French first took part as auxiliaries on opposite sides, but eventually
became the principals in the war. Such an event would be cordially welcomed by the English in
India, who saw in it the opportunity, for which they longed, to make an attempt to put a stop to
what they considered as French encroachment.
The French dreaded nothing more at this time. Until recently they had not taken into their
calculations the possibility of war with the English; and most of their possessions were
inadequately defended. Their chief settlement, Pondichery, remained ill fortified; and although
Dupleix, immediately on his appointment as governor, had set himself energetically to remedy
this defect, yet it was two years after the outbreak of the war before the fortifications he had
planned were completed. The French, moreover, had much to lose in case of a defeat. They were
in the course of raising an empire by other means. They had long ago dreamed of the possibility
of driving the English out of India altogether; but they had not proposed to erect this by an actual
conflict with them, at all events until their own power was such as to leave the English little chance
of successful resistance. Their grand idea was power by means of native alliance, of making France
a great power in India. The extension of the European war to India simply upset all their calculation
for the time. Having failed to obtain a treaty of neutrality with the English, the French in India,
with their chief settlement ill fortified, found themselves in extreme peril. The English fleet under
Barnet was on its way, and it was well known that its instructions were, if possible, to annihilate
French commerce. The French government had indeed ordered M. de la Bourdonnais, the
governor of the Isle of France, to proceed with a fleet to the assistance of Pondichery; but, almost
at the last moment, news was brought to Dupleix that de la Bourdonnais had received instructions
to send all his fleet home to France. With this news, the last shadow of hope seemed to have fled.
But now were reaped the first fruits of that policy of friendly alliance which previous French
governors had established with the nawabs of the Carnatic. At the present time the nawáb was
Anwar-ud-din, and to him the French appealed, as feudal lord of both English and French in the
Carnatic, to prohibit the English from attacking their settlements. He followed it promising that
French will also not attack British. The enormous disadvantage, at which the English had placed
themselves by their utter ignorance of native affairs could be seen at this instance.
(1)First Carnatic War(1746-1748):
The First Carnatic War (1746-1748) was the Indian theatre of the War of the Austrian
Succession(1740-1748)( in Europe, fought between the Kingdom of Prussia, Spain, France, and
Bavaria, Sweden etc. on one side and Habsburg Monarchy, England, Dutch Republic, Russia on
the other side). and the first of a series
of Carnatic Wars that established early
British dominance on the east coast of the
Indian subcontinent.
The First Carnatic war in India began with

the appearing of a British Fleet on the
Coromandel Coast. in 1745. The Judicious
French Governor Dupleix induced the

Nawab of Arcot for intervention but the Nawab opted for an impartial policy.
Battle of Madras and Fall of Madras:
British initially captured a few French ships, the French called for backup from Mauritius. In 1746
a French squadron arrived under the command of Bertrand François Mahe de la Bourdonnais.The
French governor of the Isle of France(Mauritius), M. de la Bourdonnais was a man of infinite
resource, and altogether one of the most remarkable men who took part in the war. Some years
before, when the rumor of a probable war in India was first spread abroad, he had impressed on
the French government the importance of providing a strong fleet to protect Pondichery, in case of
an English attack. In this conflict the British and French East India Companies vied with each other
on land for control of their respective trading posts at Madras,Pondicherry, and Cuddalore, while
naval forces of France and Britain engaged each other off the coast. An action took place between
the two fleets in July 1746 off the coast of Negapatam, a Dutch settlement to the south of Fort St.
David. The action was indecisive in itself, but it had the important effect of leaving the Coromandel
Coast clear of the English fleet.The absence of the English fleet from the Coromandel Coast gave
the French, now that they had a fleet of their own, the very opportunity, for which they had been
waiting, to attack Madras.The town itself was almost entirely unprotected by fortifications, and
the strength of Fort St. George, which had been designed as a defence to Madras, was insignificant.
The English had preferred to build Fort St. David, as a stronghold, further down the Coromandel
Coast, rather than make Madras itself secure. In September 1746, the French captured the Madras
almost without any opposition and the British were made prisoners of war. Robert Clive was also
one of those Prisoners. Later, French attack on Fort St. David had failed
Quarrel between Dupleix and Bourdonnais:
After the capture of Madras occurred that celebrated

quarrel between Dupleix and de la Bourdonnais. M. de
la Bourdonnais wishing to allow the English to ransom
the place( as Bourdonnais had accepted a bribe from the
English East India Company), M. Dupleix vehemently
opposing such a course. The results of this quarrel were
most important in so far as they affected the interests of
English and French in India. It caused an antagonism
between the two great French leaders, both of whom
were men of boundless energy and boundless ambition in the cause of French empire in India.
It eventually was the cause of the departure of Bourdonnais from India
The Battle of St. Thome or The Battle of Adyar(4 Nov. 1746):
For some time de la Bourdonnais remained in India, and in possession of Madras; and, meanwhile,
Anwar-ud-din began to think it was time that Madras should be given up to him, as had been
agreed. Dupleix fully intended to do this, but with its fortifications razed. To give over the place,
while de la Bourdonnais remained in possession of it, was of course impossible; but Anwar-ud-
din would not understand this, and surrounded the place soon after the departure of de la
Bourdonnais, and before Dupleix had had time to destroy the fortifications. To hand over the town,

with its fortifications complete, was quite out of the question. Dupleix therefore decided to bear
the brunt of Anwar-ud-din’s wrath; and the result was the celebrated victory of the French at St.
Thomé, on the banks of the Adyar. Small French armies defeated the larger army of the Nawab of
the Carnatic
Importance of the battle of St. Thomé:
1. In the short term Dupleix declared Madras to be French by right of conquest, and appointed
Paradis to command the city. Madras remained in French hands until the end of the war, when it
was returned to the British.
2. It was the first direct collision between a native and a European force. The longer term impact
was to make British and French generals realise that they now had a weapon that could defeat the
massive Indian armies that had intimidated them until this point. This discovery would soon help
transform the balance of power in India.
Treaty of Aix-la-Chapelle:
The power of a small number of French troops over larger Indian formations made Joseph Dupleix
to capitalise on this advantage to greatly expand French influence in south India. In the Second
Carnatic War (1748-1754) he took advantage of struggles for succession to the Nizam of Hyderabad
and Nawab of the Carnatic to establish strong French influence over a number of states in south
India. The British East India Company, in contrast, did little to expand its own influence and only
weakly attempted to oppose Dupleix’s expansive activities. Robert Clive recognized that this
threatened the entire livelihood of the Company in the area, and in 1751 engaged in a series of
celebrated military exploits that cemented British control over Madras by the end of that conflict.
During the late war, the native powers had had an opportunity of learning the vast superiority of
European arms and of European discipline as compared with their own; and they now quite
appreciated the advantages to be gained by an alliance with one or other of the European
communities. They consequently left no means untried, whereby they might attract Europeans to
their side. They offered large sums of money, accession of territory, and everything else, which
could possibly tempt the settlers.

Why British-French fought later in spite of pledging peaceful commerce after First Carnatic
War?
Even if the English and French in India had been really anxious for a lasting peace, it would, under
the circumstances, have been an act of great restraint, to refuse to take any part in native affairs;
and, when once they mixed in the disputes of different native princes, indirect collision with one
another was certain to come sooner or later. But it does not appear that any such eager desire for
peace possessed them. The great reason, however, which rendered it so difficult for them to refuse
the prizes held out as the reward of their assistance, was the great number of troops, which had
been gathered together in India in the late struggle. These were far more numerous than was
necessary for their safety, and were, besides, the source of no inconsiderable expense. Two
important factors: (1)The accession of troops as supplying the power, and (2)the prestige they had
gained in the mind of native rulers as supplying the inclination, to take part in the complicated
game, which the native powers were playing. It resulted in further wars
(2)Second Carnatic War (1749–1754):

The inducements to interfere in the concerns of native powers were too strong to be resisted by
either French or English. The first English interference was for the sole purpose of gaining a
convenient harbour; the first French interference was for the sole purpose of placing over the subah
of the Deccan, and its subordinate division the Carnatic, two claimants, who should be indebted
for their success to French arms, and who should consequently become puppets in the hands of
French diplomacy. It was only at a later stage, when their interests clashed, that they consistently
took opposite sides in every struggle. It
was still later, when war broke out once
more in Europe, that they threw off all
disguise, and fought openly as principals.
The English were the first to act. Sahuji,
who having been driven from his
throne of Tanjore, by his brother Pratab
Sing, now offered the town and the
splendid harbour of Devicottah to the
English if they would assist him in the

recovery of his throne. The English captured Dévicottáh, without the performance of their part of
the bargain. Never perhaps has every idea of justice been more completely set aside for interest.
Struggle of Succession of Nizam-ul-Mulk of Hyderabad(Deccan) and Stuggle for throne of

Nawab of Arcot(Carnatic) :
After the death of the Nizam-ul-Mulk(Subedar) in 1748, the Nizam of Hyderabad, (Deccan) Asaf
Jah I a civil war for succession, now known as the Second Carnatic War, broke out between Nasir
Jung, the son of the Nizam-ulMulk, and Muzaffar Jung, the grandson of Nizam-ul-Mulk.
At the time of the súbahdár’s death, Muzaffar Jang was absent, while Nasir Jang possessed the
great advantage of being on the spot. Muzaffar Jang’s first thought was of the Marahtas, and he
went to Satara to negotiate with them, with the object of gaining their assistance in his contest with
his uncle, Nasir Jang. At Satara, Muzaffer Jang met Chandá Sahéb, member of the royal family of
the Carnatic. Chandá Sahéb was at the present time living at Satara as a prisoner of the Mahrattas,
who, in 1741, had invaded the Carnatic and taken the town of Trichinopoly, of which he was raja.
At the time when Chandá Sahéb was made prisoner by the Mahrattas, the nawáb of the Carnatic
was his father-in-law, Safder Alí, who had since been assassinated; and, at the present time,
another family was ruling over the Carnatic.

This opened a window of opportunity for Chanda Sahib, who wanted to become Nawab of
Arcot(Carnatic). He joined the cause of Muzaffar Jung and began to conspire against the Nawab
Anwaruddin Muhammed Khan in Arcot. The French allied with Chanda Sahib and Muzaffar
Jung to bring them into power in their respective states. But soon the British also intervened. To
offset the French influence, they began supporting Nasir Jung and Muhammad Ali Khan Walajah
(son of the deposed Nawab Anwaruddin Muhammed Khan of Arcot).
Muzaffar Jang, Chandá Sahéb, and their French allies first set about the conquest of the Carnatic,
and in one battle there fell the nawáb, Anwar-uddin, and his eldest son, while the younger son,
Mohammed Alí, saved himself by flight, and shut himself up in Trichinopoly. Thus, Chandá Sahéb
was freed from all rivals; and at Arcot, soon after the battle, Mozaffer Jang proclaimed himself
Nizam(subahdar) of the Deccan(Hyderabad), and confirmed Chanda Saheb, as his subordinate, in
the office of nawab of the Carnatic. Hence, Initially, the French succeeded in both states in defeating
their opponents and placing their supporters on thrones in 1749. But amidst all this plotting and
counter-plotting, it was impossible that French and English could remain long, without coming
into indirect conflict.
The difference between them was, that Dupleix, who professed to be no soldier himself, had at
hand no generals who were competent to carry out his designs; while, on the other side, Saunders,
the English Governor of Madras, could intrust his plans to great soldiers like Lawrence and Clive,
with the certainty that they would be fully carried out. British allied with Muhammed Ali and by
allying themselves with Mohammed Ali, the English had also allied themselves with Nasir Jang,
the claimant to the subah of the Deccan, with whom Mohammed Ali had naturally made common
cause. We have then two triple alliances: Mozaffer Jang, Chandá Sahéb, and the French, on the one
side, against Nasir Jang, Mohammed Alí, and the English, on the other. The most formidable
member of this latter alliance was Nasir Jang. The very news of the approach of his vast army had
caused a panic among the French allies and they had to retreat. This event had consequences more
important than a mere retreat of the French contingent. Muzaffar Jang, in despair, decided to trust
himself to the clemency of his uncle, Nasir Jang, and surrendered himself on condition that his life
should be spared. Chanda Saheb, on the contrary, decided to trust still in the French. The recent
retreat of the French had certainly inflicted considerable disaster on their plans; but Dupleix was
too skillful a diplomatist to let the enemy see his weakness. He led a plot. This was a plot with
the Patan nawábs, who commanded an important portion of forces of the súbahdár. These Patan
nawábs now revolted; and, in the revolt, Nasir Jang was shot through the heart. Muzaffar Jang was
taken from captivity, and proclaimed súbahdár in his stead. Thus the diplomacy of Dupleix had
once more made the French party triumphant.
Mozaffer Jang was installed as subahdar of the Deccan, and Dupleix himself was appointed, by
the subahdar, governor over all the country south of the river Kistna as far as Cape Comorin. The
gift of the nawab-ship to Dupleix was nothing but a gift to the giver, for it was to Dupleix that
Muzaffar Jang owed his subah.The great French general, M. Bussy, accompanied the new subahdar
to his capital, Golconda(Hyderabad). Dupleix was one of the most consummate masters of intrigue
that ever lived, and prepared himself beforehand for every event, which the future might bring
forth. Knowing every little feeling of disaffection among the followers of the súbahdár, he knew

both how to repress and how to use such to his own ends. After Mozaffer Jang was slain in another
revolt of the Patan nawabs, M. Bussy released from captivity Salabat Jang, a brother of Nasir Jang,
and made him subahdár, with the usual result of a fresh and more emphatic confirmation of all
the French powers and privileges.
All this time, the English held in the Carnatic only Madras, Fort St. David, and Davicottah; and
their ally, Mohammed Ali, was on the point of surrendering to the French.He, however, kept
adding one stipulation after another to the proposals for surrender: and, when these at last
obtained the consent of the French, and had been ratified by the subahdar, he changed his mind,
broke off the negotiations, and determined to hold out to the last in Trichinopoly. Nothing in the
history of the struggle of French and English for supremacy in India can be more important than
this decision of Mohammed Alí. British listened to Mohammed Alí, and dispatched forces to aid
Trichinopoly. And now comes the great achievement of Robert Clive, which made his name
famous at once and for ever— the capture and subsequent defence of Arcot.The allies of
Mohammed Ali, in addition to the English, had been the rajas of Tanjore and Mysore.
The Siege of Arcot (1751):

In 1751, Robert Clive and Major Lawrence led British troops to capture Arcot from Chanda Saheb.
Whole French forces under General Law trapped in island of Seringam, and Chanda Saheb
surrendered. By the successful resistance
of Trichinopoly, and by the successful
military operations of the English and their
allies, the aspect of affairs in the Carnatic
was completely changed once more. The
French, before the siege, had been all-
powerful. Now the claimant, whose cause
they had advanced, was no more; and they
themselves, after suffering defeat after
defeat, were at last most seriously
weakened by the capture of a great portion
of their army by the enemy. The Siege of
Arcot (1751) was a heroic feat, more
important than the Battle of Plessey. The
blame of all this lies with the leaders of the
French forces at this time. They had not
one really first-class leader except Bussy,
who was at the court of the súbahdár, while the English had at least two, Lawrence and Clive. The
French had at their head in India (Depleix) one of the most far-seeing statesmen, and one of the
most skillful diplomatists, that ever lived, but he did not combine, like Clive, the qualities which
make a good soldier with these. The result of the raising the siege of Trichinopoly was of the utmost
importance to the English.. Clive’s success led to additional victories for the British and their
Nizam and Arcot allies.

Treaty of Pondicherry(1754) and sacking of Dupleix and its effect:
The war ended with the Treaty of Pondicherry, signed in 1754. Muhammad Ali Khan Walajah was
recognized as the Nawab of Arcot. It laid down emphatically, that the two companies should
“renounce for ever all Mogul dignities and governments, and should never interfere in the
differences that might arise among the princes of the country. The treaty, by its very nature,
entailed a vastly greater sacrifice on the French than on the English.The real grievance in the treaty
was the proposal to arrange the possessions of the two communities on the principle of equality.
This was quite unnecessary, and proved one of the chief means to defeat the end of the treaty. The
French lost too much by this article to bear it patiently. The position of the French at the court of
the subahdar(Hyderabad )remained unaltered. Had M. Bussy been suddenly withdrawn at this
time, the result must have been most disastrous. The French power alone at the court of the
subahdar prevented a general conflagration. The French leader Dupleix was asked to return to
France. The directors of the French East India Company were dissatisfied with Dupleix’s political
ambitions, which had led to immense financial loss. In 1754, Charles Godeheu replaced Dupleix.
The French had hoped for great things from Dupleix, and for a great accession of wealth to the
Company. It has been truly said that, at this period(during Dupleix), France was disgraced at home
and all the world over except in India. As long as they saw any prospect of this, they aided him.
They became impatient; and at length decided

to abandon all such designs, and make an effort
to return to a purely commercial status,
uninterrupted by any further interference in
native affairs. When the English agitated for his
recall, it was agreed to without much difficulty.
The treaty of Pondichery, and the recall to
France of M. Dupleix, who was doomed to
suffer not only disappointment but insult, from
the masters he had attempted to serve only too well, mark the end of a war which is in most
respects by far the most important, and the most interesting of the three carnatic wars. It marks the
almost complete success, followed by the complete discomfiture, of the designs, which the French
had persistently attempted to carry out for so many years. On the other hand, it marks a distinct
growth in the policy of the English.
(3)Third Carnatic War (1757–1763):

