From Trade to Territory-The Company Establishes Power Class 8 History Notes

History Notes based on Chapter 2 of the CBSE Class 8 NCERT book: Here with this chapter, we embark on a fascinating journey that uncovers how the Company’s pursuit of trade eventually paved the way for territorial conquest and colonial dominance. Let us unravel the captivating tale of power consolidation by the British East India Company.

After Aurangzeb’s Death

  • Aurangzeb was the last influential ruler of the Mughal Empire. After his death, the Mughal Empire declined and various regional kingdoms emerged.
  • The British East India Company emerged as a new political power in India in the second half of the eighteenth century. They initially arrived as a small trading company, but eventually became masters of a vast empire.
  • Despite the absence of powerful Mughal rulers after Aurangzeb, the Mughal emperors still held symbolic significance. Bahadur Shah Zafar, the Mughal emperor at the time of the 1857 rebellion, was considered a natural leader. However, after the rebellion was suppressed, Bahadur Shah Zafar was compelled to leave his kingdom, and his sons were executed.

East India Company Comes East

  • The East India Company was granted a charter by Queen Elizabeth I of England in 1600, giving it exclusive rights to trade with the East.
  • The company aimed to find new lands with cheap goods to buy and sell them in Europe at higher prices, without competition from other English trading groups.
  • However, other European powers, including the Portuguese, Dutch, and French, were already active in the Eastern markets.
  • The competition for Indian goods, such as cotton, silk, pepper, cloves, cardamom, and cinnamon, increased prices and reduced profits for the trading companies.
  • Fierce battles, sinking of ships, blockades, and fortifications were common as trading companies sought to eliminate rival competitors.
  • The East India Company’s efforts to establish trading posts and fortify settlements led to conflicts with local rulers.
  • The company struggled to separate trade from politics, further complicating its operations.

East India Company Begins Trade in Bengal

  • The first English factory of the East India Company was established on the banks of the river Hugli in 1651.
  • The factory served as a base for the Company’s traders, known as “factors,” and included a warehouse and offices for Company officials.
  • As trade expanded, the Company encouraged merchants and traders to settle near the factory, leading to the growth of the settlement.
  • In 1696, the Company began constructing a fort around the settlement, and it obtained zamindari rights over three villages, including Kalikata, which later became Calcutta (Kolkata).
  • The Company obtained a farman from the Mughal emperor Aurangzeb, granting it the right to trade duty-free.
  • The Company sought additional concessions and manipulated its existing privileges, such as refusing to pay duty on private trade, causing a significant loss of revenue for Bengal.
  • The Nawab of Bengal, Murshid Quli Khan, had reasons to protest against the Company’s actions.

Trade Led to Battles

  • The conflict between the East India Company and the nawabs of Bengal intensified during the early 18th century.
  • After the death of Aurangzeb, the nawabs of Bengal, including Murshid Quli Khan, Alivardi Khan, and Sirajuddaulah, asserted their power and autonomy.
  • The nawabs refused to grant concessions to the Company, demanded large tributes for trading rights, denied the Company the right to mint coins, and prevented the expansion of its fortifications.
  • The nawabs accused the Company of deceit, claiming it deprived the Bengal government of revenue and undermined their authority.
  • The Company argued that unjust demands from local officials were harming its trade and that trade could only flourish if duties were removed.
  • Both sides engaged in confrontations, leading to the famous Battle of Plassey.

The Battle of Plassey and Company’s Assumption of Diwani

  • After Alivardi Khan’s death in 1756, Sirajuddaulah became the nawab of Bengal, causing concern for the East India Company.
  • The Company attempted to support a rival of Sirajuddaulah but failed, leading to tensions.
  • Sirajuddaulah captured Company officials, blocked their ships, and marched to Calcutta to control the Company’s fort.
  • Company forces, led by Robert Clive, engaged in negotiations with the nawab and eventually defeated him at the Battle of Plassey in 1757.
  • Mir Jafar, one of Sirajuddaulah’s commanders, betrayed him and supported Clive, ensuring the Company’s victory.
  • The Battle of Plassey marked the Company’s first major triumph in India, resulting in Sirajuddaulah’s assassination and Mir Jafar becoming the nawab.
  • The Company aimed to expand trade rather than directly administer territories, but found it difficult to work with puppet nawabs.
  • The Company deposed Mir Jafar, installed Mir Qasim, but eventually reinstated Mir Jafar after conflicts and complaints.
  • The Company sought increased revenue and territories, leading to the assumption of Diwani in 1765, appointed by the Mughal emperor.
  • The Diwani granted the Company control over the revenue resources of Bengal, allowing them to finance expenses, purchase textiles, and build fortifications.

