European traders reach India
In 1498 the Portuguese sailor Vasco da Gama reached Calicut by sea. After him came the Dutch, the English and the French. Each country made a trading company. The English East India Company was set up in 1600.
They wanted Indian spices, fine cotton and silk cloth, indigo and saltpetre. They built factories (warehouses with guards) at places like Surat, Madras, Bombay and Calcutta. The companies often fought each other to get the most trade.
How the East India Company took power
The Company slowly turned its forts and soldiers into political power.
Key steps
- 1757 Battle of Plassey: the Company defeated Siraj-ud-daulah, the Nawab of Bengal, with help from his own commander Mir Jafar.
- 1764 Battle of Buxar: the Company beat the joint army of the Nawab of Bengal, the Nawab of Awadh and the Mughal emperor.
- 1765 Diwani: the Mughal emperor gave the Company the right to collect land revenue (tax) in Bengal, Bihar and Orissa.
Later the Company used wars, the Subsidiary Alliance (Indian rulers had to keep and pay for Company troops) and the Doctrine of Lapse (a kingdom with no natural heir was taken over) to grab more land. After the great revolt of 1857, the British Parliament ended Company rule and the Crown ruled directly from 1858.
Economic exploitation: the drain of wealth
Exploitation means using someone unfairly for your own gain.
- High land tax: systems like the Permanent Settlement (1793), ryotwari and mahalwari took a large share of the harvest, often in cash, even in bad years.
- Cash crops: farmers were pushed to grow indigo, cotton, jute and opium for export instead of food. Famines became deadly.
- Raw material out, goods in: India sent raw cotton to British mills and bought back machine cloth. British goods paid little tax; Indian goods sent to Britain paid heavy tax.
- Drain of wealth: salaries, pensions and profits were sent to Britain. Dadabhai Naoroji called this the "drain".
Impact on society, education and crafts
Crafts
Cheap factory cloth made Indian hand-woven cloth too costly. Weavers of Dhaka, Bengal and the south lost work; many towns that lived on crafts shrank. This is called de-industrialisation.
Education
From 1835 the government backed English education to train clerks. Universities opened in Calcutta, Bombay and Madras in 1857. Traditional schools (pathshalas, madrasas) lost support. Educated Indians, however, used new ideas to question British rule.
Society
Railways (first passenger train 1853), telegraph and post linked the country, mainly to move troops, raw material and goods. Reformers like Raja Ram Mohan Roy and Ishwar Chandra Vidyasagar fought customs such as sati and child marriage. Peasant, tribal and soldier revolts, and from 1885 the Indian National Congress, built the freedom struggle that ended in 1947.
Key formulas and definitions
- Colonialism: one country rules another land and uses its people and resources for its own gain.
- Factory (old meaning): a fortified trading warehouse of a European company.
- Diwani: the right to collect land revenue (tax).
- Subsidiary Alliance: an Indian ruler pays for Company troops and loses freedom in foreign affairs.
- Doctrine of Lapse: a state with no natural male heir is taken over by the Company.
- Drain of wealth: Indian money and goods flowing to Britain with nothing equal coming back.
- De-industrialisation: decline of local crafts and industry.
Worked examples
1. Why is 1765 often called the year the Company became a ruler and not just a trader?
In 1765 the Mughal emperor gave the Company the diwani of Bengal, Bihar and Orissa. Collecting tax is a power of a government, so from then on the Company ran a state and used Indian tax money to buy Indian goods for export.
2. A weaver in 1780 sells a cloth for 10 rupees. By 1830 machine cloth of the same kind sells for 4 rupees. What happens to the weaver and why?
Buyers choose the cheaper machine cloth, so the weaver cannot sell at 10 rupees. Cotton yarn also becomes costly because raw cotton is shipped to Britain. Many weavers leave the craft and become farm labourers. This shows de-industrialisation.
3. Was English education only harmful? Give one negative and one positive effect.
Negative: traditional schools lost funds and the aim was to produce clerks for the rulers. Positive (unintended): Indians read about liberty and equality and used these ideas to demand freedom.
Common mistakes
- Thinking the British came as an army. They first came as traders and turned into rulers step by step.
- Mixing up Plassey (1757) and Buxar (1764). Plassey came first.
- Saying railways were built mainly for Indians. They were built mostly to move troops, raw materials and British goods.
- Believing colonial rule began and ended with the Company. Company rule ended in 1858; Crown rule lasted until 1947.