No treaty, such as the treaty of Pondichery, by which the one side gains everything, and the other
side loses everything, can ever hold for a great length of time, unless the gaining side possesses
power sufficient to keep the losers in absolute subjection.
New French governor, M. de Leyrit:
After the return of Godeheu to Europe, however, there came out to India, as French governor, M.
de Leyrit, who was by no means so eager to carry on pacifist policy. With the English openly

disregarding the treaty of Pondicherry, he determined that the sacrifice, which the treaty
demanded of French interests, was impossible.
Outbreak of Seven Years’ War in Europe
The outbreak of the Seven Years’ War in Europe led to open conflict between French and British
forces in India. The Third Carnatic War spread beyond southern India and into Bengal where
British forces captured the French settlement of Chandernagore (now Chandannagar) in 1757 just
before Battle of Plassey. By capture of Chandernagore, French power in Bengal was destroyed.
Circumstances had prevented Bussy from marching from the Deccan to its assistance. A very short
time after this, at the battle of Plassey, a little band of Frenchmen, had taken service with Suraj-ud-
Dowlah but French power was no more. Battle of Plassey, from which the origin of our Empire in
India is usually dated. It was, first of all, a struggle between the English and the ruling native
power. It is true that, in the course of this struggle, the French power in Bengal, which, was never
of great importance, was utterly swept away; but the destruction of the French power was not the
primary object of the English attack. After the defeat of the subahdar, Suraj-ud-Dowla, the English
nominated and set up in his place a súbahdár of their own; and, as was inevitable, the supremacy
of this subahdar was equivalent to the supremacy of the English, just as we have seen that, in the
Deccan, the supremacy of Salabat Jang was equivalent to French supremacy. Here in south, Still,
with everything against him, the proceeding of French General Lally was, for a time, like a
triumphal procession. Fort St. David fell, and province after province became the property of the
French. The English were quite reduced to the possession of Madras; and, had the French
succeeded in their attack on this place, English power in the Carnatic would have been a thing of
the past. The English forces were, however, concentrated here; and the conduct of the siege by the
French was, for various reasons, feeble. All this time Clive remained in Bengal. The state of that
province was as yet too unsettled to allow of his leaving. He, however, created a diversion by
sending one of his best generals, Colonel Forde, to attack the French possessions in the Northern
Circars. This proved itself, a grand success. Forde made a midnight attack upon Masulipatam,
which fell, and with it 3000 Frenchmen as prisoners of war. Such an event had the usual effect on
the native allies. On his arrival at Pondichery, Count Lally had thought fit to withdraw Bussy from
the court of the subahdar of the Deccan;(which was a mistake) and now the subahdar, Salabat Jang,
deserting the French and made an agreement with Forde to expel the French altogether from the
Deccan, and to grant certain districts, which had been in the possession of the French, to the
English.
Battle of Wandiwash(1760):
The war was decided in the south, as British commander Sir Eyre Coote decisively defeated the
French under the Comte de Lally at the Battle of Wandiwash in 1760. The great battle of
Wandewash, in comparison with which, all the previous battles in India appear insignificant, from
the fact that so great a number of Europeans on each side here met in conflict. The result was a
complete English victory After Wandiwash, the French capital of Pondicherry fell to the British in
1761. While in most respects, the powers, which the two nations had, were not dissimilar in point
of strength, there was one weapon, which, for the greater part of the struggle, the French used with
great effect, and which the English precluded from using at all. This was the knowledge of all the

arcana of native politics, which brought to its possessors the power of pitting one native prince
against another to their own advantage. Even had the English acquired this knowledge, the putting
of it into practice could only have been brought about by a determination to gain political and
territorial power for themselves, as the French had determined.
Treaty of Paris(1763):
The war along with Seven Year War concluded with the signing of the 1763 Treaty of Paris, which
returned Chandernagore and Pondicherry to France, and allowed the French to have “factories”
(trading posts) in India but forbade French traders from administering them. The French agreed to
support British client governments, thus ending French ambitions of an Indian empire and making
the British the dominant foreign power in India.
Reasons for defeat of French:
Certainly, on the English side, great men like Lawrence, Clive, Eorde, Coote, and Saunders. But,
much as British owe to such men, it is impossible to conceal the fact that, to a very great extent
indeed, the success of the English was due to the misfortunes of the French. The foes of the French
were, in very truth, those of their own household: they were the French government and the
Directors of the French East India Company. When every English place on the Coromandel Coast,
with the exception of Fort St. David, was under French — the French government agreed to the
terms of the treaty of Aix-la-Chapelle, which directed that a mutual restitution of all persons and
places taken in the war should be made. French influence in India was so great, that one Frenchman
guided the counsels of subahdars and nawabs, and even influenced those of the Great Mogul
himself but the French Company, sighing because of a diminished revenue, and the French
government, abjectly cringing before the wrath of England, were ready to give up all their
influence, and to recall and treat with contumely the Great Governor, Dupleix, who had spent life
and wealth for the glory of France. Against odds like these not even a Dupleix, a Bussy, or a Lally,
could succeed. They had conceived a project too vast for the comprehension of either the debased
government of Louis XV, or the Directors of the East India Company. The most disastrous blow
was therefore struck at French power at the conclusion of the second Carnatic war. Previous to the
Treaty of Pondichery, the chances of ultimate French success were overwhelming. The grand
outline was already sketched. The master-mind of Dupleix had every plan in mind. At a critical
moment the master-mind was removed; the policy which had achieved such triumphs was
abandoned. For France it was unfortunate that a misfortune like that of the capture of Law’s army
and the death of Chanda Saheb should have resulted in their abandonment. The disaster, though
severe, need not have been more than temporary. It most certainly had not proved the destruction
of French hopes, The English were still in a most perilous position. From a French point of view,
the great difficulty was still the status of Mohammed Alí; and Dupleix would have found some
mode of settling this question. The whole state of India was, in fact, ripe for the exercise of that
power in which he excelled; and it can scarcely be doubted that he would have taken advantage of
Maratha and Mysorean affairs to establish French power more securely than ever. The great
victories of Dupleix were due to moral rather than to physical force; but it was precisely this fact
that his masters at home were incapable of understanding. The third period of the war was one, in
which France possessed no advantage even in the Carnatic; and, even if Lally had proved

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completely victorious here, even if French power in the Deccan had been allowed to remain and
to become consolidated, the English now possessed a stronghold in Bengal, (which generated a lot
of revenue and trade in contrast to Deccan) from which it would have been difficult to expel them.
As time went on, the question of French or English supremacy in India was limited to an ever-
decreasing area. Certainly, the Carnatic still continued to be debatable ground; but the struggle,
during the third war, was one of union(Britain) against division(French), and its result was such
as might naturally have been anticipated.
French Vs English
Q. Why did the French fail in India and English Succeed in India ?
In the year 1740, six years before the outbreak of war between the English and French in India,
these two nations alone, out of the four chief European nations, who had embarked in Eastern
enterprise, continued to hold any considerable power. The Portuguese - the first on the scene - had
for a century maintained a complete monopoly of Eastern trade, and had raised up on the continent
of India itself a power such as none of their European successors attained for a century and a half
after their downfall. But their glory had long ago departed. The bigotry and intolerance and
cruelty, which characterized the successors of d'Albuquerque, had long ago met with their just
reward. The Dutch, who succeeded, in like manner failed to maintain the enormous power which
they had once gained. They brought about their own ruin by a flagrant abuse of the monopoly,
which they had wrested from the Portuguese. Next came the English, who, at this time, still
continued to keep in their own hands the greater share of the traffic between Europe and India;
and, some sixty years after the English, came the French whose commercial success, while not
equaling that of the English, was still such as to make them formidable rivals.
Up to this time, English and French had existed side by side in India, without coming into serious
collision, for more than seventy years, although England and France had been at war with each
other for a considerable portion of that period. The settlers of the two nations had hitherto pursued
entirely independent courses. The policy adopted by either side, towards the rules and Inhabitants
of the county in which the settlements stood, was neither imitated from nor influenced by that
pursued by the other, and the result of this was an important difference between the nature of
English and French power and policy in India, which ,greatly influenced the character of the
subsequent struggle. In fact, this distinction, which was doubtless to a great extent the outcome of
circumstances acting on the different national temperaments, made the contest an unequal one at
the very outset, by placing the combatants on entirely different levels; and, had it not been for the
preponderating influence of external causes – causes beyond the control of the settlers, whether
English or French - the result of the contest would, in all probability, not have been what it was.
The Anglo-French rivalry in the Carnatic that lasted for about two decades with short intervals of
peace at last decided once for all that the French were to be the dependants of the English in India.
The career of the French in India has been pictured by Malleson in the following words: "Beginning
with small means, then suddenly astonishing the world by its dazzling promise, the venture of the
French in India was destined to end thus early in humiliation and failure". It was the sad fate of
France in this, the most unfortunate of her wars to be disgraced on the continent and to lose
simultaneously her possessions in the East and the West." Though the Treaty of Paris, 1763,

accorded to the French the status quo as it stood in 1749, there was a marked decline in the position
and status of the French in India. They were no longer masters, only subordinates, whose existence
in India depended upon the goodwill and kindness of the English.
Col. Malleson writes, "We will still be forced to lay the chief blame at the door of France, on the
shoulders of the sensual monarch under whose rule the resources of the kingdom were so lavishly
wasted and misdirected. Whilst English India received plentiful supplies of men and ships in
abundance and thought herself hardly used, French India received from the mother country
scarcely more than two millions of Francs! There could be but one result to such a mode of
supporting a colony and that result appeared on 16th January 1761."
French Colonial Possessions
The continental ambitions of France in the 18th century considerably strained her resources. The
French monarchs of the time were fighting for "natural frontiers" for their country which meant
acquisition of new territories towards the Low Countries, extension of the frontier to the Rhine
and towards Italy. Such expansionist schemes involved that country deeper and deeper into the
political muddle of Europe, taxed her energies and kept her constantly at war with the states of
Europe. France cared more for a few hundred square miles of territory on her frontier to bigger
stakes in North America or India. France attempted simultaneously the difficult task of
continental expansion and colonial acquisitions. This divided her resources and made her
unequal to the task in facing her adversaries. It was the misfortune of France that she gained
almost nothing on the continent and lost her colonial possessions also. England, on the other hand,
did not covet an inch of European territory. A part of Europe, England felt herself apart from it.
England's interests in Europe were mainly confined to the maintenance of a balance of power
in that continent. England's ambition was mainly colonial and in this single-minded objective she
came off with flying colours. She won the struggle both in India and North America and worsted
off France in both these regions.
Systems of Governance
French historians have rightly attributed the failure of France in the colonial struggle to the inferior
system of the government prevalent in France as compared to the English system of government.
The French government was despotic and depended on the personality of the monarch. Even

under Louis XIV, the Grand Monarque, the system was showing serious cracks. The numerous
wars that Louis XIV waged sapped the vitality of the state, ruined her financial resources and made
French power look like an inflated balloon. The deluge followed close on his death.
His weak and sensual successor, Louis XV frittered away the resources of France upon his
numerous mistresses and other favourites like dancers and hair-dressers. England, on the other
hand, was ruled by an enlightened oligarchy. Under the rule of the Whig Party, England took great
strides towards a constitutional set-up, reducing the British realm into "a sort of a crowned
republic." The system showed considerable vitality and grew from strength to strength. Alfred
Lyall emphasises the rottenness of the French system of Government when he writes: "India was
not lost by the French because Dupleix was recalled, or because La Bourdonnais and D'Ache both
left the coast at critical moments or because Lally was headstrong and Intractable. Still less was the
loss due to any national inaptitude for distant and perilous enterprises in which the French have
displayed high qualities ... It was through the short-sighted, ill-managed European policy of Louis
XV, misguided by his mistresses and by incompetent ministers, that France lost her Indian
settlements in the Seven Years War."
Difference of Companies
The French Company was a department of the state. The Company had been launched with a
share capital of 5.5 million livres out of which the monarch subscribed 3.5 million livres. Its
directors were nominated by the king from the shareholders and they carried on the decisions of
two High Commissioners appointed by the Government. Since the state guaranteed dividend to
the shareholders, the latter took very little interest in promoting the prosperity of the Company .
So great was the lack of public interest that from 1725 to 1765 the shareholders never met and the
Company was managed as a department of the state. Under these circumstances the financial
position of the French Company progressively deteriorated. At one stage the resources of the
Company dwindled to such a low ebb that it had to sell its trading rights to a group of merchants
from St. Malo for an annual payment. From 1721 to 1740 the Company traded on borrowed capital.
Constantly propped up by subsidies from the royal treasury, the Company was kept going by
monopoly of tobacco and gambling in lotteries. Such a company was ill-equipped to support the
ambitions of Dupleix or finance his expensive wars. The English Company, on the other hand,
was an independent commercial corporation. While this Company could not remain altogether
unaffected by the political upheavals in England, the interference of the government into its day-
to-day affairs was very little. Whoever controlled the administration in England, the King or
Parliament, there was great interest in the ruling circles for the well-being of the Company.
Compared to the French Company, the English Company was financially sounder; its trade was
far more extensive and business methods better. The directors of the English Company always
emphasised the importance of trade. With English trade came first and politics later on. The
English Company earned enough to finance its wars. It has been estimated that during 1736-1756,
the total sales of the English Company amounted to £ 41,200,000 as compared to the total sales of
Indian goods in France which were approximately £11,450,000 during the same period. Financially
the English Company was so rich that at one time it was in danger of being regarded as a milch
cow by the Government of England. In 1767 the English Company was asked to pay £400,000 a
year to the British treasury. There was even talk of using the surplus funds of the Company in

liquidating the national debt of England. When Dupleix inaugurated the policy of making
political gains to compensate for the declining profits of the French Company he took the first step
towards its decline.
The Role of Navy

The events of the Carnatic Wars amply demonstrate how the fortunes of the two Companies waxed
and waned with their strength on the seas. During 1746, French successes on land followed her
naval superiority along the Coromandel Coast. True, the English naval power did not assert its
superiority during the few years following 1748, more because England and France were officially
at peace. Dupleix's astounding successes were won during 1748-51 when the English navy was
temporarily out of action. The naval superiority of England during the Seven Years, War placed
Count de Lally at a grievous disadvantage and he could not hope to repeat the exploits of Dupleix.
The retirement of French fleet under D' Ache from the Indian waters left the field clear for the
English and their final victory was no longer in doubt. During the Austrian War of Succession
French maritime strength was so greatly reduced that, according to Voltaire, she was left with no
warships during the Seven Years' War. Pitt the Elder made the maximum use of the superiority of
England on the high seas. Superior naval force enabled the English East India Company to keep
open her communications with Europe, cover her operation on land in the Carnatic by supplying
reinforcements from Bombay and Calcutta and cut off and isolate French force in the Carnatic from
the rest of the world. Superior maritime strength proved to be England's most powerful weapon
in the struggle for colonial supremacy. Even if other factors were equally proportioned navy wo
Id have the casting vote.
English Success in Bengal

The English conquest of Bengal in 1757 was undoubtedly of great significance. Besides enhancing
the political prestige of the English Company, it placed at its disposal the vast resources in wealth
and manpower of Bengal. The financial resources of the English Company considerably improved.
At a time when Count de Lally was ill at ease as to how to make payments to his troops, Bengal
sent not only troops but supplies to the Carnatic. The Deccan was too poor to finance the political
ambition of Dupleix or military schemes of Count de Lally. True, Bussy had obtained the cession
of the Circars from the Nizam, but there is no evidence of any remission of funds to Southern India
except the lakh and a half of rupees sent by Bussy to Lally in 1758. Decidedly the power of superior
finance was on the side of the English. V. A. Smith emphatically declares: "Neither Bussy nor
Dupleix singly, nor both combined, had a chance of success against the government which
controlled the sea routes and the resources of the Gangetic valley. It is futile to lay stress upon the
personal frailties of Dupleix, Lally or lesser men in order to explain the French failure. Neither
Alexander the Great nor Napoleon could have won the empire of India by starting from
Pondicherry as a base and contending with the power which held Bengal and command of the
sea." "Dupleix", writes Marriott, "made a cardinal blunder in looking for the key of India in Madras;
Clive sought and found it in Bengal."
The superior political leadership and military generalship of the English in India stand in striking
contrast to that of the French. Perhaps Dupleix and Bussy were in no way inferior to Clive;
Lawrence and Saunders. The comparison ends there. Dupleix and Bussy could do everything but

enthuse the French with their own "spirit; they had to depend on incompetent subordinates. Count
de Lally who came to India at a critical moment was headstrong and of a violent temper. He looked
upon the Company's servants of Pondicherry as a set of dishonest rogues whom he hoped to set
right by threats and punishment, He so greatly alienated his compatriots that they openly rejoiced
when the English defeated him. The English, on the other hand, were lucky in procuring the
services of capable commanders and very many servants far superior to any of the subordinates
"of Dupleix and Bussy. Writes Malleson: "The daring of Lawrence, the dogged pertinacity of
Saunders" and his Council, the vigour and ability of Calliaud, of Forde, of Joseph Smith, of Dalton,
and of many others, stand out in striking contrast to the feebleness, the incapacity, the indecision
of the Laws, the D'Anteuils, the Brenniers, the Maissins and others whom Dupleix was forced to
employ."
Thus, the French failed to realise the dream of building up a French Empire in India. The debacle
of the French Company led Voltaire to make this trenchant criticism: "At last there was left to
the French only regret for having spent immense sums for over forty years for maintaining a
company which never made the least profit, which never pays to its shareholders and creditors
from the profits of its commerce which in its Indian administration lived only in secret
brigandage".

Early British Consolidation
Robert Clive and The Dual Government
Robert Clive (born 1725) was appointed as Clerk in the service of the East India Company in 1743.
The Seize of Arcot (1761) during Second Carnatic War gave a major boost to his career and he
became deputy governor of Fort St. David at Cuddalore in 1755. From 1758 to 1760 and then 1765
to 1767, he remained Governor of the Presidency of Fort William. During his tenure, British East
India Company won battle of Plassey, Battle of Chinsura and Battle of Buxar. These battles paved
the way for British conquest of Northern India. Clive also imposed Dual system of administration
in Bengal which ruined its economy.
On October 22-23, 1764, the decisive Battle of Buxar was fought between British on one side and
combined forces of Mir Kasim, Mughal emperor Shah Aalam II and Shuja-ud-Daula at other side.
However, the three separate allies could not cooperate with each other and were defeated. This
war battle was won in absence of Clive who was in England at that time. The British forces were
commanded by Major Hector Munro. After this battle, Shah Aalam II submitted to the British.
Nawab Shuja-ud-Daula fled from the scene and took refuse to Rohilla. Mir Kasim also fled and
died a few years later in extreme obscurity
In 1765, Clive returned styled Lord Clive as Governor General of Bengal for the second time. By
this time, the British had shown their military supremacy in India for, the Battle of Buxar was tough
contested bout, than the Battle of Plassey, which was won by deceit.
The important outcome of the Battle of Buxar was the Treaty of Allahabad which was signed
between Lord Clive and Mughal Emperor Shah Alam II, who had submitted to the British in the
battle. As per this treaty:
 Mughal Emperor granted Fiscal Rights (Diwani) or right to administer the territory and
collect taxes to the East India Company at Bengal, Bihar and Orissa. Thus, the British became
the masters of fate of the people of Bihar, Bengal and Orissa and now they would collect the
revenue.
 In lieu of this Right, the Company gave an annual tribute of 26 Lakh Rupees to the Mughals
The districts of Kora and Allahabad were returned to Mughal Emperor.
 Awadh was returned to Shuja-ud-Daulah but Allahabad and Kora was taken from him. The
Nawab of Awadh paid 53 Lakhs rupees of war indemnity to the British. Thus, Clive, in

person settled the fate of almost half of the Northern India. The fiscal administration of
Bengal, Behar, and Orissa and the territorial jurisdiction of the Northern Circars is called
the Dual System of Government.
Dual System of Government
Under this system, the company carried out the Diwani (Fiscal) jurisdiction so Company was
Diwan. Nawabs carried out the Nizamat (territorial) jurisdiction so they were Nizam. This
system of separate Diwan and Nizam is called Dual Administration.
However, the real authority was East India Company in the Nizamat also. The biggest fallout of
this system was that the Indian Merchants were reduced to beggars. On the one side, British kept
enjoying the duty-free trade; the Indian merchants were to pay around 40% of the revenue. The
peasants were now under the British revenue collection. The British left no stone unturned to
extract each penny. There was zero activity in the name of development so Peasants started
turning beggars. The new confusing administrative machinery, which was not properly set up,
created chaos. The Officials of the British East India Company such as Lord Clive became
extremely rich due to the clandestine private trade. This was the beginning of the Economic loot
from India, which made England the wealthiest country in the world in the 19th and 20th century.
The consequence of this steady drain upon the production of the country soon began to be felt
Merits and reasons of the Dual Government

Clive showed his sagacity by following the policy of decentralization in the matter of Company’s
administration in Bengal. By this policy he could save the British in India from the wrath of the
Indian rulers who might have taken drastic steps to oust the British from India had it been done
otherwise.
By the dual system of Government in Bengal Clive could save the company from the jealousy of
the other European powers like the French, the Dutch and the Portuguese. These European powers
would have withdrawn their payment of tariff to the servants of the Company on the event of
Clive’s full occupation of Bengal.
Clive was wise enough not to take upon the administration of Bengal directly. He knew fully well
that the servants of the company were not conversant with the languages, customs, traditions and
laws prevailing among the people of Bengal.
They would have cut a very sorry figure had they been entrusted with the administration of Bengal
in the event of Clive’s occupation of the state. In addition to their ignorance of the task of
administration, their number was also too small to manage it.
Both the Board of Directors and the British Parliament were not in favour of direct administration
in Bengal. Clive did not like to insure displeasure of the home authority by taking over the
administration of Bengal directly. By establishing Dual Government in Bengal, Clive showed his
honour to the Board of Directors on the one hand and saved the Company from the wrath of British
parliament on the other.
The dual Government in Bengal helped the East India Company to remain free from the real
responsibility of the administration of Bengal. The English Company got power and pelf by this

system of Government by successfully keeping themselves away from the hazards of
administration. For every omission and commission in the Government the Nawab of Bengal was
to be held responsible.
Clive established Dual Government in Bengal because the exigencies of time demanded it. It
provided a conducive atmosphere for the growth of British power in India under the prevailing
circumstances. Any alternative would have led the company to disaster. It was stop-gap
arrangement. It was make-shift agreement which aimed at tiding over the difficulties confronting
the English in 1765.
Demerit of the Dual Government