Company Officials as “Nabobs”

  • After the Battle of Plassey, Company officials were given land and significant sums of money by the nawabs of Bengal.
  • Many Company servants aspired to live like nawabs and accumulate wealth and power.
  • Robert Clive, a prominent Company official, amassed a substantial fortune in India and faced scrutiny from the British Parliament due to his wealth.
  • While some officials, like Clive, became incredibly wealthy, not all were successful in making money.
  • Many officials from humble backgrounds aimed to earn enough in India to lead a comfortable life in Britain.
  • Those officials who returned to Britain with wealth were referred to as “nabobs,” a term derived from the Indian word nawab.
  • Nabobs were sometimes viewed as social climbers and upstarts in British society and were often ridiculed in plays and cartoons.

Expansion of Company Rule

  • The East India Company employed political, economic, and diplomatic methods to expand its influence and annex Indian states between 1757 and 1857.
  • Direct military attacks on unknown territories were rare, with the Company utilizing other means to extend its control.
  • Following the Battle of Buxar in 1764, the Company appointed Residents in Indian states who acted as political or commercial agents, serving the Company’s interests.
  • Company officials, through the Residents, interfered in the internal affairs of Indian states, influencing succession and administrative appointments.
  • The Company imposed “subsidiary alliances” on some states, wherein rulers were not allowed independent armed forces and had to rely on the Company’s protection.
  • Indian rulers were required to pay for the “subsidiary forces,” and failure to make payments resulted in territorial penalties.
  • For instance, under Governor-General Richard Wellesley, the Nawab of Awadh lost over half of his territory in 1801 due to non-payment, and Hyderabad also ceded territories for similar reasons.

The “Tiger of Mysore”

  • The East India Company engaged in direct military confrontation when its political or economic interests were threatened, as exemplified by its actions against the state of Mysore.
  • Mysore had become powerful under the leadership of Haidar Ali (1761-1782) and his son Tipu Sultan (1782-1799).
  • Mysore controlled the lucrative trade of the Malabar coast, a significant source of pepper and cardamom for the Company.
  • In 1785, Tipu Sultan halted the export of sandalwood, pepper, and cardamom through his kingdom’s ports and restricted local merchants from trading with the Company.
  • Tipu Sultan developed close ties with the French in India and modernized his army with their assistance.
  • The British perceived Haidar and Tipu as ambitious and dangerous rulers who needed to be controlled.
  • Four wars were fought against Mysore (1767-69, 1780-84, 1790-92, and 1799), with the Company achieving victory in the final Battle of Seringapatam.
  • Tipu Sultan was killed while defending his capital, Seringapatam, and Mysore was placed under the rule of the Wodeyars, a former ruling dynasty.
  • A subsidiary alliance was imposed on Mysore as part of the Company’s control.

War with the Marathas

  • The East India Company aimed to diminish and ultimately eliminate Maratha power from the late 18th century.
  • The Marathas’ aspirations of ruling from Delhi were shattered after their defeat in the Third Battle of Panipat in 1761.
  • The Marathas were divided into various states under different chiefs, including Sindhia, Holkar, Gaikwad, and Bhonsle.
  • The chiefs were united under a confederacy led by a Peshwa, who held military and administrative authority from Pune.
  • The Company engaged in a series of wars to subdue the Marathas.
  • The First Anglo-Maratha War (ended in 1782) resulted in no clear victor.
  • The Second Anglo-Maratha War (1803-1805) expanded British territories, including Orissa and territories north of the Yamuna River.
  • The Third Anglo-Maratha War (1817-1819) crushed Maratha power, leading to the removal of the Peshwa and granting the Company complete control over territories south of the Vindhyas.

