The decay of the Mughal Empire was bad for business, and as parts of the interior descended into civil war and chaos, the trading companies dotted around India became concerned for their profits. At the same time, rapid advances in Western military tactics and technology began to offer even small detachments of European soldiers decisive advantages over local troops.
In part one I thus described the initial expansion of the East India Company in India until Warren Hastings the head of the Supreme Council of Bengal was put on trial.
From the time of Akbar the Great’s death in1605 on the Moghul Empire would gradually fall apart only to be re-integrated later by the British East India Company-during the 18th Century.
It all started when Bombay, a Portuguese Colony, became British in 1661 when it passed to Charles II as part of the dowry of Catherine of Braganza. Finding the cost of maintaining the place prohibitive, the Monarch leased it to the East India Company in 1668. There was a Persian invasion in the 1740s, and what the centrifugal tendencies of the empire concerned power was divided between the nawabs (Moghul provincial governors) and the Marathas who owed allegiance to a potentate known as the Peshwa of Poona. And originally appearing as a Hindu sect, the Sikhs in the sixteenth century formed a militia, hood, had no castes, and turned against the Moghuls forming the third power. By the 1750s, when the final disintegration of the Mughal state began, both the English and the French East India companies had transformed themselves into minor powers along the coast. At the end of the century, a momentous acquisition was made when the company was allowed to occupy Fort William, which it had built at Calcutta.
In "One body corporate and politic": 2005, Philip Jared Stern described the East India Company in the later seventeenth century as “a State in the disguise of a Merchant” replicating the remarks of Adam Smith and Edmund Burke
Thus while we still talk about the British conquering India, that phrase disguises a more sinister reality. It was not the British government that seized India at the end of the 18th century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India.
Of initial importance was the Treaty of Allahabad that was signed on 12 August 1765, between the Mughal Emperor Shah Alam II, son of the late Emperor Alamgir II, and Robert Clive.
The Treaty marks the political and constitutional involvement and the beginning of British rule in India. Based on the terms of the agreement, Alam granted the East India Company Diwani rights, or the right to collect taxes on behalf of the Emperor from the eastern province of Bengal-Bihar-Orissa. Thus East India Company were appointed as the imperial tax collector for the Eastern province (Bengal-Bihar-Orissa). These rights allowed the Company to collect revenue directly from the people of Bengal, Bihar, and Orissa. In return, the Company agreed to pay Rupees 26lakhs every year to the Mughal Emperor but they stopped making this payment soon after. The company promised to send its troops to defend the Nawab against any invaders, for which the Nawab would be required to pay. Thus, the Nawab of Awadh became dependent on the company.
Underneath painting of Shah Alam reviewing the troops of the East India Company at Allahabad.
But the assumption that India went from the Mughals to the British is an oversimplification for it was the Maratha empire that governed much of the land and the Mughal emperor had been reduced to a mere figurehead. In fact, hardly any battle was fought between the British and the Mughals, save the battle for Buxar in 1765. It was the Marathas that the East India Company fought whereby none was more important than the Battle of Delhi.
The Battle of Delhi and the future fate of India
The battle was fought between British troops under General Gerard Lake, and the Marathas of Daulat Rao Scindia’s Army under French General Louis Bourquin and Wable Sardar.
Scindia’s Marathas were pretending to fight on behalf of Mughal Emperor Shah Alam II. It was a decisive battle between the two mighty armies, with the British becoming the custodian of the Mughal Empire.
Terrible as it was, the Battle of Delhi was the last time British troops faced French officers in South Asia, ending more than a century of rivalry which had caused so much bloodshed, mostly of non-Europeans, across the subcontinent. It also brought to a close Hindustan’s unhappy century of being fought over, and plundered, by rival armies.
Most importantly, the Battle of Delhi decided the future fate of India. The Marathas were the last indigenous Indian power that was militarily capable of defeating the Company and driving it out of South Asia. There were other battles still to be fought against both Scindia and Holkar before they surrendered, but after Assaye and Delhi, the outcome of the war was quite clear. The last power who could have ousted the Company had been humbled and was about to be conquered.
