Chapter 2 – From Trade to Territory – Class 8 Notes

Students, if you have any queries, please leave a comment below! I will try my best to answer your queries with more details.

From Trade to Territory: The Company Establishes Power – Class 8 Notes

Aurangzeb and the Mughal Empire

• Aurangzeb was the last significant Mughal ruler.
• He controlled a large territory that mostly covers modern-day India.
• After Aurangzeb’s death in 1707, the central power of the Mughal Empire weakened.
• Regional powers, like Mughal governors (subadars) and big landlords (zamindars), started to assert their authority.
• These regional kingdoms began to establish themselves independently, reducing the influence of Delhi as a central power.

Emergence of the British

• As the Mughal Empire declined, a new power began to rise in India—the British.
• Initially, the British came to India as a small trading company.
• They were hesitant to acquire territories and were focused on trade.

Symbolic Importance of the Mughals

• Even after the decline of Mughal power, the emperors remained symbolically important.
• During the 1857 rebellion against British rule, Bahadur Shah Zafar, the Mughal emperor, was seen as a natural leader.
• After the rebellion was suppressed, the British forced Bahadur Shah Zafar to leave the kingdom.
• His sons were executed by the British.

East India Company Comes to the East

• In 1600, the East India Company received a charter from Queen Elizabeth I of England.
• This charter gave the Company exclusive rights to trade with the East, meaning no other English trading group could compete.
• The Company was allowed to explore new lands, buy goods at low prices, and sell them at higher prices in Europe.
• Without competition from other English companies, the East India Company could focus on maximizing its profits.

Challenges from Other European Powers

• The charter did not protect the East India Company from competition with other European nations.
• By the time the first English ships reached India, the Portuguese were already present on the western coast with their base in Goa.
• Portuguese explorer Vasco da Gama had discovered the sea route to India in 1498.
• The Dutch and the French also started exploring trade opportunities in the Indian Ocean during the early 17th century.

Competition and Conflicts

• All the European trading companies were interested in the same Indian goods: fine cotton, silk, and spices like pepper, cloves, cardamom, and cinnamon.
• This competition increased the prices of these goods, reducing potential profits.
• To protect their interests, the trading companies often engaged in fierce battles, attacking each other’s ships and blockading trade routes.
• These companies also fortified their trading posts to protect their settlements and maintain control over their trade.
• The East India Company found it challenging to keep trade and politics separate as conflicts with local rulers intensified due to these fortifications and competition for control.

Also Check – Events and Key incidents from the Chapter- “From Trade to Territory: The Company Establishes Power”

East India Company Begins Trade in Bengal

• In 1651, the East India Company established its first factory on the banks of the river Hugli.
• This factory served as the base for the Company’s traders, known as “factors.”
• The factory included a warehouse for storing goods meant for export and offices for Company officials.

Expansion and Fortification

• As the Company’s trade expanded, it encouraged merchants and traders to settle near the factory.
• By 1696, the Company began constructing a fort around the settlement to protect its interests.
• In 1698, the Company bribed Mughal officials to obtain zamindari rights over three villages.
• One of these villages was Kalikata, which later developed into the city of Calcutta (now Kolkata).

Securing Trade Privileges

• The Company persuaded Mughal Emperor Aurangzeb to issue a farman (royal order) granting the Company the right to trade without paying duties.
• However, Company officials engaged in private trade alongside official business.
• These officials were supposed to pay duties on their private trade, but they refused, leading to significant revenue losses for Bengal.

Nawab’s Protest

• The refusal of Company officials to pay duties on their private trade caused financial strain on Bengal.
• The Nawab of Bengal, Murshid Quli Khan, was understandably upset and protested against this exploitation.

How Trade Led to Battles

Rising Tensions with the Nawabs of Bengal

• In the early 18th century, conflicts between the East India Company and the Nawabs of Bengal grew more intense.
• After Aurangzeb’s death, the Nawabs of Bengal, like other regional powers, began to assert their independence.
• The Nawabs, starting with Murshid Quli Khan, followed by Alivardi Khan, and then Sirajuddaulah, were strong rulers who resisted the Company’s demands.