The Dual Government of Clive has been criticized in various ways. It led to disastrous results. The
administration in Bengal almost collapsed. Power was divorced from the responsibility. The
British were in possession of power and money whereas the Nawab had neither power nor money.
He had only the responsibility of running the administration and take the blame for any failure.
The Nawab failed to manage the administration smoothly with a small annual grant of rupees 50
lakhs only. The company tried to improve its own lot by the revenue it collected from Bengal, Bihar
and Orissa. The Nawab could not do any work of public utility due to paucity of fund. The Nawab
also had no power to enforce law.
As a result, lawlessness prevailed in most parts of Bengal. The cases of theft and rubbery
increased by lips and bounds. The common people had to suffer a lot due to want of justice.
The condition of agriculture in Bengal gradually deteriorated under the Dual Government of
Clive. The power of collection of revenue rested in the hands of the company only. So, the Nawab
could not make any provision like irrigation for the development of agriculture in Bengal. He also
failed to advance loan to the needy farmers due to shortage of fund. The great famine of 1770 was
an indirect outcome of the above difficulties.
The poor administration in Bengal led to rapid increase of private trade. The servants of the East
India Company carried on trade and commerce privately without paying any tax. They earned a
lot of profit out of this illegal trade. But on the other hand the merchants of Bengal suffered a lot,
because they were over burdened with tax. Thus, the Dual Government dealt a terrible blow to the
local trade and commerce.
The servants of the Nawab became wayward and oppressive when they came to know that the
Nawab was a great puppet in the hands of the English company. This led to the suffering of the
people of Bengal.
The Dual Government of Clive was further responsible for the downfall of local industries. The
company’s people forced the local weavers to work exclusively for the company. Many other small
local industries also were brought under the control of the company.
People failed to get proper justice under the Dual system of Government. The judges of the
Nawab were influenced by British authority, because the latter played vital role in their

appointment. Thus, the judges failed to give impartial verdict which was detrimental to the interest
of the public.
The downfall of agriculture under the Dual Government ultimately led to the downfall of
Company’s income due to decrease of revenue collection.
Thus, the Dual Government of Clive proved to Bengal a failure. It gave rise to several
complications in the administration of Bengal. The absence of responsibility on the part of the
company led to abuses of power and corruption.
This dual system was proved to be unsuccessful and in 1772 it was ended by Lord Warren
Hastings on the orders of the directors of the company.
At the time of end of this system Mubaraq-ud-Daulla was the nawab of bengal.
The Regulating Act (1773)
By 1773, the East India Company was in dire financial crisis. The Company was important to
Britain because it was a monopoly trading company in India and in the east and many influential
people were shareholders. The Company paid £400,000 annually to the government to maintain
the monopoly but had been unable to meet its commitments because of the loss of tea sales to
America since 1768 as Dutch were able to enter the American Markets. The East India Company
owed money to both the Bank of England and the government; it had 15 million lbs of tea rotting
in British warehouses. The mismanaged Finances made the company almost insolvent and the
company was forced to apply to the British Government for a loan.
The East India Company was basically a trading farm that made business over a vast area of India
but also maintained an army to protect its interests. PM Lord North decided to start Governmental
control, as East India Company had no experience in ruling it conquered few areas.
The British Parliament appointed two committees:
(1) Secret Committee

(2) Select committee.
Based on the recommendations of the two committees there two Act were passed
(1) Granted to the company a loan of £ 14,00000 at 4% interest

(2) Regulating Act, 1773
Lord North decided to overhaul the management of the East India Company and to provide some
form of legal government for the Indian possessions of the East India Company with the
Regulating Act 1773. This was the first step along the road to government control of India. The Act
set up a system whereby it supervised (regulated) the work of the East India Company but did not
take power for itself.
Since the Government in Britain regulated the company and did not take it over, it was termed
“Regulating Act”.

East India Company had a very powerful lobby in Parliament in spite of the financial crises of the
Company. The Shareholders along with this lobby of Parliament opposed the act. The Regulating
Act of 1773 was passed because:
1. Being a trading company, EIC had difficulties in Governance.

2. Address the problem of management of company in India.
3. Address the problem of corruption
4. Terrible famine in Bengal
5. Address the problem of dual system of governance instituted by Lord Clive
6. To control the company, this was so far a business entity but now a semi-sovereign
political entity in India
7. Lack of proper judicial administration
8. Company’s defeat in 1769 at the hands of Hyder Ali
Provisions of Act
The Regulating act of 1773 permitted the Company to retain its former possessions and power in
India but the management was brought under control by the British Government.
Election for Directors: The directors of the company were elected for four years. One- fourth of
them retire for every year and the retiring Directors were not entitled to be elected again. In order
to assert parliament’s control over the company, the directors were required to place regularly all
their correspondence, regarding civil military affairs with the Indian authorities, before the
secretary of the state in England. All correspondence regarding to revenues in India was required
to be placed before the Treasury in England.
The Act limited Company dividends to 6% until it repaid a GB £1.5 Million loan and restricted the
Court of Directors to four-year terms. It prohibited the servants of company from engaging in any
private trade or accepting presents or bribes from the natives to curb corruption.
First Governor General of India: The Act elevated Governor of Bengal, Warren Hastings
to Governor-General of Bengal and subsumed the presidencies of Madras and Bombay under
Bengal’s control. Now, no other presidency could give orders for commencing hostilities with the
Indian Princes, declare a war or negotiate a treaty. Now, the Governor General of India and his
council of 4 members got a legal status. Their term of office was five years and the king was
empowered to dethrone them even earlier on recommendation of the court of directors.
[Commonly we call Warren Hastings as First Governor General of India. But the official title of
Warren Hastings was the Governor of the Presidency of Fort William. This office became Governor
General of India in 1833 from the times of Lord William Bentinck and in 1858, when India was
taken over by England; it remained Viceroy and Governor-General of India till 1947]
Council of Four: The Act named four additional men (as explained in earlier paragraph) to serve
with the Governor-General on the Supreme Council of Bengal: Lt-Gen John Clavering, George
Monson, Richard Barwell, and Philip Francis. Barwell was the only one with previous experience
in India. These councillors were commonly known as the “Council of Four“.

The governor general in council was given all the power to govern the company’s territorial
acquisition in India, to administer the revenue of Bangal, Bihar, Orissa and to supervise and control
the general civil and military government of the Presidency. The presidencies of Bombay and
Madras were placed under the control and superintendence of the Governor General in Council
while exercising their power to make war and peace. The Governor General and the Council were
to keep the court of directors fully informed of all their activities affecting the interests of the
company and they were also to work in entire obedience to the orders and instructions of the court
of directors.
India’s First Supreme Court: A supreme court was established at Fort William at Calcutta. British
judges were to be sent to India to administer the British legal system that was used there. This
Supreme Court consisted a Chief Justice and three other regular judges or Puisne Judges, being
barristers of not less than five years standing and to be appointed by His Majesty. Sir
Elijah Imphey was the first Chief Justice. The Supreme Court was the supreme judiciary over all
British subjects including the provinces of Bengal, Bihar and Orissa.
Position of the Supreme Court Calcutta: There was nothing comprehensible in the act with regard
to the relation of the Supreme Court with the Government of Bengal. The Supreme Court subjected
the company to the control of British Government.
Jurisdiction: Supreme court was given very wide jurisdiction. Cases against company and
corporation of Calcutta also placed under the court Civil jurisdiction: His Majesty’s subjects or
persons employed directly or indirectly by the company or persons who have voluntarily agreed
in writing to refer their disputes to the supreme court were under the jurisdiction. (Various terms
like the “British subjects”, “subjects of His majesty”, “persons employed directly or indirectly in
the service of the company” were used to define the personal jurisdiction of the Supreme Court.
The significance of these terms by no means clearly defined). Supreme Court was also given
permission to accept cases against the Governor General and any of his Council members.
Criminal Jurisdiction:The court was not given jurisdiction over all the native Indian residing in
Calcutta and with in the territory Bengal, Bihar and Orissa. It was only vested with the jurisdiction
over all British subjects (though it was not clear who were British subject? If Calcutta was under
British, all residents could be British Subjects?), their servants and the persons employed by the
company. Supreme Court was given permission to accept the cases against Governor General and
his council members, but court had no power to arrest or imprison any of them in any action
The Supreme Court was also made to consider and respect the religious and social customs of the
Indians. Appeals could be taken from the provincial courts to the Governor-General-in-Council
and that was the final court of appeal. The rules and regulations made by the Governor General-
in-Council were not to be registered with the Supreme Court.
Later an amendment in this act was made (The amending act of 1881), in which the actions of the
public servants in the company in their official capacity were exempted from the jurisdiction of the
Supreme Court.

From Diarchy to Direct Control
Warren Hastings (1772 – 1774)
From 1772, Warren Hastings served as Governor General of Fort Williams and the regulating act
was passed after his arrival. Important events under his rule include
 Trial of Nandkumar and Raja Chait Singh of Banaras;

 codification of Hindu and Muslim laws;
 First and second Anglo-Maratha wars, Second Anglo-Mysore war
 Abolition of Dual System
 quinquennial settlement of land revenue
 foundation of Madarasa Aaliya (1781) and Asiatic Society (1784).
He implemented several reforms in all walks of administration. Pitts India Act, 1784 was an
important act passed during his tenure.
Warren Hastings ended the Dual System

put forth by Clive and introduced the
Ijaredari system in its place based on
annual assessment of land revenue. He
also appointed English revenue officers.
He shifted the Treasury from
Murshidabad to Calcutta, thus making it
safe in a fortified place.
The Rohilla War (1774)

At that time, the small kingdom of
Rohilkhand was under Afghans or the
Rohillas. After the death of Aurangzeb,
Rohil Khand wanted to become an independent kingdom but the Nawab of Oudh had brought it
under his protection. Hafiz Rahmat Khan, the ruler of Rohil Khand, consolidated his power and
made his Kingdom powerful and prosperous. However, Marathas had an eye for Rohil Khand.
Suspecting their designs, the Rohillas asked for the help from the Nawab of Oudh. British also
wanted that Rohil Khand should come under the control of
their friend, the Nawab of Oudh. The Nawab agreed to help
the Rohillas if the Marathas attacked them. For this help,
they would pay Rs. 40 lakh to him.
The Marathas attacked Rohil Khand in 1773 but had to

return back without indulging into war on account of
sudden death of Madhav Rao Peshwa. However, Nawab of
Oudh demanded Rs. 40 lakh which was agreed them but
Hafiz Rahman Khan refused to pay. After that, the Nawab
requested the British for help to attack Rohil Khand and
promised that besides bearing the expenses of the army, he
would also pay Rs. 40 lakhs to them. This proposal was

accepted by Hastings. He sent British troops and defeated Rohillas. Hafiz Rahmat Khan and some
20,000 Rohillas were banished from the country. With this, Rohil Khand was annexed of Oudh.
This particular event led the conduct of Warren Hastings under sever censure in England. Lord
Macaulay charged Hastings for looking on callously when the Rohilla’s villages were burnt, their
children butchered and their women violated. It was called an “unBritish” operation.
The Trial of Nand Kumar 1775

Nand Kumar was an influential Bengali Zamindar, who was inimical to Hastings. Some of the
members of the council were also hostile to the Governor General and they conspired to lodge a
case against Hastings with the help of Nandkumar. In 1775 Nand Kumar accused Hastings in
council of accepting Rs. 3.5 lakhs from the widow Mir Jafar. This charge was welcomes by the
Council but Hastings himself objected to council’s charges against him. However, majority was
against him. In disgust he dissolved the council. However, the council asked him to deposit the
money in company’s treasury. After this, Hastings brought a counter-charge against Nand Kumar
in the Supreme Court. He was arrested on the charge of forgery. The absence of any evidence could
not prove the charge of bribery against Hastings. However, charges of forgery were proved against
Nand Kumar and he was hanged by majority decision of the Supreme Court. The critics of Warren
Hastings called the trial and execution of Nandkumar as a Judicial Murder. It was also called a
“scandalous travesty of decency“. The punishment was excessive and even unjust because no
Indian law prescribed death for forgery.
Philanthropy of Hastings
In 1781, Warren Hastings founded the Madarasa Aliya or Calcutta Madarasa. Warren Hastings
supported the establishment of Asiatik society, (which later became Asiatic Society) in 1784 by Sir
William Jones under the chairmanship of Sir Robert Chambers. Both of them exist till date
flourishing. Madarsa Aaliya was run for quite some time by Warren Hastings only through his
own pocket, but a year later he was paid by the Bengal Government. In 2007, this Madarasa Aaliya
became the Aliah University by Aliah University Act 2007.
Pitts India Act 1784

Though the Regulating Act of 1773 had made the two presidencies of Bombay and Madras
subordinate to the Presidency of Fort William, yet there was an absence of power in the Governor
General in Council of Fort Williams to control them and even override his council. Warren
Hastings, practically worked as a 5th member of the Council. There was also not a clear
demaraction between the Governor General in Council and Supreme Court jurisdictions. The
Regulating Act was a failure. In the first Anglo-Mysore war and First Anglo Maratha war its failure
was seen in the confusion of treaties and these flaws were taken up by William Pitt (PM), the
younger. He introduced the Pitts Bill in 1784 with an objective to provide better regulation and
management of the company as well as British Possessions in India. It also had an objective to
establish a court of Judicature in India, which could provide speedy trial and justice. But the bill
was not passed. Prior to Pitts India Act, Jame Fox had introduced an Edmund Burke’s bill to reform
East India Company. But this bill failed in the house of Lords.
In the subsequent election, William Pitt obtained a majority and got the bill passed in August
1784, which was known to be Pitt’s India Act 1784. This act provided for the appointment of a

Board of Control, and provided for a joint government of British India by the Company and the
Crown with the government holding the ultimate authority. The act was deemed a failure. This
was because; very soon it became apparent that the boundaries between government control and
the company’s powers were nebulous and highly subjective. The British Government felt obliged
to respond to humanitarian calls for better treatment of local peoples in British-occupied territories.
The Board of control was alleged for nepotism. The act was a naive one, it divided the
responsibility between the Board of Control, Court of Directors and the Governor General in
Council but again, no boundaries could be fixed as they matter was subjective and not objective.
In 1785 Warren Hastings returned to England. On his return to England he was impeached by the
House of Commons for alleged acts of oppression and corruption. Some of them were:
 He was accused for oppression in the Rohilla war. The oppression and deposing Chait Singh
of Banaras and accepting bribes.
 General corruption in the company Warren Hastings was solemnly tried by the House of
Commons, and the proceedings prolonged for seven years (1788-1795).
The Impeachment of Warren Hastings is one of the most celebrated state trials in English history.
It ended with exoneration of all charges on Warren Hastings. But these 7 years of defending himself
made him near bankrupt.

Lord Cornwallis (1787-1793)
Lord Cornwallis twice held the high post of governor general. His first tenure lasted from 1786
to 1793. For second time, he came to India in 1805, but died before he could do any wonders
again. Lord Cornwallis was the First English Nobleman to come to India to undertake the office
of the Governor General and also the first of Parliamentary Governor Generals of India. He was
also the First Governor General to die in India {during his second term}.
Lord Cornwallis introduced a new revenue system under the Permanent Settlement of Bengal in
1793 with a view to stabilize land revenue and create a loyal contented class of Zamindars. This
abolished periodic auction of Zamindari rights and established permanent Zamindari rights to
collect land revenue from the tenants and payment of a fixed amount to the Government treasury
every year. During his tenure, doors of covenanted services were closed for Indians. He got the
power of commutation of punishment. He defeated Tipu in third Anglo-Mysore war and signed
Treaty of Srirangpatanam
Permanent Settlement
Lord Cornwallis introduced the Permanent Settlement in Bengal, Banaras, Bihar, Carnatic (North
Karnataka) and Orissa. As per this system, the Zamindars who formerly collected revenues were
recognized as Land Lords and the ownership of the Land was made hereditary. This means that
now onwards there would be no auctioning. The son of Zamindar would be a Zamindar. The idea
was that Zamindars would have a “permanent interest” in the welfare of the Peasants. But the
result was that cultivators were reduced to tenants, deprived of all kinds of rights on the land. The
Zamindar could kick a cultivator any time, without giving any reason. In the same system in 1799,
the Zamindars were given rights to confiscate the land and kick out the tenant cultivators.
 Zamindar was the real owner of the Land and “representative” of the Government.
 Peasants were now “tenants” of the Zamindars Peasants could be kicked out any time by
the Zamindar
 The Zamindar was like a servant to the Government.
 He used to keep 11% of the revenue with him for “serving as agent of the Government” and
89% he had to pay to the Government.
 Thus the revenue started coming to the British on 10/11 ratio.
 The Permanent Settlement fixed the revenue of the land on a 10 year basis.

The economic drain from India was set at a faster pace by Lord Cornwallis by putting in place the
Zamindari or Permanent settlement system. The system remained in placed but later a new
Mahalwari system was placed during the times of Sir Thomas Munroe in certain areas of India.
Reforms in the East India Company
To “curb” the corruption in the company, Cornwallis was given sufficient powers and
authorities. He put in place the rules and regulations for the servants of the company. As per the
new rules
 Only qualified people would enter into the service of the company.
 No recommendation from England would be given weightage for appointments in the
company’s service.
 The private trade of all the company servants was abolished. Company servants were now
to sign a bond which included that they won’t accept any gifts from Indians and will not
indulge in private trade.
 Top posts were only for Europeans, Indians were given posts which were lowest such as
peons. The revenue collectors were deprived of the Judicial powers.
Judiciary Reforms
The next important change Cornwallis did was to set up courts in the states, districts and
provinces. The Supreme Court of Calcutta was the final court of appeal. The system of Civil
Judiciary was as follows:
 Lowest Court was the Amin Court or Munsif Court. The Munsifs could decide the case
where the value was less than Rs. 50.
 The higher court was the District court or “Diwani Adalat”. The Judge was called “Session
Judge”. This session Judge was essentially an Englishman, who used to deliver justice to
“only Indians” and not the Europeans. He was assisted by assessors.
 The higher than Diwani Adalat was the Provincial Court of Appeal. Four provincial
Courts of appeal were set up at Dhaka, Calcutta, Murshidabad and Patna. These courts
heard appeals from the districts except the English.
 After provincial court, the Highest Court of Appeal was set up which was called “Sadar
Diwani Adalat”. The headquarters of Sadar Diwani Adalat was at Calcutta and it was the

Highest Court of Appeal. Its judge was supported by a Head Qazi, two Muftis and Two
Pandits.
 The appeals from the “Sadar Diwani Adalat” were submitted to the King in England. The
King of England only entertained those cases whose value was more than 5000 rupees.
The above system was in the Civil Judiciary. In Criminal Judiciary, Cornwallis introduced the
following structure:
 At Taluka / Tahsil level there was a Darogh-i-Adalat. Its Judge was “Darogha” who was
“An Indian“. This was the lowest level.
 The appeals from a Darogha could be taken to “District Criminal Courts”. The judge of this
court was a Session Judge, an English.
 To hear the criminal appeals from District courts, 4 Circuit Courts at Murshidabad, Dhaka,
Calcutta and Patna were established.
 The Highest court of Criminal appeal was in “Sadar Diwani Adalat” at Calcutta which used
to sit once in a week. It was supervised by Governor General in council.
Other Judicial Reforms included the following:
 Court fees were abolished by Cornwallis.