Company Bengal, Madras, and Bombay were now linked up as a continuous unit, joined with the Deccan and much of Hindustan, so consolidating a land empire that controlled over half a million square miles of territory and which, fifty years later, would become the British Raj.1 Before long, the Company would conclude treaties with all the Rajput states that had been fiefs of Scindia: Jodhpur, Jaipur, Macheri, Bundi and the Jat Raja of Bharatpur. All the major regimes of peninsular India had now either been annexed or become allies of the Company through a process of conquest, collaboration, and co-option. As Arthur Wellesley told his delighted brother: Your policy and our power have reduced all the powers in India to the state of mere ciphers.2
Around 600 well-trained Company civil servants, guarded by 155,000 Indian sepoys, were to administer most of peninsular India.3 Here the Company’s army was now unequivocally the dominant military force and the Governor-General who controlled it the real Emperor. Not only had Arthur Wellesley gained many more subjects than Britain had lost a decade earlier in North America, around 50 million, he had also created a cadre of young men committed to his imperial project, and who would carry it forward after he had gone.4 Wellesley’s ambitious protégés were working for the establishment and spread of an Anglicised colonial state that would provide an efficiently regimented but increasingly remote and alien administrative infrastructure for this new empire. As one of them, the young Company diplomat Charles Metcalfe, wrote, ‘Sovereigns you are, and as such must act.5
In London, there was surprisingly little awareness as yet of what had been achieved. The country was still obsessed with the struggle with Napoleon, and despite the swathe of territories Lord Wellesley had conquered, there was little interest in what had taken place in India outside those organizations or people directly concerned with it. Even Wellesley’s ultimate boss, the Foreign Secretary, Lord Grenville, declared himself "totally unacquainted with every part of this subject" when Wellesley’s aggressively expansionist Indian policy was briefly discussed in a half-empty House of Lords.6
But within India, everyone knew that a major revolution had just taken place. Many Muslims, led by the puritanical Delhi imam Shah Abdul Aziz, saw this as the moment that India had slipped out of their hands for the first time since the twelfth century: "From here to Calcutta, the Christians are in complete control," wrote Shah Abdul Aziz in an 1803 fatwa of jihad. "India is no longer Dar ul-Islam." 7 Company officials realized it with equal clarity: We are now complete masters of India, wrote Thomas Munro, and nothing can shake our power if we take proper measures to confirm it.8
The sinews of British supremacy were now established. With the exception of a few months during the Great Uprising of 1857, for better or worse, India would remain in British hands for another 144 years, finally gaining its freedom only in August 1947.
For the Company, too, this was a historic occasion, the final denouement of its long struggle to defeat the Marathas and seize from them control of the erstwhile Mughal Empire. At the same time, it also represented the final act in the gradual penetration by the Company of the Mughal system, in which a joint-stock company from the City of London slowly appropriated the power of the mighty Mughal Empire, and to some extent, under Wellesley, also took on the trappings of Mughal grandeur.
In the end, the Company established its paramountcy by imposing itself on the Mughal Emperor as Regent, so finding a measure of legitimacy for itself in the eyes of India under the Mughal umbrella. As late as 1831, the Bengali reformer Raja Rammohan Roy dwelt "on the greater stability to the power of the British government attained by securing the grateful friendship of a monarch, who though without territorial possession, was still regarded by the nations of Hindustan as the only legitimate foundation of either honor or dominion."9 The Company understood the importance of infiltrating the Mughal system rather than simply blowing it apart or abolishing it.
Wellesley would protest to the directors that he "recoiled from the thought of it being suspected in England" that he wished to "place the East India Company, substantially or vicariously, on the throne of the Mughals." 10 But this, of course, was exactly what he had done. In less than fifty years, a multinational corporation had seized control of almost all of what had once been Mughal India. It had also, by this stage, created a sophisticated administration and civil service, built much of London’s docklands and come close to generating half of Britain’s trade. It's annual spending within Britain alone equaled about a quarter of the total British government annual expenditure.11 No wonder the Company now referred to itself as ‘the grandest society of merchants in the Universe’. Its armies were larger than those of almost all nation-states and its power now encircled the globe; indeed, its shares were by now a kind of global reserve currency. As Burke wrote: The Constitution of the Company began in commerce and ended in Empire; or rather, as one of its directors admitted, ‘an empire within an empire.12
Nevertheless, for all its vast resources, to finance his six years of incessant warfare Wellesley had come close to bankrupting the Company, hugely increasing its annual deficits to around £ 2 million a year. The Company’s overall debt, which had stood at £ 17 million when Wellesley first arrived in India, was now rising towards £ 31.5 million (£ 3.3 billion in today’s currency). Between 1800 and 1806, £ 3.9 million of silver had to be shipped from London to Bengal to help begin repaying the enormous debts that Wellesley had run-up. 13 The news of the cost of the palatial new Government House in Calcutta, which Lord Wellesley had begun to build on a truly Mughal scale, was the final straw for the directors. Under Wellesley, the Government of India, they declared, had ‘simply been turned into a despotism’.