Nawab’s Actions Against the Company

• The Nawabs refused to give the Company further concessions.
• They demanded large tributes in exchange for allowing the Company the right to trade.
• The Nawabs denied the Company the right to mint its own coins and stopped them from expanding their fortifications.
• The Nawabs accused the Company of deceit, claiming it was depriving Bengal of significant revenue and undermining their authority.
• The Company was also accused of refusing to pay taxes, writing disrespectful letters, and trying to humiliate the Nawab and his officials.

The Company’s Response

• The Company argued that the local officials’ demands were unjust and were ruining its trade.
• It believed that trade could only flourish if all duties were removed.
• The Company was convinced that to expand its trade, it needed to enlarge its settlements, buy more villages, and strengthen its forts.

Conflict Escalation

• These ongoing tensions and confrontations eventually led to open conflict.
• The growing disputes between the Company and the Nawabs culminated in the famous Battle of Plassey.

Also Check – List of Important Figures mentioned in the Chapter – From Trade to Territory- The Company Establishes Power

The Battle of Plassey

Sirajuddaulah Becomes Nawab

• In 1756, after the death of Alivardi Khan, Sirajuddaulah became the Nawab of Bengal.
• The East India Company was wary of Sirajuddaulah’s power and preferred a ruler who would grant them trade concessions and privileges.
• The Company unsuccessfully tried to support one of Sirajuddaulah’s rivals to become the Nawab.

Conflict with the Company

• Sirajuddaulah, angered by the Company’s interference in Bengal’s politics, demanded that they stop fortifying their settlements, cease meddling in political affairs, and pay the required revenues.
• After failed negotiations, Sirajuddaulah led an army of 30,000 soldiers to the English factory at Kassimbazar.
• He captured Company officials, seized the warehouse, disarmed the Englishmen, and blockaded their ships.
• Sirajuddaulah then marched to Calcutta to take control of the Company’s fort.

The Battle of Plassey (1757)

• Upon hearing about the fall of Calcutta, Company officials in Madras sent forces under Robert Clive, supported by naval fleets.
• After prolonged negotiations, Robert Clive led the Company’s army against Sirajuddaulah at Plassey in 1757.
• The Nawab’s forces were weakened because Mir Jafar, one of his commanders, did not fight in the battle. Clive had promised to make Mir Jafar the Nawab if he helped defeat Sirajuddaulah.
• The Battle of Plassey was a decisive victory for the Company and marked its first major triumph in India.

Aftermath of the Battle

• Following the defeat at Plassey, Sirajuddaulah was assassinated, and Mir Jafar was installed as the new Nawab.
• The East India Company did not initially want to take over the administration; its main goal was to expand trade.
• The Company preferred to work with local rulers who would grant them privileges without needing to conquer territories directly.
• However, even puppet nawabs like Mir Jafar and his successor Mir Qasim were not as cooperative as the Company desired. They had to maintain some semblance of dignity to command respect from their subjects.

The Company Takes Control

• When Mir Jafar resisted the Company’s demands, he was deposed, and Mir Qasim was installed as Nawab.
• When Mir Qasim protested, he was defeated at the Battle of Buxar in 1764, and Mir Jafar was reinstalled as Nawab.
• Mir Jafar had to pay the Company Rs. 500,000 monthly, but the Company’s expenses were high due to wars and trade demands, so they sought more revenue and territory.
• By the time Mir Jafar died in 1765, the Company’s attitude had changed. Robert Clive declared that the Company must become the nawabs themselves.
• In 1765, the Mughal emperor appointed the East India Company as the Diwan of Bengal, giving it control over the province’s vast revenue resources.

Impact of Diwani

• The Diwani allowed the Company to use Bengal’s revenues to fund its expenses.
• This solved the problem of the Company’s earlier need to import gold and silver from Britain to buy goods in India.
• After the Battle of Plassey and the assumption of Diwani, the outflow of gold from Britain slowed and eventually stopped.
• The revenues from Bengal were now used to purchase cotton and silk textiles, maintain Company troops, and build forts and offices in Calcutta.

Also Check – The Battle of Plassey – Detailed Notes with Flowchart

Company Officials Become “Nabobs” (Nawabs)

The Power of Being a Nawab

• After the Battle of Plassey, the Company gained significant power and authority.
• This power extended not just to the Company but also to its individual servants, who began aspiring to live like nawabs, amassing wealth and living luxuriously.