The Claim to Paramountcy

  • From the early 19th century, the East India Company pursued an aggressive policy of territorial expansion.
  • Under Lord Hastings (Governor-General from 1813 to 1823), the Company introduced the concept of “paramountcy,” asserting its authority as supreme over Indian states.
  • The Company justified annexing or threatening to annex any Indian kingdom to protect its interests.
  • Challenges to this policy of expansion and annexation arose, such as the resistance led by Rani Channamma of Kitoor and later by Rayanna.
  • In the late 1830s, the Company became concerned about Russian expansion and sought to secure control over the north-west region of India.
  • The Company engaged in a war with Afghanistan (1838-1842) and established indirect rule there.
  • Sind was taken over by the Company in 1843.
  • The Company’s ambitions turned toward Punjab, but the presence of Maharaja Ranjit Singh initially hindered their efforts.
  • After the death of Ranjit Singh in 1839, the Company fought two prolonged wars with the Sikh kingdom, ultimately annexing Punjab in 1849.

The Doctrine of Lapse and Annexations

  • Under Lord Dalhousie, the Governor-General from 1848 to 1856, the East India Company implemented the policy known as the Doctrine of Lapse.
  • The Doctrine of Lapse stated that if an Indian ruler died without a male heir, their kingdom would automatically become part of Company territory.
  • Using this doctrine, the Company annexed several kingdoms: Satara (1848), Sambalpur (1850), Udaipur (1852), Nagpur (1853), and Jhansi (1854).
  • In 1856, the Company also took over Awadh, using the argument of “freeing the people from misgovernment” as their justification.
  • The annexation of Awadh and the humiliating manner in which the Nawab was deposed played a significant role in sparking the revolt that broke out in 1857, known as the Indian Rebellion or the Sepoy Mutiny.

Setting up a New Administration

  • Warren Hastings, the Governor-General from 1773 to 1785, played a significant role in expanding Company power and introducing administrative reforms.
  • British territories were divided into three Presidencies: Bengal, Madras, and Bombay, each ruled by a Governor, with the Governor-General as the supreme head of administration.
  • Hastings implemented reforms in the sphere of justice, establishing criminal and civil courts in each district.
  • Local laws were interpreted by Maulvis and Hindu pandits for European district collectors in civil courts, while criminal courts remained under the supervision of a qazi and a mufti.
  • To address variations in interpretations of local laws, a digest of Hindu laws was compiled in 1775, later translated into English by N.B. Halhed. A code of Muslim laws was also compiled.
  • The Regulating Act of 1773 established a new Supreme Court and a court of appeal called the Sadar Nizamat Adalat in Calcutta.
  • The Collector held a prominent role in Indian districts, responsible for revenue collection, tax collection, and maintaining law and order with the assistance of judges, police officers, and darogas.
  • The Collectorate, the office of the Collector, became the new center of power and patronage, replacing previous holders of authority.

The Company Army

  • The power of colonial rule in India was largely dependent on the military strength of the East India Company.
  • The Mughal army consisted primarily of cavalry and infantry, with the cavalry dominating the army.
  • The Mughal state relied on armed peasants and local zamindars to supply foot soldiers (paidal) rather than maintaining a large professionally trained infantry.
  • In the 18th century, Mughal successor states like Awadh and Benaras started recruiting and training peasants as professional soldiers.
  • The East India Company adopted a similar approach, recruiting and training soldiers for its own army, which came to be known as the sepoy army.
  • As warfare technology changed in the 1820s, the cavalry requirements of the Company’s army declined, and the importance of infantry regiments increased.
  • The British introduced European-style training, drill, and discipline, which regulated the lives of the soldiers to a greater extent.
  • This created challenges as caste and community identities were often disregarded in building a professional military force.
  • The individual experiences and reactions of the sepoys to these changes in their lives and identity are reflected in the events of the Revolt of 1857.


The East India Company evolved from a trading company to a colonial power with territorial control over a significant portion of the Indian subcontinent. The introduction of steam technology in the early 19th century facilitated faster travel to India, allowing more British individuals and families to settle in the region. By 1857, the Company directly ruled around 63% of the territory and 78% of the population of India. Its influence extended indirectly over the remaining territories and populations. In essence, the East India Company had achieved virtual control over the entire Indian subcontinent.