 Lawyers were to prescribe their fees.
 Ordinary people could sue the Government servants (Indians) if they committed mistakes.
 Inhuman punishments such as cutting limbs, cutting nose and ears were abolished.
The Cornwallis era is known for a very steep increase in litigation in India. The administrative
reforms of Cornwallis were based upon the permanent settlement of revenue. Here we see that
there was a separation of the revenue administration and the judicature. Further, the Europeans
were employed at higher offices, which were given the job of complex system of regulations. The
excellent plan came with simultaneous reforms in the judiciary which included the setting up
courts in the states, districts and provinces, Abortion of court fee, rules for lawyers to prescribe the

fee etc. The actual motive of recourse to the courts for zamindars proved to be a weak motive and
due to all these reasons, the permanent settlement worked very badly in the beginning. Courts
were choked by the litigations. The litigation kept flooding the courts, until the Zamindars were
given coercive powers in 1795 and 1799.
Police Reforms of Cornwallis
So far Police was under the Zamindars. It was taken away from
Zamindars and handed over to the Superintendent of the Police at
District level. The Police was Europeanized. They were now paid
salary and given unlimited powers to arrest the suspected persons.
So now Thanas were there in India to maintain “peace and order”.
Zamindars had still a great influence on these Thanas, but legally
there were detached from the Police functionary. In 1789 Lord
Cornwallis made a proclamation that “anyone who is found
associated with Slavery would be prosecuted in the Supreme
Court“. This step he had taken to curb the menace of slavery
prevalent in India since Sultanate Era but the immediate reason was
that the Children were collected by the Indians and sold to “French”.
Lord Cornwallis retired in 1793, and was succeeded by Sir John

Shore.
Sir John Shore and Charter Act 1793

Tenure of Sir John Shore’s rule as Governor General from 1793 to 1798 was politically uneventful
in India. He followed the policy of Non-intervention in the quarrels of Indians. The most notable
event that happened in his tenure was passing of Charter Act of 1793. John Shore was succeeded
by Lord Wellesley in 1798.
Charter Act 1793

The Charter Act 1793 or the East India Company Act 1793 was passed by British Parliament to
renew the charter of East India Company. This act authorized the company to carry on trade with
India for next 20 years.
Key Provisions
In this act, the Governor General was empowered to disregard the majority in the Council in
special circumstances. Thus more powers were entrusted in him. The Governor General and
respective governors of the other presidencies could now override the respective councils, and the
commander in chief was not now the member of Governor General’s council, unless he was
specially appointed to be a member by the Court of Directors.
The company was allowed to increase its dividend to 10%. A provision in the Charter act of 1793
was made that the company, after paying the necessary expenses, interest, dividend, salaries, etc
from the Indian Revenues will pay 5 Lakh British pounds annually out of the surplus revenue to
the British Government. However, the act also had a provision, that Crown could order the
application of the whole of the revenue for the purpose of defense if the circumstances posed such

demands. Expenses, interest, dividend, salaries, etc were to be borne by the Indian Exchequer.
If a high official departed from India without permission, it was to be treated as resignation.
This act reorganized the courts and redefined their jurisdictions. The revenue administration
was divorced from the judiciary functions and this led to disappearing of the Maal Adalats.
Lord Wellesley (1798 – 1805)

Lord Wellesley remained Governor General of Fort Williams from 1798 to 1805. During his tenure,
the Fourth and last Anglo-Mysore war was fought and Tipu was killed in this war. The Second
Anglo Maratha war also happened in which Bhonsle, Scindia and Holkar were defeated. Wellesley
followed the policy of “subsidiary alliance”, which was accepted by the rulers of Mysore, Jodhpur,
Jaipur, Bundi, Macheri, Bharatpur, Oudh, Tanjore, Berar, Peshwa and Nizam of Hyderabad. The
Censorship of Press Act, 1799was also brought under his tenure and Fort William College was
established in 1800 to train civil servants.
Fourth Anglo Mysore War
In 1798, the troops of Napoleon had sailed to Egypt
and had defeated its rulers. One of subsequent step
of Napoleon would be to capture the British
Possessions in India. The key to such step was
Kingdom of Mysore, whose ruler Tipu had sought
France as ally. In a letter to Tipu, Napoleon said that
he would send his innumerable forces to India to
drive out the British. However, this plan was never
executed because French were defeated in the Battle
of Nile (1798) by British. Meanwhile, Lord Wellesley
had decided to crush Tipu. His forces marched into Mysore and seized Shrirangpatnam. One of
the commanders of Tipu, Mir Sadiq was bought by the British, he deceived Tipu and the result was
that Tipu, amid the English advantageous position, was shot and killed. Tipu had used the iron
cased rockets in the Third and Fourth Mysore wars. It led the British to develop their own versions
of the Rockets. The Woodyar dynasty was restored on the throne of the Mysore and Mysore came
indirectly under the British. Thus, with the end of Fourth Mysore war, Mysore became a princely
state with suzerainty of the East India Company.
Subsidiary Alliance System

The Subsidiary Alliance System was a Treaty between the company and the Indian native rulers.
In return for a payment or subsidy, the company would place garrison troops in that ruler’s
territory to fight against their enemies. Subsidiary alliance system was originally the idea of
Dupleix, who used to rent his army to Indian rulers. Similarly, Clive had also made similar kind
of arrangement with Oudh. Lord Wellesley made is an important part of his imperialistic designs.
He made the Nawab and Nizams subsidiary allies by signing almost 100 such treaties.
Key principles of a subsidiary alliance
 The Indian ruler would accept British Forces in his territory and also pay their cost of
maintenance.

 The ruler will accept a British Resident in his state.
 The ruler would not enter into any further alliance or war with any other power without
permission from the British.
 The ruler would not employ any European other than British. In case there is any conflict,
the resolution as decided by British would be accepted to him.
 The ruler would acknowledge East India Company as paramount power in India.
In return for the above conditions, the East India Company would pledge to protect the state from
external dangers and internal disorders. If the Indian ruler fails to make required payments, a part
of his territory would be taken away as penalty. First ruler to sign this treaty with Wellesley was
Nizam of Hyderabad (September 1798 and 1800).He was followed by Ruler of Mysore (1799), Raja
of Tanjore (October 1799), Nawab of Oudh (November 1801), Peshwa (December 1801), Bhonsle
Raja of Berar (December 1803), Sindhia (February 1804) and others including Jodhpur, Jaipur,
Macheri, Bundi and Bharatpur etc.
Censorship Act 1799

In 1780, James Augustus Hickey published first newspaper in India titled “Bengal Gazette” or
“Calcutta General Advertiser”. This was too outspoken and its press was seized soon. Then there
was a general proliferation of the newspapers including
 The Calcutta Gazette (1784)

 The Bengal Journal (1785)
 The Oriental Magazine of Calcutta (1785)
 The Calcutta Chronicle (1786)
 The Madras Courier (1788)
 The Bombay Herald (1789)
In 1799, Lord Wellesley brought the Censorship of Press Act to stop the French from publishing
anything which could harm British in any way. This act brought all the newspapers under the
Government scrutiny before their publication. This act was later extended in 1807 and covered all
kinds of Press Publications newspapers, magazine, books and Pamphlets. The rules were relaxed
when Lord Hastings came into power.
The initial attempt to train the Civil Servants locally was done by Lord Wellesley. Within the
campus of the Fort William, he founded Fort Williams College on 10 July 1800. The idea was to
teach the British rookies understand the Oriental Culture, tradition, law and administration to
better coordinate in the “governance”.
The adventures of Lord Wellesley were good, but they were costly. The continuous wars with
Mysore and Marathas, his policy of launching educational projects in India caused the financial
strain which made the Court of Directors impatient. He was recalled in July 1805 and once again
Lord Cornwallis was sent to India. He was advised by his peers to bring peace in the British
dominions which were under the threats with the wounded lions such as Holkars and Scindias.
He came in the rainy season and the bad weather of India claimed his life. He was succeeded by
Sir George Barlow, an intimate adviser of John Shore and Lord Wellesley. His term was till 1807
when there was a mutiny at Vellore in 1806.

Sir George Barlow (Officiating) (1805-1807)
Sir George Barlow was the officiating Governor General between 1805 and 1807. During his
tenure, Vellore Munity occurred in 1806.
Mutiny of Vellore 1806

Mutiny at Vellore happened when British tried to disturb the religious sentiments of Indians.
At Vellore, some foolish orders were passed by Sir John Cradock and Lord Howdon, the
commander in Chief in Madras to regulate the dress of the Sepoys. As per the new rules, Hindus
were prohibited from wearing religious marks on their foreheads and Muslims were required to
shave their beards and trim their moustaches. The Indian Sepoys thought that they were going to
be “Christianized”. The result was that on the midnight of 10 July 1806, the crowd got collected,
sepoys mixed with them led by one of Tipu’s son, massacred the Europeans and hoisted the Flag
of the Mysore Sultanate there. The mutiny was subdued by dawn, but it sent ripples of fear among
the British overlords, as first sign of losing an empire.
Lord Minto ( 1807 – 1813)

In 1807, Lord Minto was sent to India as Governor General of Fort Williams. Prior to this, he was
more active in Java, Sumatra and Malacca. In his time the British Government of India opened
relations with the set of the foreign powers. He sent embassies to Punjab (Maharaja Ranjit Singh)
and Shah of Persia. He signed Treaty of Amritsar with Maharaja Ranjit Singh. The Charter Act of
1813 was also signed during his tenure.
Minto-Metcalfe Treaty
After the demise of Mughals, Sikhs had become dominant in Punjab region in the form of land
owners of large tracts of lands called Misals. The holders of these Misals were Misaldars. These
Misaldars were not a consolidated power but were of varying powers. They used to fight with
each other. Maharaja Ranjit Singh consolidated the 12 Misals into a Khalsa state. He grew is
power by capturing Lahore in 1799, capturing Amritsar, and taking over Kashmir. The British
wanted to keep good relations with Ranjit Singh mainly because of dangers from northern sides
from Napoleon or Russia. To establish diplomatic relations, Minto sent Charles Theophilus
Metcalfe as a British envoy to Lahore in court of Maharaja Ranjit Singh. He signed a treaty of
“Mutual Friendship“, also known as Minto-Metcalfe Treaty with Maharaja Ranjit Singh on 30 May
1809. Thus, a diplomatic relation with Punjab was established. Minto also sent an envoy to Shah of
Persia for similar treaty.
Charter Act of 1813

Charter Act 1813 or East India Company Act 1813 was passed by the British Parliament to renew
the charter of British East India Company and continue the rule of the same in India.
The earlier charter act of 1793 had given the East India Company a monopoly to trade with East
for a period of 20 years. However, the rise of Napoleon Bonaparte had brought hard days to the
businessmen of England. Napoleon Bonaparte had put in place the Berlin decree of 1806 & Milan
Decree of 1807, which forbade the import of British goods into European countries allied with or
dependent upon France, and thus installed the so-called Continental System in Europe. Due to
these hardships, the British Traders demanded entry to the ports of Asia and dissolve the

monopoly of the East India Company. Apart from these hardships, the theory of Free trade policy
of Adam Smith had also become quite popular in those days. The supporters of this policy started
giving arguments on how ending the monopoly of East India Company in trade with India could
bring help the growth of British commerce and industry. However, East India Company opposed
these arguments giving logic that its political authority and commercial privileges cannot be
separated. The controversy was later resolved by allowing all the British merchants to trade with
India under a strict license system.
Key Provisions
End of Monopoly of East India Company Charter act of 1813 ended the monopoly of the East
India Company in India, however the company’s monopoly in trade with china and trade in tea
with India was kept intact. Thus, trade with India for all commodities except Tea was thrown open
to all British subjects. This lasted till 1833 when the next charter abolished the trade of the company.
Permission to Christian Missionaries The act also granted permission to the persons who wished
to go to India for promoting moral and religious improvements. (Christian Missionaries)
Other Provisions This act regulated the company’s territorial revenues and commercial profits. It
was asked to keep its territorial and commercial accounts separate. The company debt was to be
reduced and dividend was fixed @10.5% per annum. There was also a provision that Company
should invest Rs. 1 Lakh every year on the education of Indians. This act also empowered the local
governments to impose taxes on the persons subject to the jurisdiction of the Supreme Court
Nothing substantial was changed in terms of governance in India except that the Charter Act 1813
for the first time explicitly defined the constitutional position of the British territories in India.
The Act also empowered the Local Governments in India to impose taxes on persons and to punish
those who did not pay them. Lord Minto retired in 1813. He was succeeded by Lord Hastings also
known as Lord Moira.
Lord Hastings (1812-1823)

Lord Hastings or Lord Moira {Earl of Moira} served as Governor General of India from 1813 to
1823, a long ten years term. His tenure is known for policy of intervention and war. Two important
wars viz. Gurkha War and Third Anglo Maratha war occurred during his tenure. He simplified
the judicial proceedings and abolished the Censorship Act.
One of the important events during the tenure of Lord Hastings was abolition of Censorship. This
was basically because of his dislike towards “unnecessary” imposition of restrictions on Press. But
as a precaution, he issued some guidelines prohibiting company’s policies in the newspapers. The
result was that many fresh newspapers came up. India’s first Vernacular newspapers Samachar
Darpan was started in 1818. However, some scholars note that “Bengal Gazetti” was published
even prior to this Vernacular magazine by Ganga Kishore Bhattacharya. A few years later, Raja
Rammohan Roy started national press in India. He published “Sambad Kaumudi” in 1821. This
was one of the pre-reformist publications that had actively campaigned for Abolition of Sati.
However, this liberal policy of Lord Hastings could not continue further. The successors of Lord
Hastings took harsh actions against the press people.

Lord Amherst (1823-1828)
Lord Amherst served as Governor-General of India between 1823 and 1828. He had served as
British commander in America from 1758 to 1763. He went as envoy to China in 1816. By this time,
the Maratha war had concluded and India was generally peaceful. He faced the foes which were
beyond the sea. In 1824, there was Conflict between British India and Burma called the First Anglo
Burmese War. Other event of note during his tenure was Barrackpore mutiny.
The Barrackpore mutiny of 1824 was also due to interference of Indian social taboos by British.
Some of the battalions of native infantries of Bengal Army were ordered to March to Chittagong
and to board ships to reach Rangoon during first Anglo-Burmese war. However, travelling by
sea was a social taboo for Hindus, who called it Kaala Pani. Further, they had not bullocks even to
carry their belongings to Chittagong. The complaints of Indian sepoys were not paid attention.
Due to this, the soldiers forbade to go on March unless their pay is increased and provided means
to carry their luggage. The British refused to concede to these demands in Barrakpore cantonment
and sepoys revolted. Under their leader Binda, they drove away the British officers. The British
tried to calm the Sepoys to surrender on condition that their reasonable demands would be
considered later. However, when they rejected, the British troops launched a full scale assault on
Indian Sepoys and killed around 200 Indian Sepoys. The leader Binda was captured and
executed and his body was hung on a Peepal tree. This sent a terrorizing message to Indian troops
to not to rebel against their British masters. Binda was a hero but now not many people know about
his martyrdom. There is a temple in Barrackpur on that site, where his body was hung, known as
Binda Baba Temple. The deity of this temple is Lord Hanuman.

Lord Amherst departed from India in 1828 and his place was taken by acting Governor General
William Butterworth Bayley for some time in 1828. He was succeeded by Lord William Bentinck
whose term was from 1828 to 1835.
Lord William Bentinck (1828-35)

Lord William Bentinck served as Governor General of India between 1828 to 1835. His tenure is
known for the social reforms such as Abolition of Sati in 1829, Suppression of Thugi, and
Suppression of Infanticide etc. English was introduced as a medium of higher education on the
advice of his council member, Thomas Babington Macaulay. A pact with Maharaja Ranjit Singh
was made. Charter act 1833 was passed by which East India Company ceased to be a trading
company. Some corrective measures in civil services were taken. This seven-year period was an
epoch for administrative reforms in India. It started a process by which the Indian population,
which is furious of sudden changes, was made to obey the British rulers and administration slowly.
Partially this period can be said as of “benevolent administrators”. There is an inscription on his
statue at Calcutta which was penned by Lord Macaulay.
At the dawn of Bentinck’s term the Finances of the East India Company were tottering due to the
prolonged Anglo-Burmese War.
There was a general dissatisfaction among the masses who had heard the story of the Mutiny of
Barrackpur. The first step Lord William Bentinck took was to restore the equilibrium in the East
India Company’s finances. He took the following steps:
 He reduced the permanent expenditures of the company amounting to 15 Lakh Sterling

every year.
 He incorporated the revenue from the lands which had escaped the earlier assessments. He
imposed duty on Opium cultivated in Malwa.
 He widened the door, though which the natives could enter the services of the company.
Abolition of Sati in 1829

The Practice of Sati was first banned in Goa in 1515 by the Portuguese, but it was not that much
prevalent there. This evil practice was banned by the Dutch and French also in Chinsura and
Pondicherry respectively. The British permitted it initially but the practice of Sati was first
formally banned in city of Calcutta in 1798, but it continued in the surrounding areas. The Bengal
Presidency started collecting facts and figures on the practice of Sati in 1813. The data showed that
in 1817 only, 700 widows were burnt alive in Bengal alone. From 1812 onwards, it was Raja
Rammohan Roy, who started his own campaign against the Sati practice. His own sister-in-law
had been forced to commit Sati. Raja Rammohan Roy used to visit the Calcutta cremation grounds
to persuade widows not to so die. He also formed the watch groups. In Sambad Kaumudi he wrote
articles and showed that it was not written in any Veda or epics to commit this crime.
It was on 4 December 1829, when the practice was formally banned in all the lands under Bengal
Presidency by Lord William Bentinck. By this regulation, the people who abetted sati were
declared guilty of “culpable homicide.” The ban was challenged in the courts. The matter went to
the Privy Council in London. The Privy Council upheld the ban in 1832. After that other territories
also started following banning, but it remained legal in princely states, particularly in the

Rajputana where it was very common. Under the British control, Jaipur banned the practice in
1846.
Suppression of Thugs
The name of Lord William Bentinck is still cherished in India for suppression of the Thugs. Thugs
were the hereditary assassins whose profession was to deceive people and strangle them to death
with their Pugree or handkerchief. They used to travel in Gangs, disguised as merchants or
pilgrims. They were bound together by an oath on the rites of their deity goddess Kali.
In suppression of Thugs, along with William Bentinck, one more name is cherished. This able
officer was William Henry Sleeman. Initially he was a soldier and later became the administrator.
In 1835, the ‘Thuggee and Dacoity Dept’ was created by William Bentinck and William Henry
Sleeman was made its superintendent. He was later promoted as its Commissioner in 1839. The
rigorous operations under Sleeman led to capture of 1400 Thugs who were hanged by the
government or transported for life. A special prison was established at Jabalpur for Thugs. The
reason of this success was the awareness creation by the Government. The department started
disseminating information about the Thugee and at every Police Station or Thana, the information
about the new techniques by the Thugs would be sent. The travelers were warned. Since, Thugs
could be recognized only by evidence, the department started “King’s Evidence Programme “. In
this programme the Thugs, who turned evidences of the and provided into about the Gang
members & peers would be provided protection and incentives. This was used by the government
to break the code of silence, which kept the members of the gang silent.
Judicial Reforms
At the time of Lord Cornwallis, the provinces of Bihar, Bengal & Orissa were divided into 4
divisions. In each of these divisions a Circuit court was established. Besides there were 4 Provincial
Courts of appeal at Calcutta, Murshidabad, Dhaka and Patna. Judiciary required reforms because
of the following reasons:
 The new territories acquired in last 3 decades expanded the territorial jurisdiction of the
Sadar Diwani Adalat at Calcutta, but it was now too far away from them.
 The Provincial Courts of appeal were thought to be worthless and a burden on the
administration.
 The people who were in prison had to be kept for months before a Circuit Court met at
district headquarters and disposed the cases. So, the under trials suffered badly under the
Police oppression.
 The entire system was considered too expensive.
 The language of the courts was Persian and it was not easy for the litigants to fight in this
language.
The reason for the reforms were as follows:
 The first reform done was to abolish the Provincial Courts of Appeal and Circuit Courts
altogether. This was done by a regulation passed in 1829.
 In place of the Provincial courts of appeal and Circuit, the Commissioners of Revenue and
Circuit were appointed to do this job.