The Nawab’s Complaints

• In 1733, the Nawab of Bengal expressed concern about the growing influence and power of the English traders.
• Initially, the English traders had humbly requested land to build a factory. However, they soon built a strong fort with heavy fortifications and artillery.
• The Nawab accused the English of attracting merchants under their protection, collecting large revenues, and engaging in acts of robbery and slavery.

Wealth and Corruption Among Company Officials

• After the Battle of Plassey, the actual Nawabs of Bengal were forced to give vast lands and money as personal gifts to Company officials.
• Robert Clive, a prominent Company official, amassed a significant fortune during his time in India.
• Clive’s wealth was scrutinized by the British Parliament in 1772, although he was acquitted. Despite this, he committed suicide in 1774.
• Not all Company officials were as successful as Clive; many died early due to disease and war.
• Those who managed to return to Britain with wealth lived ostentatious lives and were called “nabobs,” a term that mocked their social climbing.

Expansion of Company Rule

• From 1757 to 1857, the East India Company expanded its control over Indian states using various strategies.
• The Company rarely launched direct military attacks. Instead, it used political, economic, and diplomatic methods to increase its influence before annexing territories.
• After the Battle of Buxar (1764), the Company appointed Residents in Indian states. These Residents acted as political or commercial agents, furthering the Company’s interests.
• Company officials began interfering in the internal affairs of Indian states, including decisions on succession and administrative appointments.

Subsidiary Alliances

• The Company often forced Indian rulers into “subsidiary alliances,” which restricted them from maintaining independent armed forces.
• The Company promised protection but required the rulers to pay for the subsidiary forces.
• If the rulers failed to pay, they were forced to cede part of their territories as a penalty.
• For instance, when Richard Wellesley was Governor-General (1798–1805), the Nawab of Awadh had to give up more than half of his territory in 1801 due to non-payment.
• Hyderabad also lost territories under similar conditions.

Role of the Resident

• The Residents, although officially non-interfering, held significant power and often acted as the de facto rulers of the states.
• James Mill, a Scottish economist and philosopher, noted that while the Residents acted under instructions not to interfere, they effectively controlled the states as long as the local rulers remained submissive.

Tipu Sultan – The “Tiger of Mysore”

Mysore’s Growing Power

• The southern Indian state of Mysore became powerful under the leadership of Haidar Ali (ruled from 1761 to 1782) and his son, Tipu Sultan (ruled from 1782 to 1799).
• Mysore controlled the lucrative trade on the Malabar coast, where the East India Company purchased goods like pepper and cardamom.

Tipu Sultan’s Defiance

• In 1785, Tipu Sultan stopped the export of sandalwood, pepper, and cardamom through the ports of Mysore.
• He also prohibited local merchants from trading with the East India Company.
• Tipu Sultan established a strong relationship with the French in India and modernised his army with their assistance.

British Reaction

• The British were alarmed by the strength and ambitions of Haidar Ali and Tipu Sultan.
• They viewed them as dangerous and sought to control or eliminate their power.

Wars with Mysore

• The Company fought four wars with Mysore: in 1767–69, 1780–84, 1790–92, and 1799.
• Tipu Sultan successfully defended Mysore in several battles, but the Company, with the help of the Marathas and the Nizam of Hyderabad, ultimately gained the upper hand.
• In the final war, the Battle of Shrirangapatnam in 1799, Tipu Sultan was killed while defending his capital.
• After Tipu’s death, Mysore was placed under the control of the former ruling dynasty, the Wodeyars, and a subsidiary alliance was imposed on the state.

Tipu’s Legacy

• Tipu Sultan became a legendary figure, often referred to as the “Tiger of Mysore.”
• A famous story tells of how Tipu, while hunting, fought a tiger with his bare hands after his gun failed and his dagger fell. This encounter earned him his famous nickname.
• Tipu Sultan’s image of the tiger was prominently displayed on his flag.

British Propaganda and Symbolism

• British painters often depicted scenes of their victories over Indian rulers. For example, Tipu Sultan’s sons were taken as hostages by the British after one of the wars, a scene famously depicted in British art.
• The British also took away Tipu’s toy tiger, a mechanical figure showing a tiger mauling a European soldier, which is now displayed in the Victoria and Albert Museum in London.

