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East India Company


Coat of Arms of the East India Company

  • In 1600, the East India Company acquired a licence to trade, from Queen Elizabeth I, of England.

  • The company got the sole right to trade with Eastern countries. No other company in England was given the right to trade.

  • The company soon established itself in many countries in the East. It bought goods at a cheap rate from these countries, transported it to Europe and sold it there at a higher rate.

  • The East India Company was the most powerful corporation the world has ever seen.
  • The Company started importing spices from the East Indies and became prosperous and it slowly conquered India and finally it governed India.

    As mentioned earlier the East India Company had the sole trading rights in England, but there were also other European countries which entered the Eastern market.

Let us take a brief look at the other trading companies that came to the Indian shores.

  • Vasco da Gama, a Portuguese explorer, discovered a sea route to India in 1498.

  • He was the commander of the first ships to sail directly from Europe to India.

  • The Portuguese traders landed in the western coast of India, and established themselves in Goa.

Vasco da Gama

Vasco da Gama with his ships at Calicut, in 1498

The route followed in Vasco da Gama's first voyage


1. During the 17th century the Dutch also started trading in India.

2. Soon after the Dutch the French entered the market.

The Portuguese, the Dutch, the French and the British companies were only interested in buying the same things from India, namely:-

  • Cotton

  • Silk

  • Pepper

  • Cloves

  • Cardamom

  • Cinnamon

As all the companies wanted the same goods, there was stiff competition among them.


This competition resulted in…

  • Fierce clashes between the trading companies

  • Sinking of each others ships

  • Blocking routes

  • Prevented rival ships from moving with supplies of goods

  • Conflict with local rulers

Soon trade and politics became two sides of a coin.

Establishment of Trade in India by East India Company

Let us now see how East India Company established trade in India and also entered the political scene.

  • East India Company started its first factory in West Bengal, on the banks of the River Hugli, in 1651.

  • The ‘factory’ was actually a ware-house were the goods purchased from the Indian market was stored, before it was exported to European countries.

  • As trade developed, the Company asked local merchants, who acted as middle –men for them, to come and settle near the ‘factory’.

  • By 1696, the Company built a fort around the settlement of merchants.

  • In 1698, the company got zamindari rights for 3 villages, from the Mughal ruler.

    • One of the three villages is present day Kolkata.

    • Soon the Company got the rights to trade without paying any taxes, from Emperor Aurangzeb.

      The company started taking more and more liberties from the Mughal rulers. This soon led to conflicts with the Nawab of Bengal.

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