 For this purpose, the Bengal Presidency was divided into 20 divisions and each division
was placed under a separate commissioner.
 For revenue cases these commissioners worked directly under the Board of Revenue and
for Criminal cases they worked under Sadar Nizamat Adalat. Separate Diwani and Sadar
Nizamat Adalat were opened at Allahabad.
 In 1831, another regulation was passed by which the “Respectable Indians” were to be
appointed in the Zilla or City Courts. They were called “Munsifs“. Munsifs were to be
appointed on a salary and they could decide the cases worth less than Three Hundred
Rupees.
 Then, in a separate regulation, it was decided the Governor General in Council would
appoint respectable Indians to the post of Sadar Amins. The Sadar Amins would hear
appeals from the Zilla and city courts.
 Sadar Amin was now the highest Judicial Indian authority. However, neither Munsifs nor
Sadar Amins could trial the Europeans.
 In 1832, a sort of Jury was introduced in Bengal, which was like Indian Jury (Panchayat) that
could help the European Judges.
The abolition of the Provincial Courts of Appeal and Circuit reduced the expenditure of the
company Government. The appointment of the Commissioners introduced individual
responsibility. Police was now less oppressive as the Commissioners would dispose the cases. The
Jury system in Bengal (Panchayat) made possible the use of local knowledge and opinion. To
some extent, Indians were now to enter into the administration. It was not tangible at that time,
but at least it was a ray of hope for the Indians.
In 1835 Sir Charles Metcalfe succeeded Lord William Bentinck, being senior member of council.
His short term of office is memorable for the measure which his predecessor had initiated, but
which he carried into execution. This was giving entire liberty to the press. It was the Public
opinion in India, but there were people at home as well as India who opposed this policy. “Lord
Metcalfe” is called Liberator of India Press but soon he became a victim of party politics in
England and was asked to get back to pavilion. He was succeeded by Lord Auckland in 1836.
Charter Act of 1833

Charter Act 1833 or the Saint Helena Act 1833 or Government of India Act 1833 was passed by
the British Parliament to renew the charter of East India Company which was last renewed in 1813.
Via this act, the charter was renewed for 20 years but the East India Company was deprived of its
commercial privileges which it enjoyed so far.
End of East India Company as a Commercial Body The British Government had done a careful
assessment of the functioning of the company in India. The charter was renewed for another 20
years, but it ended the activities of the company as a commercial body and it was made a purely
administrative body. With this, British were allowed to settle freely in India.
India as a British Colony The charter act of 1813 legalized the British colonization of India and the
territorial possessions of the company were allowed to remain under its government, but were
held “in trust for his majesty, his heirs and successors” for the service of Government of India.

Governor General of India This act made the Governor General of Bengal the Governor General
of British India and all financial and administrative powers were centralized in the hands of
Governor General-in-Council. Thus, with Charter Act of 1833, Lord William Bentinck became the
“First Governor General of British India”. Fourth Member in Governor-General in Council The
number of the members of the Governor General’s council was again fixed to 4, which had been
reduced by the Pitt’s India act 1784. However, certain limits were imposed on the functioning of
the 4th member. For example, the 4th member was not entitled to act as a member of the council
except for legislative purposes. For the first, this fourth members of the council was Lord
Macaulay.
Split in Bengal Presidency The Charter Act of 1833 provided for splitting the Presidency of Bengal,
into two presidencies viz. Presidency of Fort William and Presidency of Agra. However, this
provision was later suspended and never came into effect.
Enhanced Power of Governor General of India Charter Act of 1833 distinctly spelt out the powers
of the Governor-General-in-Council. He could repeal, amend or alter any laws or regulations
including all persons(whether British or native or foreigners),all places and things in every part of
British territory in India, for all servants of the company, and articles of war. However, the Court
of Directors acting under the Board of control could veto any laws made by the Governor-General-
in-Council.
Codifying the Laws The charter act of 1833 is considered to be an attempt to codify all the Indian
Laws. The British parliament as a supreme body, retained the right to legislate for the British
territories in India and repeal the acts. Further, this act provided that all laws made in India were
to be laid before the British parliament and were to be known as Acts. In a step towards codifying
the laws, the GovernorGeneral-in-Council was directed under the Charter act of 1833, to set up an
Indian law Commission.
India’s First Law Commission India’s first law commission was set up under Charter act of 1833
and Lord Macaulay was made its Chairman. The other members of this commission were English
barrister Cameron, Macleod of Madras service, William Anderson of Bombay Service and Sir
William McNaughton of the Calcutta Service. Sir William McNaughton did not accept the
appointment. The objectives of the law commission was to inquire into the Jurisdiction, powers
and rules of the courts of justice police establishments, existing forms of judicial procedure, nature
and operation of all kinds of laws. It was directed that the law Commission shall submit its report
to the Governor General-in-council and this report was to be placed in the British parliament.
Indians in the Government service The section 87 of the Charter Act of 1833, declared that “no
native of the British territories in India, nor any natural born subject of “His majesty” therein, shall
by any reason only by his religion, place of birth, descent, colour or any of them be disabled from
holding any place, office or employment under the company”. Thus, the Charter act of 1833 was
the first act which made provision to freely admit the natives of India to share an administrationin
the country. The act laid down that Court of Directors should nominate annually 4 times as many
candidates as there were vacancies, from whom one should be selected by competitive
examination. The charter act of 1833 also provided the Haileybury college of London should make

quota to admit the future civil servants. However, this system of an open competition was not
effectively operated in near future.
Mitigation of Slavery This act also directed the Governor General-in-Council to adopt measures
to mitigate the state of slavery, persisting in India since sultanate Era. The Governor General-in-
Council was also directed to pay attention to laws of marriage, rights and authorities of the heads
of the families, while drafting any laws.
More Bishops: The number of British residents was increasing in India. The charter act of 1833 laid
down regulation of establishment of Christian establishments in India and the number of Bishops
was made 3.
Significance of Charter Act 1833

For many reasons, the Charter Act 1833 was a watershed moment for the constitutional and
political history of India.
 Firstly, the elevation of Governor General of Bengal as Governor General of India was a
major step towards consolidation and centralization of the administration of India.
 Secondly, end of East India Company as a commercial body effectively made it the trustee
of the crown in the field of administration.
 Thirdly, this act for the first time made provision to freely admit Indians into administration
in the country. Indians could enter into the civil service but the process was still very
difficult.
 Fourthly, this act for the first time separated the legislative functions of the Governor
General in Council from the executive functions. Also, the law commission under Lord
Macaulay codified the laws.
Lord Auckland (1836 – 1842)

Between 1836 to 1842, Lord Auckland served as Governor General of India. During his tenure, the
first Anglo-Afghan war gave a severe blow to British Prestige in India. He was termed as most
unsuccessful Governor-General of India and is known for his follies in Afghan wars.
Last Mughal Emperor

On 28 September 1837 , the last Mughal Emperor Bahadur Shah Zafar who used to write Ghazals
and Shayari with his pen name “Zafar” sat on the throne of the Mughal Empire which was now
limited to Red Fort of Delhi. He was son of Akbar-II.
The stupefied Afghan projects of Lord Auckland forced the superiors sitting in England to recall
him back to pavilion. He was succeeded by Lord Ellenborough in 1842. Lord Ellenborough
remained Governor General of India for 2 and half years till 1844. This pompous military
general type of Governor, who was sent to “restore peace in Asia” ; had actually devastated
Kabul on arrival and later conquered Sind for Britain. So Lord Ellenborough is best known for
Conquest of Sind.
Lord Dalhousie (1848–1856)

Lord Dalhousie served as Governor General of India from 1848 to 1856. During this period,
Second Anglo-Sikh War (1849) was fought in which the Sikhs were defeated again and Dalhousie

was successful in annexing the whole of Punjab to the British administration. He annexed many
states by doctrine of lapse. During his tenure, first railway line between Bombay and Thane was
opened in 1853 and in the same year Calcutta and Agra were connected by telegraph. His other
reforms include setting up of P.W.D. and passing of the Widow Remarriage Act (1856).
Doctrine of Lapse
Dalhousie implemented the Doctrine of Lapse whereby
in the absence of a natural heir, the sovereignty of Indian
states was to lapse to the British and such rulers were not
permitted to adopt a son to inherit their kingdoms.
Dalhousie himself was not the author of this doctrine. In
1844, the Directors of the Company had declared that the
permission to adopt on the failure of natural heirs
“should be the exception not the rule” and should
never be granted but as a special mark of favour or
approbation”. As per this doctrine, on the failure of
natural heirs, the sovereignty passed on the paramount
power. Although it was not a policy of Dalhauise’s
predecessors, but he found it convenient way of
extending Company’s territories. We note here that
Dalhousie practically applied this doctrine on dependent
states only. The dependent states were one of the three
categories of states as follows.
 Those rulers who did not pay any tribute to the

British Government and never accepted the paramountcy of the British power in India were
under independent States
 Those States and Rajas who had accepted the paramountcy of the British Government and
paid a regular tribute.
 They were called Protected allies.
 Those Rajas and Chieftains who had been placed or installed on the throne by the British
Government and had been given letter of authority for their re-installation as Rajas; were
called dependent States
The second category mentioned above needed to take necessary permission from the company for
adopting son to succeed to throne. The permission was dependent on personal whim and wish of
British. It was third category which was not allowed to adopt a son at all.
Application of the Doctrine

Annexation of Satara
The Raja of Satara died in 1848 without leaving any natural heir. However, he had adopted a son
before his death. But this adoption was declared invalid on the pretext that he had not taken the
sanction for the same. The Court of Directors declared that a dependent principality like that of
Satara could not pass on to an adopted son without the consent of the paramount power. Satara

was thus annexed to the British Empire. This annexation was unjust because British had entered
into a treaty on the basis of equality.
Annexation of Nagpur
Raja of Nagpur had died in 1853 and before his death he had directed his Rani to adopt a son. Rani
adopted Yashwant Rao as per Hindu customs and law. But this annexation was not recognized by
Dalhousie and Nagpur was annexed.
Annexation of Jhansi
After the death of Rao Ram Chandra in 1835 his adopted son had not been recognised by the British
who placed Raghunath Rao on the throne of Jhansi. Raghunath Rao was succeeded by Gangadhar
Rao who died in 1853. Before his death he had adopted Anand Rao as his son. Dalhousie refused
to recognise him and annexed the State of Jhansi. Laxmi Bai of Jhansi played a very prominent role
in the mutiny of 1857 in order to take her revenge.
Annexation of Sambhalpur In the case of Sambhalpur the deceased Raja had not adopted any son.
In 1849 before his death he had expressed the view that his people might obtain the protection of
the British after his death. Consequently Dalhousie annexed the State of Sambalpur.
Annexation of Jaitpur The State of Jaitpur {in Bundelkhand} was also annexed to the British
dominion because its ruler died in 1849 without leaving an issue. Annexation of Bhagat It was a
petty hill State in Punjab and was annexed for want of natural heir to the throne after the death of
its ruler in 1850.
Annexation of Udaipur The State was annexed to the British dominion in 1852 when its ruler did
leaving no heir to the throne.
Criticism of the Doctrine of Lapse

The distinction between independent allies, dependent and subordinate states was only an
artificial one. Any State could be annexed by merely stating that it was a dependent State. There
was not court of appeal to challenge the decision of the Court of Directors of the Company. Lord
Dalhousie applied the doctrine to serve the imperial designs. His highhandedness becomes quite
evident from the fact that some of his decisions were set aside by the Court of Directors. They did
not allow the annexation of State of Kasouli. The States of Bhagat and Udaipur were also restored
to their former Rajas by Lord Canning.
Annexation of Oudh 1856

The Punjab and Pegu were the conquests of war. The states of Satara, Jhansi, Nagpur, and
Sambhalpur had fallen in by the “Doctrine of Lapse“. The Kingdom of Oudh was the only great
Indian state whose ruler Nawab Wajid Ali Shah was dispossessed on the ground of “intolerable
misgovernment”. The British alleged that the Nawab who had made a treaty with Lord Wellesley
to establish such a system of administration as would be conducive to the “prosperity of the
subjects” were entirely and continuously neglected and the whole of Awadh had fallen into the
constantly increasing confusion, violent disorders, tumults, brigandage and widespread
oppression of the people. Awadh was annexed finally in February 1856 via a proclamation and

before the end of the month, the tenure of Lord Dalhousie ended and he was replaced with the
Governor Generalship of Lord Canning.
Indian Railway Begins Journey 1853

The 800-mile telegraph line from Calcutta to Agra was opened in March, 1854, and two years
later 4000 miles were in operation, including lines to Bombay and Madras. The telegraph played
an important role during those times and is credited to have saved India in mutiny of 1857.
Telegraph communication between India and England was opened in 1865 by the Persian Gulf
line.
 During the times of Lord Dalhousie, a separate Lieutenant Governor was appointed for the
Presidency of Bengal so that it could immediately relive the Governor General of India from
the pressure of local administration.
 In April 1854. Fredrick J Halliday was appointed the First Lieutenant Governor General
of Bengal under the provisions of Charter act of 1853. The cool hill town of Shimla was
made the summer capital of the British Empire.
 The Artillery headquarters of the army was moved from Calcutta to Meerut. The army
headquarter was shifted to Shimla.
 It was during Lord Dalhousie’s time that Gurkha regiments came into force.
 The Postal system was improved and all-important towns were linked by the Telegraph
lines. The important reform during this period was Wood’s Dispatch of 1854.

Wood’s Despatch of 1854
Charles Wood, a British Liberal politician and Member of Parliament sent the “Wood’s
despatch” to the Governor General Lord Dalhousie recommending some important changes in
education system. As per this despatch:
 An education department was to be set in every province.

 Universities on the model of the London University be established in big cities such as
Bombay, Calcutta and Madras.
 At least one government school be opened in every district. Affiliated private schools
should be given grant in aid.
 The Indian natives should be given training in their mother tongue also.
 Wood’s Despatch is called Magnacarta of English Education in India.
In accordance with Wood’s despatch, Education Departments were established in every province
and universities were opened at Calcutta, Bombay and Madras in 1857 on the model of the
London University. Later more universities were opened in Punjab in 1882 and at Allahabad 1887.
Charter Act of 1853

Charter Act of 1853 was the last charter act passed for East India Company. It was passed on
expiry of charter act of 1833. The charter was renewed but no substantial changes were made.
However, this was for the first time, that this charter act, unlike other charter acts, did not fix any
limit for the continuance of the administration of the company in India. The act provided that the
Indian territories will remain under the Governance of the company, until the parliament
otherwise directed.
Reduction in Number of Directors In England, Charter Act of 1853 reduced the number of
Directors of the Company from 24 to 18. Out of these 18, six were to be appointed by the crown.
Separate Governor for Presidency of Bengal The Charter act of 1853 provided for appointment of
a separate Governor for the Presidency of Bengal, distinct from the Governor General. However,
the court of Directors and the Board of Control were authorized to appoint a lieutenant governor,
till the appointment of a Governor was made. Please note that the Lieutenant governor was
appointed in 1854, but no Governor was appointed for Bengal till 1912.
Power to constitute a new Presidency This act also empowered the Court of Directors either to
constitute a new Presidency (In lines of Presidency of Madras or Bombay) or appoint a Lieutenant
Governor. No new presidency was constituted but in 1859, a new Lieutenant governor was
appointed for Punjab.
Expansion of Governor General’s Office Charter Act of 1853 marks the expansion of the Council
of the Governor General for legislative purposes. The fourth member was placed at an equal status
with other members. The council of legislative purposes which had 6 members now was expanded
to 12 members.
These 12 members were :
1. The Governor General =1

2. The commander in Chief =1

3. Members of the Governor General’s Council=4
4. Chief Justice of the Supreme Court (Calcutta)=1
5. A regular judge of the Supreme court Calcutta=1
6. Representative members drawn from the company’s servants with 10 years
minimum tenure and appointed by the local governments of Bengal, Madras,
Bombay and North Western provinces=4
Total =12
Genesis of Indian Civil Services
The previous charter act of 1833 had laid down that the Court of Directors should nominate
annually 4 times as many candidates as there were vacancies, from whom one should be selected
by competitive examination. The charter act of 1833 also provided the Haileybury college of
London should make quota to admit the future civil servants. However, this system of an open
competition was never effectively operated. A committee under the chairmanship of Lord
Macaulay had prepared the regulations in this context. The report said that:
 Haileybury should cease to be maintained as higher education college for the ICS There
should be a broad general education rather than specialized education for the ICS recruits
 The recruitment should be based upon an open competitive examination to bring out the
best candidates and not through mere superficial knowledge
 The appointments should be subject to a period of probation.
 Charter Act of 1853 deprived the Court of Directors of its right of Patronage to Indian
appointments and now it was to be exercised under the regulations.
 This was the Birth of Civil Services which was thrown in 1854 for open competition.
New provinces
By that time, the administrative situation got hard due to annexation of new territories to the
company’s possession in India. The Charter Act of 1853 empowered the Governor General of
Indiain Council to take over by proclamation under his immediate authority and management of
the territories for the time being. He was authorized to issue necessary orders and directions for
its administrations or provide for its administration. This resulted in creation of Assam, the central
provinces, and Burma
Significance of Charter Act 1853

The Charter Act 1853 indicated clearly that the rule of the Company was not going to last a long
time. The power and influence of the company were curtailed. British Crown could nominate six
Directors. Further, marks the beginning of Parliamentary system in India because of the key feature
that Legislative Council was clearly distinguished from the Executive Council. The Governor
General was relieved of the administrative duties of Bengal. He was to devote his whole time to
work for the Government of India.

Changes and Impact: Indian Economy
The circumstances in which the East India Company came to India were primarily the evolution
of merchant capitalism in Europe. The East India Company was originally a trading company
and its main aim was to establish profitable trade with India. It was driven by economic interests
throughout. Even the political gains were inspired by economic interests. Consequently, when the
company gained political supremacy in India, governance degenerated into a tool for maximising
company's profits, instead of being a vehicle for public welfare. The most visible impact of the
British rule in India was therefore the impoverishment of the common man and exploitation of
peasants and artisans.
The East India Companies of Europe, including the English Company, were the earliest joint
stock companies of the world. Today we see that business in India is dominated by companies
which sell stocks and shares to raise capital, as compared to single proprietorship or even
partnership. This is because the joint stock structure allows these companies to raise a much larger
quantity of capital and also ensures continuity of business over a longer period of time.
From the time of its inception, the Company was granted exclusive control of trade with India and
other countries in the Indian Ocean. This was done because
 Firstly, it was felt that the state must promote foreign trade to bring home wealth. The risky
trade with distant countries was particularly in need of such government protection.
 Secondly, the merchants of the East India Company were also relatively wealthier and more
influential in the monarch's court and were able to secure monopoly rights for the company.
However, legal monopoly is one thing, and to make it effective in practice is quite another. From
mid-18th century onwards, the Company's management had to struggle very hard to make its
monopoly rights effective and exclude others form Indian trade.
Company policy of Merchant Trade
The business model of the company was simply, 'buying cheap and selling dear'. If you wish to
buy cheap, you will find it helpful to have fewer buyers in the market. Thus, reduction of
competition was an important aim. For this, the Company resorted to all sorts of means including
legislation, force and even warfare. The East India Company capitalised on the weakness of
successor states and bribed and bullied them into granting the Company special trade privileges.
From the last decades of the 18th century, peasants and artisans (particularly the indigo cultivators
and weavers) were subjected to coercive practice in order to procure goods at cheap prices and
even coerce them into producing goods for the Company.
With the ongoing industrial revolution in England, it now sought new markets for its
manufactures, particularly cotton manufactures. Also, it now needed more raw material than
before to feed its rapidly growing industries. Thus, the whole basis of economic relationship
between India and England was steadily changing. As England rapidly transformed into the
world's first industrial capitalist country, the merchant company that had acquired the Indian
Empire was now required to fulfil a different role.