List of Governor Generals and Viceroys of India during British Rule 

Governors General of the Presidency of Fort William (Bengal) – (1773-1833)

Warren Hastings(1732–1818)20 October 1773 – 8 February 1785
John Macpherson(acting)(1745–1821)8 February 1785 – 12 September 1786
Charles Cornwallis(The Marquess Cornwallis)(1738–1805)12 September 1786 – 28 October 1793
John Shore(1751–1834)28 October 1793 – 18 March 1798
Alured Clarke(acting)(1744–1832)18 March 1798 – 18 May 1798
Richard Wellesley(1760–1842)18 May 1798 – 30 July 1805
The Marquess Cornwallis(1738–1805)30 July 1805 – 5 October 1805
Sir George Barlow(acting)(1762–1847)10 October 1805 – 31 July 1807
The Lord Minto(1751–1814)31 July 1807 – 4 October 1813
Francis Rawdon-Hastings(1754–1826)4 October 1813 – 9 January 1823
John Adam(acting)(1779–1825)9 January 1823 – 1 August 1823
The Lord Amherst(1773–1857)1 August 1823 – 13 March 1828
William Butterworth Bayley(acting)(1782–1860)13 March 1828 – 4 July 1828

Governors-General of India (1833-1858)

Lord William Bentinck(1774–1839)4 July 1828 – 20 March 1835
Charles Metcalfe(acting)(1785–1846)20 March 1835 – 4 March 1836
The Lord Auckland(1784–1849)4 March 1836 – 28 February 1842
The Lord Ellenborough(1790-1871)28 February 1842 – June 1844
William Wilberforce Bird(acting)(1784-1857)June 1844 – 23 July 1844
Henry Hardinge(1785-1856)23 July 1844 – 12 January 1848
The Earl of Dalhousie(1812-1860)12 January 1848 – 28 February 1556
The Viscount Canning(1812-1862)28 February 1856 – 31 October 1858

Governors-General and Viceroys of India (1858-1947)

The Viscount Canning(1812-1862)1 November 1858 – 21 March 1862
The Earl of Elgin(1811-1863)21 Mach 1862 – 20 November 1863
Robert Napier(acting)(1810-1890)21 November 1863 – 2 December 1863
William Denison(acting)(1804-1871)2 December 1863 – 12 January 1864
Sir John Lawrence(1811-1879)12 January 1864 – 12 January 1869
The Earl of Mayo(1822-1872)12 January 1869 – 8 February 1872
Sir John Strachey(acting)(1823-1907)9 February 1872 – 23 February 1872
The Lord Napier(acting)(1819-1898)24 February 1872 – 3 May 1872
The Lord Northbrook(1826-1904)3 May 1872 – 12 April 1876
The Lord Lytton(1831-1891)12 April 1876 – 8 June 1880
The Marquess of Ripon(1827-1909)8 June 1880 – 13 December 1884
The Earl of Dufferin(1826-1902)13 December 1884 – 10 December 1888
The Marquess of Lansdowne(1845-1927)10 December 1888 – 11 October 1894
The Earl of Elgin(1849–1917)11 October 1894 – 6 January 1899
The Lord Curzon of Kedleston(1859-1925)6 January 1899 – 18 November 1905
The Earl of Minto(1845-1914)18 November 1905 – 23 November 1910
The Lord Hardinge of Penshurst (1858-1944)23 November 1910-4 April 1916
The Lord Chelmsford(1868-1933)4 April 1916 – 2 April 1921
The Earl of Reading(1860-1935)2 April 1921 – 3 April 1926
The Lord Irwin(1881-1959)3 April 1926 – 18 April 1931
The Earl of Willingdon(1866-1941)18 April 1931 – 18 April 1936
The Marquess of Linlithgow(1887-1952)18 April 1936 – 1 October 1943
The Viscount Wavell(1883-1950)1 October 1943 – 21 February 1947
The Viscount Mountbatten of Burma(1900-1979)21 February 1947 – 15 August 1947

Governors-General of the Dominion of India

The Viscount Mountbatten of Burma (1900-1979)15 August 1947 – 21 June 1948
Chakravarti Rajagopalachari (1878-1972)21 June 1948 – 26 January 1950

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