Also Check – Tipu Sultan – The “Tiger of Mysore”

War with the Marathas

Maratha Power in the Eighteenth Century

• In the late eighteenth century, the East India Company aimed to curb and eventually destroy the power of the Marathas.
• The Marathas’ ambitions of ruling from Delhi were crushed after their defeat in the Third Battle of Panipat in 1761.
• After this defeat, the Marathas were divided into several states, each ruled by different chiefs (sardars) from dynasties like Sindhia, Holkar, Gaikwad, and Bhonsle.
• These chiefs were part of a confederacy led by the Peshwa (Principal Minister), who was the military and administrative head based in Pune.
• Notable Maratha leaders of this time included Mahadji Sindhia and Nana Phadnis.

Series of Wars Against the Marathas

• The East India Company engaged the Marathas in a series of wars to diminish their power.

First Anglo-Maratha War (1775–1782)

• The First Anglo-Maratha War ended in 1782 with the Treaty of Salbai.
• The war did not result in a clear victory for either side, leaving the power struggle unresolved.

Second Anglo-Maratha War (1803–1805)

• The Second Anglo-Maratha War was fought on multiple fronts.
• The British emerged victorious, gaining control of Orissa and territories north of the Yamuna River, including Agra and Delhi.

Third Anglo-Maratha War (1817–1819)

• The Third Anglo-Maratha War marked the end of Maratha power.
• The Peshwa was removed from power and exiled to Bithur in Kanpur, where he was given a pension.
• With this victory, the East India Company secured complete control over the territories south of the Vindhyas.

Also Check – The Anglo-Maratha Wars – Detailed Notes with Flow Chart

The Claim to Paramountcy

Aggressive Territorial Expansion

• From the early 19th century, the East India Company aggressively expanded its territories.
• Under Lord Hastings, who served as Governor-General from 1813 to 1823, a new policy called “paramountcy” was introduced.
• According to this policy, the Company claimed that its authority was supreme, greater than that of any Indian state.
• This doctrine justified the annexation or threat of annexation of Indian kingdoms to protect British interests.

Resistance to British Paramountcy

• The policy of paramountcy was met with resistance from various Indian rulers and states.
• For example, when the British tried to annex the small state of Kitoor (located in present-day Karnataka), Rani Channamma led an armed resistance against the British.
• Rani Channamma was arrested in 1824 and died in prison in 1829.
• Rayanna, a poor chowkidar from Sangoli in Kitoor, continued the resistance with popular support.
• Rayanna destroyed several British camps and records before being captured and hanged by the British in 1830.

Expansion in the North-West

• In the late 1830s, the East India Company became concerned about the possibility of Russian expansion into India from the north-west.
• Driven by this fear, the British sought to secure their control over the north-western regions.
• They fought a prolonged war with Afghanistan between 1838 and 1842, establishing indirect Company rule there.
• In 1843, Sind was annexed by the British.
• Punjab was the next target, but the presence of Maharaja Ranjit Singh delayed the British plans.
• After Maharaja Ranjit Singh’s death in 1839, the Company fought two prolonged wars with the Sikh kingdom.
• Finally, in 1849, Punjab was annexed by the British.

The Doctrine of Lapse

Introduction of the Doctrine

• The final phase of British annexations in India occurred under Lord Dalhousie, who was the Governor-General from 1848 to 1856.
• Dalhousie introduced a policy known as the “Doctrine of Lapse.”
• According to this doctrine, if an Indian ruler died without a male heir, his kingdom would “lapse” or automatically become part of Company territory.

Application of the Doctrine

• Using the Doctrine of Lapse, the British annexed several kingdoms:
  • Satara in 1848
  • Sambalpur in 1850
  • Udaipur in 1852
  • Nagpur in 1853
  • Jhansi in 1854
• This policy allowed the Company to expand its control over large parts of India without direct military confrontation.

Annexation of Awadh

• In 1856, the British also annexed the kingdom of Awadh.
• This time, they used the justification of “duty,” claiming they were obliged to take over Awadh to free its people from the “misgovernment” of the Nawab.
• The manner in which the Nawab was deposed was humiliating, and it angered the people of Awadh.
• This resentment contributed to the widespread discontent that fueled the great revolt of 1857.