Initially, the English made only voyages to India for trade by a ship or two. But no large-scale
trade was possible in this manner as it was not possible to procure large quantities of goods at a
short notice when a merchant ship arrived. Therefore, it became necessary to set up 'factories',
meaning trading stations for storing goods for export.
“No production activity was carried out in these factories and the officials posted here were
called 'factors’”
Naturally, the East India Company, like others, wanted to protect these factories and began
building 'forts' around them. This may have become all the more necessary in the view of declining
Mughal power. However, gradually the Companies began to cross the reasonable limits of
fortification and militarised their trading stations into centres of armed power, challenging the
local governments. These forts began to provide the nucleus around which the Company spread
its control over surrounding territory. Such an evolution of the East India Company, from voyage
system to territorial power, helped it immensely in increasing its business and profits in many
ways. It was useful to have military power to bully and coerce the peasants and artisans to produce
goods on dictated terms, to eliminate rivals and even to extract special trade privileges form local
powers. Lastly and most importantly, the control over territories brought in land revenue like the
classic example of Bengal-after its victory in the Battle of Buxar, the East India Company acquired
the Diwani of Bengal in 1765. Form 1765 the Company began using the land revenue collected
from Bengal to pay for exports
from India, greatly reducing
bullion export from England
that was required earlier. In
short, the territorial
ambitions of the East India
Company made a lot of
economic sense.
Consequently, the East India
Company emerged as the
most powerful territorial
power in India by the
beginning of 19th century.
Trade to Land Revenue

From the mid-18th century till
1813, the Company's directors
had to struggle very hard to
retain Company's effective
monopoly for many reasons:
 There were always

merchants and adventurers
who somehow managed to

make their way into Indian trade.
 The Company's own employees were not above temptation to set up their own private
trade.
 The company's monopoly also · came under severe attack in England owing to the
emergence of the doctrine of Free Trade or laissez faire promoted by economists like Adam
Smith (Wealth of Nations, 1776). The capital accumulating in England also wanted freedom
of investment.
 With the ongoing industrial revolution, the importance of purely merchandising activities
of the Company (i.e. importing goods from India) diminished in comparison with industrial
manufacturing. There emerged strong lobbies in England that began pressurising for the
abolition of the Company's monopoly.
Owing to the above factors, the Company's monopoly was gradually ended by the Charter Acts
of 1813 and 1833. With the prospect of declining income from trade, the Company's financial base
began to shift from trade and commerce to land revenue, from business of trade to business of
government. This naturally pushed the Company to go ahead with continuous territorial
expansion.
Changing Phases: Colonialism to Administrator

1600-1757 – Precolonial Stage
During this period, the role of East India Company in India was like any other trading company-
it brought goods or precious metals into India and exchanged them for Indian goods which it
sold abroad. The company's profits mainly came from sale of Indian goods abroad and so,
naturally, it was interested in production of Indian goods and creation of new markets for them.
This is why Indian rulers encouraged Company's factories in India. With its goods in high demand,
India's balance of trade was highly favourable and the various European trading companies,
including the East India Company competed with one another for their share of Indian trade.
However, soon the British manufacturers grew jealous of the popularity of Indian textiles as the
fine cotton cloth from India began to replace the coarse woollens there. They began to put pressure
on the English government to restrict or prohibit the sale of Indian goods in England. By 1720s,
laws had been passed prohibiting the wear or use of printed or dyed cotton cloth (there was a case
in 1760 when a lady was fined for possessing an imported handkerchief)
Additionally, the English government also imposed heavy duties on the import of plain cloth and
Indian silks. Other European countries such as Holland also followed in the British footsteps.
Despite this, Indian cotton and silk textiles continued to retain their stronghold in certain foreign
markets until mid-18th century, when the English textile industry itself began to develop along
modern lines, thanks to industrial development.
Era of Merchant Capitalism or Mercantilism (1757 to 1813)

This 'mercantilist' phase was marked by direct plunder, exercise of monopoly trade and investment
of surplus revenues in the purchase of Indian finished goods for export to England and Europe.
As mentioned earlier, mercantilism is an economic theory which states that trade generates wealth
and is further stimulated by the accumulation of profitable balances, which a government should

encourage by means of protectionism. Mercantilism emerged as the dominant economic doctrine
of the times and its policy prescription included the following ideas-
 Buy cheap, sell dear: The essence of merchant capitalist operation is to 'buy cheap and sell
dear'. It refers to purchase of goods at cheap rates and sale of goods at very high rates.
 Monopoly control: It refers to monopoly control over trade and elimination of all possible
rivals. It is desirable to have a monopoly in order to achieve the above objective.
 Political control: It is even more desirable to be able to achieve the above objectives with
the use of coercion backed by state power. Hence, the merchants should seek to establish
political control over the countries they traded with.
Thus, the activities of the English East India Company during 1757-1813 were driven by the above
objectives. Determined to buy cheap and sell dear (which is the essence of mercantilism), the East
India Company eliminated rival European companies, dabbled in India politics and waged wars
to establish its political supremacy, which in turn was used to control the economy of India.
Use of State Power for Monopolistic Control (After 1757): The Company's victory in the Battle of
Plassey (1757) brought about a drastic change in the role of the Company in India and its economic
relationship with the country. After Plassey, the East India Company began to use its political
power and position to exercise monopolistic control over Indian trade and production; to buy
cheap and sell dear. An era of trade-cum plunder was launched.

Use of Gomasta System (1753): Up to 1753, the European
Companies and 'free traders' depended on the Indian
merchants to procure cloth: these merchants were called
Dadni merchants since it was through them that dadan
or advance was given by the Company to the artisans or
weavers. From 1753, the Company began to replace the
independent dadni merchants with Gomastas (agents of
the East India Company) who were paid commission on
the cloth collected by them. After Plassey, the Company
used its political power to switch to the Gomasta system,
which reduced the Indian merchants to commissioned brokers, leading to subordination of native
traders and their capital.
Use of 'Direct Agency' System (1789): In 1789, the system of 'direct agency' was introduced, with
which the Company dispensed with the Indian middleman altogether. Similarly, after the
Company became Diwan of Bengal, the banking house of Jagat Seth ceased to be the state banker,
its minting rights were gradually taken away and it also lost its European clients to English banks.
In this way, step by step the Indian businessmen were reduced to a subordinate position or
excluded altogether.
Transfer of Diwani to the British (1765): A period of 'open and unashamed plunder of Bengal'
began, when, after the Battle of Buxar, the East India Company acquired Diwani rights of Bengal.
It was as if the Company had discovered a new mine of gold (i.e. India) and something like 'gold
rush' gripped the English mind. RC Dutt, an Indian Marxist and economist estimated that during
1757-65, the Company's servants exacted an amount which was more than four times the total land
revenue collection of the Nawab of Bengal in 1765, which severely impoverished the peasants. The
peasants were also often compelled to perform forced labour or begar and to pay illegal dues which
pushed them into the hands of the money lenders; indebtedness and evictions became common.
Vast stretches of land began to fall out of cultivation and what followed was the deadly Bengal
famine in which nearly one-third of the population was wiped out
Transfer of Funds: Thus, the Company's accounts now showed 'Territorial Revenue' (i.e. land
revenue collected) alongside 'Commercial Revenue' (i.e. profits of business). The Company began
using its territorial revenue from one region to pay for conquests of other regions. In fact, it was
the Bengal peasant who bore the main burden of British conquest of India. It was also used to
finance Company's exports to Europe and its investment in China to buy tea and silk. Thus, the
Company now ran a perfectly self-contained system, needing no funds from England. This
system continued in full swing from 1765 till 1813 when the Company's monopoly was abolished.
The native Indian courts were the biggest patrons of fancy arts and handicrafts and often employed
the best craftsmen. Their destruction spelled doom upon court artisans as well.
Drain of Wealth: The territorial revenue thus extracted was also used to buy Indian goods
(purchases known as 'Investments') and export them to Britain in the form of 'Indian tribute' to
Britain. This is how there began the 'drain of wealth' or the unilateral transfer of funds from
India. Such exports remitted resources out of India, while India received no imports in return.

Other forms of transfer of funds from Indian to England included business profits of private
traders, earnings of Englishmen from plunder and bribery, payments made to shipping companies,
banks, and insurance companies in England as well as Company's remittance to England. The
remittance was to pay for the salary of Company's employees in England, interest on loans taken
by the Company in England, dividends to the stockholders of the Company, etc. This became
known as Home Charges and was the sum total of money transferred to England by the Company
s government after it stopped trading in 1833. Such a transfer of funds naturally impoverished
India.
Use of Coercion: Even though exports to Britain (in the form of tribute) increased, the Indian
artisans did not gain anything as the company used its political power to bully the weavers and
artisans of Bengal into selling their products at low and dictated prices, even if they incurred a
loss. In fact, the Company's servants coerced the Bengal weavers to restrict their buying and selling
activities to the Company alone (they were forced to buy raw cotton from and sell cloth to the
Company alone). In this way, the Indian weaver lost both ways, as buyer as well as seller, and a
large number of them felt compelled to abandon their ancestral professions.
Khatbandi System: The weavers were even bullied and harassed by the factors, through the
agency of the Gomastas (agents of the East India Company), to accept advance to produce cloth
and then sell their products below market price to the Company. In the 1780s, this practice became
systematised and came to be known as the 'khatbandi system': the artisans were indentured to sell
exclusively to the Company under Regulations passed by the Bengal government. By the
regulation of 1789, they were even forced to pay a penalty of 35% on the advance taken if they
defaulted in supplying the goods. In this way, the Company virtually reduced the weavers to the
status of indentured or bonded labourers, by the denial of free access to the market, by the use of
coercion and by discriminatory laws passed by the Company's government. Similar coercion was
used in the production of indigo under the ryoti system, and to a lesser degree in the production
of opium.
Ryoti System or Asamiwar: Unlike in the case of tea, where crops were produced by hired labour,
in the case of indigo the preferred system was one in which the ryot or peasant could be coerced
into supplying the required product at a very low price, known as the ryoti system. The peasant
had to use his own plough, bullocks, etc., to raise the crop. But he was not paid enough for this by
the planters. The Company found it more profitable to use state power to coerce the small peasant
into unprofitable cultivation rather than engage in direct production with hired labour. In this way,
the Company's commercial production fastened itself on the existing structure of small peasant
production and impoverished it. Such unprofitable cultivation owing to the exacting regime of the
tax collector and the planter checked the growth of a market in land as well, since no one wanted
to buy it. Vast stretched of land fell out of cultivation and famines stared the people of India on
their face.
Domination of Markets and the Producers: By 1770s and 1780s, through use of coercion and state
power, the Company and its servants who engaged in private trade had developed a 'collective
monopoly' in respect of certain commodities, particularly cotton cloth in Bengal. The company
also established its monopoly by eliminating rivals; Indian as well as foreign merchants were

prohibited from offering higher prices to the Bengal handicraftsmen or buying commodities
directly from the producers. A result of this system of monopoly and coercion was the creation of
a buyers' market, i.e. a market where the buyer can dictate the price, (the buyer here being the
English Company and its servants) at the cost of the seller (the seller being the India peasant and
artisan). Such shortsighted policies of the Company to make quick and large profits severely
affected the textile industry and the economy on the whole.
Use of Import Restrictions: Further, Indian textiles were also subjected to heavy import duties
on entering England, since the British government wished to protect its indigenous manufactures.
The Company's own short-sighted policy together with sanctions against Indian import into
Britain resulted in a progressive decline in the export of Indian cotton piece goods.
The income of weavers and spinners was drastically reduced and thereby restricted any possibility
of capital accumulation and technological innovations in this sector of Indian industry (However,
the real blow to Indian manufactures came in 1813, as now they began to lose in their home market
itself). While the system of taking funds out of India was being gradually perfected and India's
traditional manufacturing sector was being steadily weakened under the Company, in the same
period Britain had begun its Industrial Revolution and was rapidly expanding its own industries.
Wealth from India (Plunder of Bengal 1757) played a significant role in the accumulation of capital
in England needed for industrialisation (1760). Britain's Industrial Revolution (1760-1840)
completely transformed Britain's economy and it now sought new markets for its manufactures,
particularly cotton manufactures, which served as the main vehicle of Industrial Revolution in
Britain. Also, it now needed more raw material than before to feed its rapidly growing industries.
Thus, the whole basis of economic relationship between India and England was steadily
changing. As England rapidly transformed into the world's first industrial capitalist country, the
merchant company that had acquired the Indian Empire was now required to fulfil a different role.
Thus, the East India Company used its power and position to transform India into a market for its
industrial goods and a supplier of raw material. Industrial Revolution in Britain further
strengthened this colonial pattern when British manufacturers launched a powerful campaign
against the company (1793-1813) and succeeded in abolishing its monopoly. Now the policy of
free trade was introduced, allowing unrestricted entry of British goods into India that wreaked
havoc on Indian indigenous industry.
Industrial Capitalism 1813 to 1857

India Thrown Open to Machine Made Foreign Goods (1813): This period saw the classic age of
free trader industrial capitalist exploitation. The year 1813 was an important landmark in the
history of colonial exploitation of India as this year marked the end of company's monopoly on
Indian trade. The commercial policy of the East India Company after 1813 was guided by the needs
of British industry and its main aim was to transform Indian into a consumer of British industrial
products and a supplier of raw materials for British industries. The government of India now
followed the policy of free trade and allowed unrestricted entry of British goods. Indian
handicrafts faced unequal competition from machine made goods and faced extinction. The Indian
manufacturers had already lost out in the foreign market owing to import restrictions, now they
began to lose out in their home market itself.

One-sided Free Trade: But this free-trade was only one-sided. While India was thrown open for
foreign goods, Indian products were subjected to heavy import duties in Britain (e.g. in 1824, 67.5
per cent duty was levied on Indian calicos and 37.5% duty on Indian muslin. Duty on Indian sugar
was three times its cost price while that on certain items reached as high as 400%). Accordingly,
Indian exports to England rapidly declined. This changed the character of Indo-British trade. Now
onwards, India became chiefly an importer of goods and the same period. Now the balance of
trade tilted heavily in favour of Britain.
Indian Economy Turned into a Colonial Economy: Gradually, Indian economy was turned into
colonial economy-a supplier for raw materials and a market for finished goods. There was a
marked change in the composition of Indian exports from manufactured goods to primary
products. The local handicraft industry was destroyed and India was converted into a
predominant agrarian economy. This general change in the composition of India's foreign trade
and the resultant impact it had on the country's domestic industry has led many historians (like
RC Dutt, Madan Mohan Malviya and Bipan Chandra) to describe this phenomenon as de-
industrialisation or the destruction of Indian industry.
Changes In Indian Agrarian Structure
Collection of taxes is a business of all governments and the taxes collected are normally spent for
the welfare of the taxpayers. However, the East India Company needed to collect taxes from
people of India to pay for its purchase of goods for export, to meet costs of further conquests
and consolidation of British rule as well as to meet the costs of administration. Since the olden
times, kings and rulers have drawn a large part of their taxes from agriculture, it being the chief
economic activity of a majority of Indian people. With the rise of British supremacy in India, it was
the Company's government which became increasingly involved with the collection of land
revenue. Thus, it is clear from the very outset that the land revenue collected from the Indian 'ryot'
or peasant was spent, not for his welfare, but for meeting the colonial needs of the Company.
Moreover, the Company's land revenue policies were vastly different from the previous eras. They
put in place new types of land revenue settlements to assess and collect these taxes (these were
broadly of three types-Permanent Settlement Ryotwari System and Mahalwari System), new
concepts of land ownership and heavier state demand for land revenue (generally raised to half of
produce from earlier one-sixth or one-third) which triggered far-reaching changes in Indian
agrarian structure, rural economy and social relationships.
New Land Revenue Settlement

The British conquerors were driven by the zeal to derive maximum economic advantage from
their rule in India. After the British industrial and mercantile interests restricted the Company's
capacity to raise revenue from trade, the company's government diverted its attention to land
revenue as principle means of income and as such land revenue matters began to receive the
maximum care and attention of the British rulers. The early British administrators considered India
as a vast estate and felt that the Company was entitled to the entire economic rent, leaving to the
cultivators merely the wages of their labor and expenses of cultivation. Such excessive land
revenue demands soon proved counterproductive. Agriculture became increasingly economically

non-viable, large areas of land fell out of cultivation and famines began to stare people in their
face.
Early Experiments with Land Revenue

After the victory Battle of Plassey (1757), the Company acquired zamindari of 24 parganas from
Bengal Nawab Mir Jafar. In 1760, the East India Company was given rights to collect land revenue
from Burdwan, Midnapur and Chatgaon by Bengal Nawab Mir Qasim. After the victory Battle of
Buxar (1764), the Company acquired the Diwani of Bengal, Bihar and Orissa. During 1765- 72, Clive
introduced dual governance in Bengal. The British decided to continue with the administration
established by the Nawabs of Bengal and use it to collect more and more land revenue The
Company appointed two Naib-Diwans, Mohammad Reza Khan and Raja Sitab Roy for Bengal and
Bihar respectively, and directed them to collect as high revenue as possible (Reza Khan was also
the Naib-Nazim). The Bengal peasant faced some of the worst exactions by the revenue officials
and many of them ran away into the jungles or simply joined the ranks of the robbers. The
avarice and corruption of the Company's employees and their continuous interference in the
administration led to complete disorganisation and worsened the effects of the terrible Bengal
famine of 1769- 70. Harsh measures of revenue collection were adopted so much so that even in
the year 1770, when one-third of Bengal population was wiped out in the famine, the land revenue
was collected satisfactorily. In 1772, it was decided to end the dual system of administration set up
by Clive. The Company now decided to collect land revenue itself and not through the Naib-
Diwan, Thus, the President was required to take over the charge of entire management of revenues
of Bengal, Bihar and Orissa. Accordingly, the Governor and the Council formed the Board of
Revenue and the Company appointed its own European officers called Collectors to manage
revenue affairs. The treasury was also removed from Murshidabad to Calcutta.
Thus in 1772, Warren Hastings introduced a new system, known as the 'farming system' under
which he auctioned the right to collect revenue to the highest bidder. He thus made a 5-year
settlement (quinquennial settlement or panchshala bandobast) of land revenue with the
contractor (known as 'farmer' or 'revenue farmer' in those days) who offered to pay the largest
amount from a certain land area and was given full powers for a period of years. Obviously, these
contractors had no permanent interest in land and tried to extort as much revenue as possible
during the period of their contract. They were not concerned if the people were ruined or the
production declined in later years. After all, they would have made their share of profit. Clearly,
malpractices such as extortion and oppression were a result of such a system. Another significant
result of this system was corruption.
As with many government contracts even today, profitable contracts were given away to friends
and favourites and 'benamidars' of men in power, bringing loss to the government. The officers of
the Company themselves participated in the bidding under the name of their servants. Warren
Hastings himself was accused of such forgery. Hence, this system caused much hardship to the
farmers and failed miserably. After the expiry of the 5-year settlement, Hastings reverted to the
system of annual settlement (salana bandobast) in 1777, once again based on the basis of farming
out estates to the highest bidder. Under both these systems, though the amount of land revenue
was pushed high, the actual collection varied for year to year and seldom matched the official

expectations. This brought instability in the Company's revenues at a time when the Company was
in a continuous mode of expansion. The system was also killing the ryot's or the contractor's motive
to do anything to improve cultivation. It was at this stage the idea of fixing the land revenue at a
permanent amount first emerged and in 1784, under the Pitts India Act, the Company was advised
to introduce permanent land settlement in Bengal. Accordingly, in 1786, Lord Cornwallis was sent
to India specially charged with the duty of cleaning up the system and finding out a satisfactory
solution to the land revenue problem. In 1790, Cornwallis decided to recognize the zamindars as
the owners ofland, subject to annual payment ofland revenue to the state. A ten-year settlement
was made with the zamindars on the basis of 89 per cent of the rental, leaving 11 per cent with the
zamindars. In 1793, this decennial settlement was declared permanent (called Permanent
Settlement of Bengal).
Permanent Settlement (by Cornwallis, Bengal, 1793)
The London authorities as well as Cornwallis could see that the existing system was not
sustainable. It was impoverishing people and destroying agriculture. It was therefore decided that
land revenue should be permanently fixed. The government promised never to increase it in
future. Several positive effects were expected from this system-it would reduce oppression and
corruption activities, it would ensure regular tax collection. It was also expected that now the
landholders will feel motivated to invest in the land since the government will not charge any extra
tax on excess production and the whole benefit will remain with them.
Permanent Settlement was a Settlement with whom and why? After fixing the revenue, the next
question was, from whom was it to be collected? The Nawabs of Bengal had collected it from the

zamindars; the big ones were known as Rajas and had their own armies. The zamindars collected
the revenues directly from the peasants. At times, extra charges or 'abwabs' were also collected.
Permanent Settlement too was made with the Zamindars (though, by now, some of the
zamindars had been replaced by contractors). A special feature of this system was that the
zamindars and the revenue farmers were now converted into landlords; they were now the owners
of the entire land of their zamindari. Their right of ownership was also made hereditary and
transferable. The new governor General Cornwallis himself belonged to landed aristocracy in
Britain and was in favour of ownership rights to the zamindars. He hoped that the zamindars
would improve the land as English landlords had done, since the entire benefit of increase in
productivity will accrue to them alone. Moreover, there must have been 4-5 million cultivating
families in Bengal, Bihar and Orissa at that time and collecting tax from them would have been a
tedious task for the British. It was much simpler option to collect tax from a small number of big
zamindars.
Why were Zamindars Recognized as Owners of Land?: Some historians think that it was by
mistake; the British mistook the zamindar to be the Indian counterpart of the English landlord
(However, it is noteworthy that while the English landlord was the absolute owner of land, the
Indian zamindar was owner of land only in relation to the tenant and not in relation to the state).
Other historians attribute the decision to political, financial and administrative reasons-
 Politically, the British needed to create political allies in India, particularly in view of the
rising popular revolts in Bengal during the last quarter of the 18th century. Later,
developments fully justified this view as the wealthy class of zamindars, who owed their
existence to the British, stood with the British during the rising tide of the national
movement.
 Financially, the newly created property of the zamindars acted as a security against financial
crisis at a time when the Company was constantly engaged in wars of expansion. Further,
the revenue fixed was higher than ever before, at an absolute maximum, allowing the
company to maximise its income.
 Administratively, it was a much simpler option to collect tax from a small number of big
zamindars. It was also hoped that the zamindars would improve the land, since the entire
benefit of increase in agricultural productivity will accrue to them alone.

What was Permanent Settlement? Permanent Settlement was introduced in Bengal and Bihar in
1793. The land revenue was fixed at a very high level Rs 2 crore and 65 lakh. Every bit of land in
these provinces now became a part of some zamindari. The zamindar had to pay a fixed tax (10/11)
upon it. So, long as he paid the tax, he remained the owner of his land. He could sell, transfer or
mortgage it. After his death, his land would be inherited by his heirs. But if he failed to pay the
tax, the government could take away his zamindari and sell it by auction (Sunset Rule). In this
way, the position of zamindars was kept quite precarious:
Negative Impact of Permanent Settlement on Zamindars: Under this system, 10/11 part of the
land tax went to the state while 1/11 belonged to the zamindar. The zamindars found it very
difficult to pay the high tax demanded by the British. As a result, many zamindars lost their
zamindari. Between 1794 and 1819, 68 per cent of zamindari land was sold in Bengal. Many
zamindars further divided their land into smaller estates and permanently rented them to sub-
holders who promised to pay a fixed rent. This gave birth to subinfeudation and furthered
oppression of the cultivators.
Negative Impact of Permanent Settlement on Cultivators: The hereditary rights of the peasants
on land was taken away and given to the zamindars. The cultivators were reduced to the status of
simple tenants of the zamindars. They were also deprived of other customary rights including
right to use pasture and forest lands, irrigation canals, fisheries, protection against rent
enhancement, etc. The land revenue fixed at Rs 2 crore and 65 lakhs was the largest sum that
could be got from the land. It was a heavy assessment that could be collected only by oppressive
means. Further, while the state's demand was fixed, the rent to be realized from the cultivator was
left unsettled. This worsened the position of the actual cultivators of soil, who were now left wholly
at the mercy of the zamindars. Rack-renting, indebtedness and ejections became common. In fact,
as per regulations issued in 1793 and 1799, zamindars could even seize the property of the tenants
who failed to pay the rent, thus legalising harassment. This also encouraged the zamindars to
resort to illegal methods like beating and flogging the tenants for non-payment of the required
amount. In this way, the peasantry was crushed under the triple burden of the government, the
zamindar and the moneylender. The Permanent Settlement ultimately broke down due to
excessive state demand and harshness in its working and collection of revenue.
It was only in 1859 that the Government of India passed a legislation providing limited protection
to old tenants, who were now termed as 'occupancy tenants'.
Areas Covered: Permanent Settlement was introduced in Bengal, Bihar, Orissa, Varanasi and
Gazipur regions of UP and northern Karnataka. It covered 19% area of British India.
The British Disillusionment with Permanent Settlement: As early as 1811, the British had begun
to feel that permanent settlement left no scope for increase in land revenue, even as the
expenditure of the Company's government continued to rise, particularly in view of constant wars.
Some officials had also begun to feel that, back in 1793, the zamindars had got off very easily and
that the mistake should not be repeated.

Ryotwari System
The defects of Permanent Settlement became more prominent with time and the British began to
devise other ways of collecting land-tax. Moreover, new challenges emerged when the British
conquered South and South Western India.
In 1792, two officers Munro and Read were sent to administer the newly conquered regions of
Madras. They found that there were no large zamindars with large estates in these regions with
whom land revenue settlement could be made. They therefore recommended that settlement
should be made directly with the actual cultivators or 'ryots' based on their field assessment, thus
giving rise to the 'Ryotwari System'. Under this system, the cultivator was to be recognized as the
owner of his land so long as he paid the land tax. The tax payable on each field was fixed by a
government officer and then the cultivator had the choice of cultivating the field and paying the
amount, or not cultivating it. The Settlement under this system was not made permanent but was
revised after every 20 or 30 years and the revenue demand was usually raised.
Land Survey and Assessment under Ryotwari: In fixing the assessment, the revenue officers
surveyed each field, considered the soil quality as well as the field area and then fixed the
assessment on it based on their survey. Thus, land revenue assessment under Ryotwari was a
difficult task thousands of fields had to be surveyed and care had to be taken to fix the assessment
such that burden on each field was approximately equal. If the burden was not equally distributed,
then the cultivators would not occupy the heavily assessed ones and the filed would lie fallow.
However, in practice, the Ryotwari System was extended in the Madras Presidency in forms
different from the one originally envisaged by Munro. No survey was carried out in many
districts and assessment was done based on tax paid in previous years, known as 'putcut
assessment'. The government officers also began to compel the ryots to cultivate land against their
wishes and employ oppressive methods of collection, leading to the setting up of Madras Torture
Commission in 1854.
Adoption of Ryotwari in Madras (1820): After some initial experiments, the Ryotwari System was
adopted in Madras presidency in 1820 and Munro himself was appointed as Governor of Madras
to ensure its smooth implantation. Munro advanced many arguments in its favour. He claimed
that this was a system which had always prevailed in India and it was best suited for Indian
conditions. He also pointed out that in Permanent Settlement the Company was a financial loser
as it could not claim a share of the growing income from increased agricultural productivity.
However, the system was mainly adopted because it yielded larger revenue than any other system
as all revenue went to the state and there were no zamindars or other intermediaries who received
any part of the agricultural surplus. The Madras government was always short of funds and
readily introduced the temporary Ryotwari System.
Negative Impact of Ryotwari System: However, Ryotwari System did not bring about a system
of peasant ownership ofland. The government later also declared that the land revenue was rent
and not tax. Also, the revenue was fixed at a very high rate (45-50%), the government could raise
it at will and the ryot had to pay the revenue even when his crop was wholly destroyed. Use of
harsh collection practices was common and included vile practices of torture such as preventing
the defaulters from taking meals or answering nature's calls, tying a man in a bent position or tying

by the hair to the tail of a donkey or a buffalo. On non-payment of land-tax (lagan), land could be
confiscated.
The system caused widespread oppression; the peasantry sank deep in poverty and fell into the
clutches of the chetty (moneylender) whose power and position had greatly risen under the pre
British times, the moneylender was subordinated to village community-he was not allowed to
charge usurious interest rates or confiscate land. But now such malpractices by money lenders
became common . He was also greatly helped by the new revenue policies, the Judicial system and
the police. Impoverishment of the peasantry and ruin of the traditional agrarian structure under
the ryotwari system significantly contributed to the terrible Madras famine of1867-78.
In 1792 Ryotwari System was first implemented in Baramahal district by Colonel Read. After
1820, this system was extended to most of Madras Presidency. Munro was even appointed
Governor of Madras.
By 1825 Ryotwari system was implemented in Madras, Bombay, Coorg , Assam and East Bengal.
It covered nearly 51% of the total presidency area.
Mahalwari System (Northern India, 1822)

Between 1801 and 1806, the British conquered large territories of North India (roughly modern UP)
under the aggressive policies of Lord Wellesley. In 1836, North West provinces were established
by administrative divisions of the region. Initially Wellesley ordered his officials to make the
settlement with zamindars wherever possible provided they agreed to pay high land revenue. But
if Zamindar is not present or they did not agree to pay high land revenue then settlement could be
made village by village giving preference to the village headman or any other respectable ryot of
the village. Ultimately the settlement was to be made permanent like Bengal.\
Accordingly, heavy land revenue was imposed. It was also substantially increased overtime from
Rs 188 Lakhs in 1803-03 to Rs 297 Lakh by 1817-18. Such heavy increases provoked resistance from
many zamindars and many of them were driven away by the news administration. Those who
couldn’t pay their estates were sold away. In such a situation, it became necessary to collect tax
directly from the villages through its headman (pradhan, muqaddam or lambardar). In the revenue
records, the term used for such fiscal unit was mahal and the village wise settlement therefore
came to be known as mahalwari settlement. The term mahal thus meant a village or a Jagir estate.
Under this system, revenue settlement was fixed with each mahal, and not the cultivator.
Negative impact of Mahalwari System: Like in other settlements, even under this system the land
tax demanded was very high creating opportunities for the local officials to practice coercion and
corruption; large areas of land were illegally acquired by them in the early years, bringing about
ruin of the village zamindars. Many Zamindars also fell into the clutches of money lenders and
merchants who often ousted them or reduced them to tenants at will upon non-payment of debt.
In this way, the Mahalwari System brought about ruin in the form of impoverishment and
dispossession of the cultivating communities in North India during the 1830s and 1840s. Their
simmering resentment soon found expression during the Revolt of 1857, when several villagers
and zamindars all over North India attacked the government officials and money lenders; burnt
down their records and accounts.

This system was introduced in North West Province (Awadh, Ganga Valley or UP), Punjab
Province, and Central Provinces. It covered 30 per cent area of British India.
Economic Impact of Various Land Revenue Settlements

The various land revenue settlements introduced by the British meant loss of land for the
landholders (owing to changes in concept of land ownership) and heavy taxation for zamindars
and cultivators. The land revenue assessments under all the systems were heavy and oppressive,
reaching upto 50 per cent or more of the produce and tax was extracted even when the crop was
fully damaged. In such cases, the cultivators had no option but to take loans from the local money
lenders who charged them exorbitant interest rates. This made the cultivators heavily indebted. To
make matters worse, harsh methods of revenue collection were deployed that included coercion,
violence and abuse; with the effect that the land revenue policy of the British resulted in
oppression, frequent evictions, indebtedness, impoverishment and extreme misery for the
agricultural classes. Many of them later participated in the Revolt of 1857, driving away
government officials and burning money lenders' records.
A direct result of the oppression of the peasantry was the stagnation and deterioration of
agriculture and yield per hectare steadily declined. The government also shunned responsibility
and hardly spent any amount on agricultural improvement, agricultural education or public
works.
The heavy burden of tax also distorted the land market. The British made land a commodity
which could be freely bought and sold; a change that had been affected to secure government
income. If land had not been made saleable or mortgageable, the government would have found
it very difficult to raise revenue from a defaulter. Now, such defaulting cultivators could pay
revenue. by borrowing money on the security of his land or even by selling off part of it. The
government could also auction the land and realise the amount. This was a critical change in the
existing land system of India, and it shook up the entire structure of village society and economy.
With the passage of time, land also lost its value as no one wanted to buy it, since the new owner
would have to pay the heavy land revenue.
In fact, the East India Company's new land revenue systems coupled with the new and corrupt
judicial and administrative set up broke down the entire socio-political and economic framework
of the old village communities. Socially, new classes were created; the landlord, the trader, the
moneylender and the new landed gentry emerged. The numbers of the rural poor comprising the
small peasant, the sub-tenant and the agricultural labourer multiplied. The climate of cooperation
was gradually replaced by competition and individualism. Politically, the Village Panchayats
were deprived of their main functions, viz. land settlement and judicial and executive functions.
Economically, agriculture began to emerge as an unviable economic activity, and famines stared
the people of India in their face. Undoubtedly, rural underdevelopment and backwardness in
India is a legacy of the British colonial rule.
Economic Impact Of British Rule In India
The economic impact of British rule under the East India Company (1755-1857), also known as
the process of colonisation of Indian economy, may be understood under the following heads:

1. Disruption of Traditional Economy
2. Ruin of Peasantry and Agriculture
3. Ruin of Old Zamindars and Rise of New Landed Classes
4. Ruin of Artisans and Craftsmen, De-Industrialisation and Ruralisation of Indian Economy
5. Commercialisation of Agriculture
6. Drain of Wealth
7. Poverty and Famines 8. Rise of Modern Industries under the British
8. Rise of New Indian Bourgeoisie
Disruption of Traditional Economy

The rise of British supremacy led to the subordination of Indian economy as per the needs and
interests of the British rulers whose main interests lay in exploitation of Indian resources and
enrichment of their own people at the cost of Indian people. British economic policies such as new
land revenue policies, discriminatory trade restrictions, domination of markets and continuous
conquests had an adverse impact on almost all classes of Indian people from peasants and artisans
upto the ruling class. The British policies brought about a ruin of Indian agriculture, trade and
industry and resulted in a complete breakdown of the traditional economic structure. The self-
sufficiency of the villages was destroyed and Indian economy was rapidly transformed into
colonial economy.
Ruin of Old Zamindars and Rise of New Landed Classes

The old zamindars were replaced by a new class of landlords, particularly under the land
revenue settlements of Warren Hastings. By 1815, nearly all great zamindars of Bengal were
ruined and replaced by merchants and moneyed classes who lived in towns (absentee
landlordism), had no permanent interest in land and tried to extort as much revenue as possible
during the period of their contract. Clearly such a system further accelerated the impoverishment
of the peasantry, impoverishment of land and stagnation and deterioration of agriculture.
De-Industrialisation and Ruralisation of Indian Economy

De-industrialisation refers to the process of continued and marked industrial decline. With
reference to India, it refers to the destruction of traditional Indian craft industries as one of the
earliest the consequences of British rule in India. The cotton-weaving and cotton-spinning
industries were the worst hit. Strangely, while India's traditional manufacturing sector was being
steadily weakened under the Company; in the same period Britain had begun its Industrial
Revolution and was rapidly expanding its own industries. Wealth from India (Plunder of Bengal
1757) played a significant role in the accumulation of capital in England needed for
industrialisation (1760).
Various causes of de-industrialisation under the British rule are listed as follows:
 Misuse of political power: The British used political power to bully the weavers and
artisans of Bengal into selling their products at low and dictated prices, even if they incurred
a loss. This forced many of them to leave their profession. The Khatbandi System which
virtually reduced the weavers to the status of indentured or bonded labourers.

 Creation of a buyers' market: The British created a buyers' market where the buyer can
dictate the price, (the buyer here being the English Company and its servants) at the cost of
the seller (the seller being the India peasant and artisan).
 Destruction of regional powers and their courts: The princely states were the biggest
buyers of handicraft, luxury commodities and military weapons. Their decline gave a big
blow to these industries.
 Westernisation of Indian educated middle class: This class imitated European standards
and scorned on everything Indian.
 Import restrictions: This ruined the foreign market of Indian artisans.
 Forced policy of British Free Trade with India: Far from providing protection to Indian
industries, the British opened Indian market to British manufactured goods, thus ruining
the home market of Indian artisans. Many indigenous industries faced unequal competition
with imported machine-made goods and perished.
 Development of railways: Besides other things, the railway policy of the government
discriminated against Indian goods such that transportation oflndian goods was costlier
than that of British goods.
 Lack of government support: The British government extended no support, financial or
otherwise to heavy or capital goods industry (First steel in India was produced as late as in
1913!) and to technical education.
 Import of cheap synthetic dyes destroyed dying industry of Indian villages.
 Export of raw materials from India.
 Grant of special privileges to British manufacturers in India.
The ruin of Indian industries was reflected in the ruin of once famous industrial centres like
Dhaka, Surat and Murshidabad. Destruction of handicraft industry ruined the independence of
villages, forced artisans to leave their profession and become labourers and made the economy
predominantly agrarian. This increasing dependence of the population on agriculture for
subsistence and increasing tendency to produce agricultural goods and raw materials, to the
neglect of industrial development, has been described by historians as trend towards ruralisation
or peasantisation of Indian economy.
The change was the most glaring in the cotton textile industry-India that had been for centuries
the largest exporter of cotton goods in the world, was now transformed into an importer of cotton
goods and exporter of raw cotton! This was a direct result of deindustrialisation and comprised
yet another impact of British rule on Indian economy. During the National Movement, Britain's
role in de-industrialisation of India and its callous indifference towards development of
modern industry became a rallying point against the colonial rule. Several efforts were made to
revive indigenous industries, particularly by Congress and Gandhiji. Gandhi formed All India
Spinners Association and All India Village Industry Association.
Commercialisation of Agriculture
Commercialisation simply means production of agricultural crops for sale in market, rather than
for family consumption. In the process of commercialisation, markets for certain products may
develop before others. Commercialisation of agriculture existed even under the Indian rulers,

for instance the cultivators were selling their products for money in order to pay land tax. But the
commercialisation under the East India Company was different in many ways:
 Forced commercialisation: For the Indian peasant, commercialisation under the Company's
rule was a forced process. Often the cultivator had to hurriedly sell off a part of his produce
at whatever price it fetched in order to meet the high land revenue demand of the state and
interest of the moneylender.
 Selective commercialisation: Initially the company also exported Indian manufactures,
particularly textiles. But after the Industrial revolution, the cotton mill industry grew in
Britain. Soon the mill owners agitated against the East India Company claiming that the
Indian fabrics injured their business. The company was now forced to promote other safe
lines of export and agriculture products was one such line. These products would not
compete with British products and could also serve as raw materials for British industry.
Thus, the East India Company being a trading company, it brought about commercialisation
of those crops and agri-products which would not compete with British products and had
a demand in the European market at the same time (such as indigo, cotton, raw silk, opium,
pepper, tea, sugar, etc.). These were sown at the cost of food grains in India. Further, the
British bought tea from China and paid for it in silver as the Chinese did not want Western
goods. But the Chinese did buy Indian products like ivory, raw cotton and opium. So, the
British East India Company gradually brought about commercialisation of these
commodities in India-the tea could be got in exchange for Indian products. This trade came
to be known as 'triangular trade' with main trading points at Calcutta, Canton and London
with wealth accumulating at London.
 At the cost of drain of wealth: Earlier there was little demand for British goods in India. So,
the company purchased Indian goods in gold and silver bullion. After the conquest of
Bengal, it made these purchases from revenue collected from Indian subjects. This resulted
in drain of wealth from India.
Commercialisation of Agriculture – Effects