Setting up a New Administration

Role of Warren Hastings

• Warren Hastings served as the first Governor-General from 1773 to 1785.
• He played a crucial role in expanding the power of the East India Company.
• By his time, the Company had established control over Bengal, Bombay, and Madras.

Administrative Divisions

• British territories in India were divided into three major administrative units called Presidencies: Bengal, Madras, and Bombay.
• Each Presidency was governed by a Governor, but the supreme head of the administration was the Governor-General.
• Warren Hastings was the first to hold the position of Governor-General.

Judicial Reforms

• In 1772, Warren Hastings introduced significant reforms in the judicial system.
• A new system of justice was established, with each district having two courts:
  • A criminal court (faujdari adalat)
  • A civil court (diwani adalat)
• Indian laws were interpreted by Maulvis and Hindu pandits for European district collectors who presided over the civil courts.
• Criminal courts remained under the supervision of a qazi and a mufti, but they were overseen by the collectors.

Challenges in Law Interpretation

• A major issue arose due to the different interpretations of local laws by Brahman pandits based on various schools of the dharmashastra.
• To create uniformity, in 1775, eleven pandits were asked to compile a digest of Hindu laws, which was translated into English by N.B. Halhed.
• By 1778, a code of Muslim laws was also compiled for European judges.

Establishment of the Supreme Court

• The Regulating Act of 1773 led to the creation of a new Supreme Court in Calcutta.
• Additionally, a court of appeal, known as the Sadar Nizamat Adalat, was set up in Calcutta.

Role of the Collector

• The principal figure in each Indian district was the Collector.
• The Collector’s primary responsibilities included collecting revenue and taxes, and maintaining law and order with the assistance of judges, police officers, and darogas.
• The office of the Collector, known as the Collectorate, became the new centre of power, gradually replacing previous authorities.

Impeachment of Warren Hastings

• When Warren Hastings returned to England in 1785, he was accused by Edmund Burke of being responsible for the misgovernment of Bengal.
• This accusation led to an impeachment trial in the British Parliament that lasted seven years, though Hastings was eventually acquitted.

The Company Army

Colonial Rule and Military Power

• British colonial rule in India brought new ideas of administration and reform, but its power relied heavily on military strength.

Mughal Army Structure

• The Mughal army mainly consisted of cavalry (sawars) and infantry (paidal soldiers).
• Cavalry, composed of trained soldiers on horseback, dominated the army.
• The infantry, consisting of foot soldiers, was less emphasized.
• Soldiers were trained in archery (teer-andazi) and swordsmanship.
• The Mughals did not maintain a large, professionally trained infantry, as rural areas provided a large number of armed peasants and local zamindars supplied paidal soldiers.

Changes in Military Recruitment

• In the 18th century, Mughal successor states like Awadh and Banaras began recruiting peasants as professional soldiers.
• The East India Company adopted this method for its own army, which became known as the sepoy army (from the Indian word “sipahi,” meaning soldier).

Shift in Military Technology

• In the 1820s, as warfare technology advanced, the Company’s need for cavalry decreased.
• The British Empire was engaged in wars in Burma, Afghanistan, and Egypt, where soldiers were armed with muskets and matchlocks.
• This shift made the infantry regiments more important within the Company’s army.

European-style Military Culture

• In the early 19th century, the British introduced a uniform military culture in their army.
• Soldiers underwent European-style training, drill, and discipline, which regulated their lives more strictly than before.
• This new military culture often clashed with the soldiers’ caste and community identities, raising questions about whether individuals could easily abandon their traditional beliefs and see themselves solely as soldiers.

Impact on Sepoys

• The changes in the lives of the sepoys, including their identity and sense of belonging, were significant.
• The Revolt of 1857 offers insights into the sepoys’ reactions to these changes, which will be discussed in detail in a later chapter.

Conclusion

• The East India Company transformed from a trading company into a territorial colonial power.
• The arrival of steam technology in the early 19th century facilitated this process, reducing travel time from England to India from six to eight months to just three weeks.
• By 1857, the Company exercised direct rule over about 63% of the territory and 78% of the population of the Indian subcontinent.
• With its indirect influence over the remaining areas, the East India Company had nearly complete control over India.