 Exploitation of Indian peasants: Except in the case of tea, the crops were not produced by
hired labour. Say in the case of indigo, the referred system was to coerce the small peasants
into supplying the required product at very low price (called the Ryoti System). In this way,
commercial production fastened itself on the existing structure of small peasant production,
and impoverished it. The European businessmen found it profitable to squeeze the small
peasant household than to engage in direct production with hired labor, thus preventing
the appearance of developed labour market. Further, the Indian cultivators were often
forced to grow these crops against their wishes. They were also forced to sell them to the
British at as low cost as possible. This often drove them into the clutches of local
moneylenders and created heavy indebtedness.
 Market instability: Agriculture in India was already exposed to many hazards such as
droughts and floods, but commercialisation of agriculture added another hazard-the
instability associated with widely fluctuating world markets. For instance, Bundelkhand
grew a lot of cotton for the China market after 1816. Claiming that the region had become
very prosperous, the British officials raised the land revenue. But when the export declined

in the 1830s and prices fell, the taxes were not reduced. Both landlords and peasants were
pushed into deep poverty and vast stretches of land went out of cultivation, culminating
in the Bundela Rebellion of 1842. Thus, while product market was commercialised, land
and labour could not develop.
 Famines: Commercialisation of agriculture contributed to famines by substituting food
grains for commercial crops as well as by increasing instances of land falling out of
cultivation because it was no longer profitable to cultivate it.
 Impoverishment of India: You have seen that the crops were produced for exports to
Britain. These were bought from land revenue collected from British territories in India and
transferred in the form of 'tribute' to Britain. In this way, such exports remitted resources
out of India, while India received no imports in return. Such a transfer naturally
impoverished India.
Positive Impacts of Commercialization of Agriculture:

In spite of having many negative effect commercializations in one sense was progressive event.
Commercialisation encouraged social exchange and it made possible the transformation of Indian
economy into capitalistic form. Commercialisation linked India with world economy. It led to the
growth of high level social and economic system. The important contribution of commercialisation
reflected in integration of economy. It also created a base for growth of national economy
commercialisation of agriculture led to growth of national agriculture and agricultural problem
acquired national form. It also brought about regional specialization of crops on an efficient basis.
Drain of wealth
The constant flow of wealth from India to England for which India did not get an adequate
economic, commercial or material return has been described by Indian national leaders and
economists as ‘drain’ of wealth from India. The colonial government was utilizing Indian
resources- revenues, agriculture, and industry not for developing India but for its utilization in
Britain. If these resources been utilised within India then they could have been invested and the
income of the people would have increased. The drain of wealth was interpreted as an indirect
tribute extracted by imperial Britain from India year after year.
Early Drain of wealth
In the mercantilist concept an economic drain takes place if gold and silver flow out of the
country as a consequence of an adverse balance of trade. In the 50 years before the battle of
Plassey, the East India Company had imported bullion worth £ 20 million into India to balance the
exports over imports from India. British government adopted a series of measures to restrict or
prohibit the imports of Indian textiles into England. Apart from other measures, in 1720 the
British government forbade the wear or use of Indian silks and calicoes in England on pain of a
penalty on the weaver and the seller.
After Plassey the situation was reversed and the drain of wealth took an outward as England
gradually acquired monopolistic control over the Indian economy. So, the ‘Drain of wealth’ from
India to England started after 1757 (Battle of Plassey), when the Company acquired political power

and the servants of the Company a ‘privileged status’ and, therefore, acquired wealth through
dastak, dastur, nazarana and private trade.
After the East India Company extended its territorial aggression in India and began to administer
territories and acquired control over the surplus revenues of India, the Company had a recurring
surplus which accrued from:
 profits from oppressive land revenue policy,

 profits from its trade resulting from monopolistic control over Indian markets,
 exactions made by the Company’s officials.
This entire ‘surplus’ was used by Company as an “investment” i.e. for making purchases of
exportable items in India and elsewhere. Against the exports of goods made out of this
‘investment’, India did not get anything in return.
This is how there began the ‘Drain of Wealth ‘which was nothing but a unilateral transfer of fund;
the Early nationalist leaders made this point central to their economic criticism of the British
colonialism.
Dadabhai Naoroji’s theory of the Drain of Wealth
Dadabhai Naoroji was the first man to say that internal factors were not the reasons of poverty
in India but poverty was caused by the colonial rule that was draining the wealth and prosperity
of India. The drain of wealth was the portion of India’s wealth and economy that was not available
to Indians.
The Drain of Wealth theory was systemically initiated by Dadabhai Naoroji in 1867 and further
analysed and developed by R.P. Dutt, M.G Ranade etc In 1867, Dadabhai Naoroji put forward the
‘drain of wealth’ theory in which he stated that the Britain was completely draining India. He
mentioned this theory in his book Poverty and Un-British Rule in India. He put forward the idea
that Britain was draining and bleeding India and that, too, for nothing. Further in his book , he
stated the loss of 200-300 million pounds of revenue to Britain. Dadabhai Naoroji considered it as
a major evil of British in India. Naoroji observed in 1880,“It is not the pitiless operations of
economic laws, but it is thoughtless and pitiless action of the British policy; it is pitiless eating
of India’s substance in India and further pitiless drain to England, in short it is pitiless
perversion of Economic Laws by the sad bleeding to which India is subjected, that is destroying
India.” On the footsteps of Dadabhai Naoroji, R. C. Dutt also promoted the same theory by
keeping it as a major theme of his book Economic History in India. M.G Ranade published books
on Indian economics. He also talked about drain of wealth and saw the need for heavy industry
for economic progress and believed in Western education as a vital element to the foundation of
an Indian nation.
John Sullivan, President of the Board of Revenue, Madras, had wrote—”Our system acts very
much like a sponge, drawing up all the good things from the banks of the Ganges, and squeezing
them down on the banks of the Thames.”

Factors of External Drain
1. Home charges refer to the interest on public debt raised in England at comparatively
higher rates; expenditure incurred in England by the Secretary of State on behalf of India;
2. Annuities on account of railway and irrigation works;
3. Indian office expences including pensions to retired officials who had worked in India or
England, pensions to army and navals etc.
4. Remittances to England by Europeans to their families
5. Remittances for purchase of British Goods for consumption of British employees in India.
6. Interest charges on public debt held in Britain
7. Also, trade as well as Indian labour was deeply undervalued.
What were the constituents of drain of wealth?
The drain of wealth mainly consisted of the following:
Home Charges:
 Home charges refer to the expenditure incurred in England by the Secretary of State on
behalf of India. Before the Revolt of 1857 the Home charges varied from 10% to 13% of the
average revenues of India. After the Revolt the proportion shot up to 24% in the period
1897-1901. In 1901-02, the Home charges amounted to £ 17.36 million. During 1921-22, the
Home charges sharply increased to 40% of the total revenue of the Central Government.
The main constituents of Home charges were:
 Dividend to the shareholders of the East India Company

 Interest on Public Debt rose abroad: The East Indian Company had piled up a public debt
to dislodge Indian rulers from their Principalities. By 1900 the public debt had risen to £ 224
million. Only part of the debt was raised for productive purposes i.e., for construction of
railways, irrigation facilities and public works.
 Civil and Military charges: These included payments towards pensions and furloughs of
British officers in the civil and military departments in India, expenses on India Office
establishment in London, payments to the British war office etc. All these charges were
solely due to India’s subjection to foreign rule.
 Store purchases in England: The Secretary of State and the Government of India purchased
stores for the Military, Civil and Marine Departments in the English market. The annual
average expenditure on stores varied from 10% to 12% of the Home charges between 1861-
1920.
Council Bills
Council Bills were the actual means through which money was transferred (It is not a legislation).
This also caused drain of wealth. We will try to understand what is Council Bills (Even if you don’t
understand, you can leave it). Council Bills are best explained by quoting from Sir John
Strachey’s lectures given in 1888. ‘The Secretary of State draws bills on the Government treasury
in India, and it is mainly through these bills, which are paid in India out of the public revenues,
that the merchant obtains the money that he requires in India and the Secretary of State the money

that he requires in England. In other words, would be British purchasers of Indian exports bought
Council Bills from the Secretary of State in return for sterling (which was used to meet the Home
Charges).
The Council Bills were then exchanged for rupees from the Government of India’s revenues.
Next the rupees were used to buy Indian goods for export. Conversely, British officials and
businessmen in India bought Sterling Bills in return for their profits in rupees from British owned
Exchange Banks; the London branches of these tanks paid in pounds for such bills with the money
coming from Indian exports” purchased through-the rupees obtained through sale of Sterling Bills.
Interest on Foreign Capital Investments

Interest and profits on private foreign capital were another important leakage from the national
income stream. Finance capital entered the Indian market in the 20th century. Foreign capitalists
were the least interested in industrial development of India. Rather they exploited Indian resources
for their own benefit and Infact thwarted indigenous capitalist enterprise by fair and foul means.
Foreign Banking
For banking, insurance and shipping services India had to make huge payments. Apart from
constituting a drain on Indian resources, unrestricted activities of these foreign companies stunted
the growth of Indian enterprise in these spheres.
Q. What were the Impact of the Drain Theory in the Growth of Economic Nationalism?
 Of all the national movements in colonial countries, the Indian national movement was the
most deeply and firmly rooted in an understanding of the nature and character of colonial
economic domination and exploitation.
 Its early leaders, known as the moderates were the first in the 19th century to develop an
economic critique of colonialism.
 The focal point of the nationalist critique of colonialism was the drain theory. The nationalist
leaders pointed out that a large part of India’s capital and wealth was being transferred or
drained to Britain in the form of salaries and pensions of British civil and military officials
working in India, interests on loans taken by the Indian government, profits of the British
capitalists in India and the home charges or expenses of the Indian Government in Britain.
 This drain took the form of an excess of exports over the imports for which India got no
economic or national return. According to the nationalist calculations, this chain amounted
to one-half of the government revenues more than the entire land revenue collection and
over one-third of India’s total savings.
 The acknowledged high priest drain theory was Dadabhai Naroji. It was in May 1867 that
Dadabhai Naroji put forward the idea that Britain was draining and bleeding India. From
then on for nearly half a century he launched a raging campaign against the drain,
hammering at the theme through every possible form of public communication. R.C. Dutt
made the drain the major theme of his Economic History of India.
 He protested that taxation raised by a king is like the moisture sucked up by the sun, to be
returned to earth as fertilizing rain, but the moisture raised from the Indian soil now
descends as fertilizing rain largely on other lands, not on India.

 The drain theory incorporated all the threads of the nationalist critique of colonialism, for
the drain denuded India of the productive capital its agriculture and industries so
desperately needed. Indeed the drain theory was comprehensive, inter-related and
integrated economic analysis of the colonial situation.
 The drain theory had far reaching impact on the growth of the economic nationalism in
India. Banking on this theory the early nationalists attributed the all encompassing poverty
not as a visitation from God or nature. It was seen as man-made, and therefore capable of
being explained and removed.
 Based on the drain theory of Dadabhai Naroji, the nationalists came to see the foreign capital
in perilous terms. They came to regard foreign capital as an unmitigated evil, which did not
develop a country but exploited and impoverished it. Dadabhai Naroji saw foreign capital
to be representing despoliation and exploitation of Indian resources.
 It was further argued that instead of encouraging and augmenting Indian capital, foreign
capital replaced and suppressed it, led to the drain of capital from India and further
strengthened the British hold over Indian economy.
 According to them, the political consequences of foreign capital investment were no less
harmful for the penetration of foreign capital led to its political subjugation. Foreign capital
investment created vested interests which demanded security for investors and therefore
perpetuated foreign rule.
 The drain by taking form of excess of exports over imports, led to progressive decline and
ruin of India’s traditional handicrafts. The British administrators pointed with pride to the
rapid growth of India’s foreign trade and rapid construction of railways as instruments of
India’s development as well as proof of its growing prosperity.
 However, because of their negative impact on indigenous industries, foreign trade and
railways represented not economic development but colonization and under development
of economy. What mattered in case of foreign trade was not its volume but its pattern or
nature of goods internationally exchanged and their impact on national industry and
agriculture. And this pattern had undergone drastic changes during the 19th century, the
bias being overwhelmingly towards the export of raw materials and the import of
manufactured goods.
 According to early nationalists, drain constituted a major obstacle to rapid industrialization
especially when it was in terms of policy of free trade. The policy of free trade was on the
one hand ruining India’s handicraft industries and on the other forcing the infant and
underdeveloped modern industries into a premature and unequal and hence unfair and
disastrous competitive with the highly organized and developed industries of the west. The
tariff policies of the Government convinced the nationalists that the British economic
policies in India were guided by the interest of British capitalist class.
 For the early nationalists the drain also took the form of colonial pattern of finance. Taxes
were so raised as they averred, so as to overburden the poor while letting the rich especially
the foreign capitalists and bureaucrats to go scot-free. Even on expenditure side, the
emphasis was on serving Britain’s imperial needs while the developmental and welfare
departments were starred.

 By attacking the drain the nationalists were able to call into question, in an uncompromising
manner the economic essence of imperialism, the drain theory and the agitation by
nationalists on economical hegemony of alien rulers over India. The secret of the British
power in India lay not only in physical force but also in moral force that is in the belief that
the British were the patrons of the common people of India. The nationalist drain theory
gradually undermined these moral foundations.
 The economic welfare of India was offered as the chief justification for the British rule by
the imperialist rulers and spokesmen. The Indian nationalists by their forceful argument
asserted that India was economically backward precisely because the British were ruling it
in the interest of British trade; industry and finance were the inevitable consequences of the
British rule.
 The corrosion of faith in the British rule inevitably spread to the political field. In course of
time, the nationalist leaders linked nearly every important question with the politically
subordinated status of the country. Step by step, they began to draw the conclusion that
since the British administration was only the handmade to the task of exploitation, pro-
Indian and developmental policies would be followed only by a regime in which Indians
had control over political power.
 The result was that even though the early nationalists remained moderates and professed
loyalty to British rule, they cut at the political roots of the empire and sowed in the land, the
seeds of disaffection and disloyalty and even sedition. Gradually, the nationalists veered
from demanding reforms to begin demanding self government or swaraj.
 The nationalists of the twentieth century were relying heavily on the main themes of their
economic critique of colonialism. These themes were then to reverberate in Indian villages,
towns and cities. Based on this firm foundation, the later nationalists went on to stage
powerful mass agitations and mass movements. The drain theory thus laid the seeds for
subsequent nationalism to flower and mature.
Rise of Modern Industries under the British

The British did not plan to bring about any industrial or economic development in India. However,
the need for better imperial control and fuller exploitation of Indian resources led them to
construct roads, railways, post and telegraph lines, develop ports, irrigation works, banking and
insurance facilities, etc-developments that later provided the material basis for emergence of
modern industry in India. An important social consequence of this limited industrial development
was the emergence of the industrial capitalist class and the working class. Even as these classes
formed a minuscule part of the Indian population, they represented new technology, new social
relations and new outlook with the consequence that their economic and political contribution in
19th and 20th centuries far outweighed their numbers.

Roads and Indian Railways
Upto the 1850s, the means of transport in India were confined to animal driven carts. Driven by
the need for imperial defence from both external and internal threats and fuller exploitation of
Indian resources, the British began development of roadways, railways and waterways.
 In 1839, work on the Grand Trunk Road from Calcutta to Delhi was started and completed
in 1850s. However, real change came with the introduction of Indian Railways.
 The First railway engine was designed by George Stephenson. In 1814, it was first put on
the rails.
 In 1849, Lord Dalhousie became GovernorGeneral of India and advocated rapid railway
construction.
 In 1853, first railway line in India was laid in between Bombay and Thane by Great Indian
Peninsula Railway.
 In 1854, 120-mile railway line was laid between Calcutta and Raniganj by East India
Railway.
Postal System and Telegraph

 For Communication, the British set up an efficient Postal system. Dalhousie introduced the
first postage stamps in India.
 The telegraph was also introduced.

 In 1853, first telegraph line was opened from Calcutta to Agra. Until 1857, Dr.
O'Shaughnessey's (a professor of chemistry in Calcutta Medical College) instrument was
used all over India. Later, it was replaced by the Morse instrument.
Press
 In 16th century, Press was first introduced in India by the Portuguese.
 Early attempts to publish newspapers were made by the disgruntled East India Employees.
 In 1780, the first newspaper in India was published by James Augustus Hickey titled The
Bengal Gazette.
New Indian Bourgeoisie
Some Indian traders, money lenders and bankers got to amass some wealth as junior partners of
English traders and businessmen and emerged as the new Indian middle class. The Indian traders
helped in the distribution of British manufactures in the remotest corners of India and
collection of raw materials for export to Britain. The money lenders lent money to the
agriculturalists in distress and ensured collection of land revenue by the government. The bankers
helped both in carrying out their businesses and other financial transactions. It was this very class
that initially formed the Westernised loyalists but later evolved into the educated Indian
intelligentsia and raised the banner of the national movement in the second half of the 19th
century. One such cotton trader was Dadabhai Naoroji (1825-1917), who devoted his entire life to
the creation of a national movement in India. To sum up, in this chapter we have studied the main
motive of the English Company in India was to maximise its profits. All other purposes were
subordinated to this aim and all its activities were guided by it, including acquisition of political
hegemony and territorial expansion. After Plassey, the Company emerged supreme in Bengal and
began using its political power for its own commercial gains. The more powerful the Company
grew, the more tightly it gripped the Indian economy and sucked away its vitality. One by one
it wreaked havoc on Indian peasants, artisans, traders and businessmen, ate into their share of
profits and rendered their industry financially unviable. Plunder of Bengal, drain of wealth, de-
industrialisation, commercialisation of agriculture and ruralisation of Indian economy were some
of the major impacts of the Company's policies in India. We may conclude that the British Rule
had a far-reaching impact on India life, particularly the economy which was gradually
transformed into a fully developed colonial economy by the end of the 19th century.

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RANGANATHAN SVN KONDALA'S

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 1492, Columbus discovered North America.

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Prince Henry the Navigator: Prince Henry .- of

Bartholomew Diaz (1487): In 1487 Bartholomew

Pedro Álvares Cabral - September 1500, Pedro

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The Portuguese trading points or factories on land were

Estado da India, 1503-04

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Nino de Cunha (1529-38): He was the

Decline of the Portuguese

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Dutch East Indies

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British East India Company

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Captain Hawkins (1608)

Moreover, Hawkins had to leave Agra owing to Portuguese

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French East India Company

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Difference between nature of early French and British settlement

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The First Carnatic war in India began with

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After the capture of Madras occurred that celebrated

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Importance of the battle of St. Thomé:

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(2)Second Carnatic War (1749–1754):

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Struggle of Succession of Nizam-ul-Mulk of Hyderabad(Deccan) and Stuggle for throne of

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The Siege of Arcot (1751):

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They became impatient; and at length decided

(3)Third Carnatic War (1757–1763):

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