On 6 November 1803, the Court of Directors wrote to the government’s Board of Control listing their objections to Wellesley. They accused him of making various inroads upon the constitution established for the governance of British India, and when they so far expressed their feelings in the hope of his effecting great promised retrenchments in the public expenditure … instead of answering their views he embarked, unnecessarily as they think, those extensive plans of foreign policy inevitably leading to wars which … have, in the opinion of the Court, been productive of many serious evils, have removed further than ever the prospect of reducing the debt and expenses of the country, and have exchanged the secure state and respected character of British power for an uncertain supremacy, and it is to be feared, the disaffection of all the states in India.14
By the end of 1803, the final decision had been taken: Wellesley, the Empire-building government cuckoo in the Company’s corporate nest, was to be recalled.
An anonymous writer in the Edinburgh Review, probably James Mill, put it well a few months after Wellesley’s recall: "Among all the visionary Dextravagant systems of policy that have been suggested," he wrote, "no one has been absurd enough to maintain that the most advisable way to govern an empire was by committing it to the care of a body of merchants residing at a distance of many thousands of miles."15 In 1813, Parliament abolished the Company’s monopoly of trade with the East, allowing other, merchants and agency houses to set up shop in Bombay and Calcutta.16
By 1825 there was growing opposition in Parliament to the continuing existence of the East India Company at all. One MP remarked that the power and influence of the Company were so great that were it not, indeed, that the locality of its wealth is at so remote a distance, the very existence of such a body would be dangerous, not merely to the liberty of the subject, but to the stability of the state. Five years later another MP raged against politicians allowing a gigantic power to exist in opposition to the welfare of the kingdom, and over which Parliament has a most feeble and indirect control. 17 In Parliament, James Silk Buckingham went even further: The idea of consigning over to a joint-stock association … the political administration of an Empire peopled with 100 million souls were so preposterous that if it were now for the first time to be proposed it would be deemed not merely an absurdity, but an insult to the meanest understanding of the realm.18
In 1833, Parliament finally took action. They passed the East India Company Charter Bill, which removed the East India Company’s right to trade and so turned it into a sort of governing corporation. The Company, which had once presided over a vast empire of business, and which even at this stage was annually making £ 1 million from the tea trade alone, entered its final phase devoted exclusively to the business of Empire.19
Finally, on 10 May 1857, the East India Company’s private army rose up in revolt against its employer. On crushing the rebellion, after nine uncertain months, the Company distinguished itself for a final time by hanging and murdering many tens of thousands of suspected rebels in the bazaar towns that lined the Ganges, probably the bloodiest episode in the entire history of British colonialism.
The mutiny broke out in the Bengal army because it was only in the military sphere that Indians were organized. The pretext for the revolt was the introduction of the new Enfield rifle. To load it, the sepoys had to bite off the ends of lubricated cartridges. A rumor spread among the sepoys that the grease used to lubricate the cartridges was a mixture of pigs’ and cows’ lard; thus, to have oral contact with it was an insult to both Muslims and Hindus. There is no conclusive evidence that either of these materials was actually used on any of the cartridges in question. However, the perception that the cartridges were tainted added to the larger suspicion that the British were trying to undermine Indian traditional society. For their part, the British did not pay enough attention to the growing level of sepoy discontent.*
In the aftermath of the Indian Mutiny, as it is known in Britain or the First War of Independence as it is called in India, Parliament finally removed the Company from power altogether. Enough was enough. The Victorian state, alerted to the dangers posed by corporate greed and incompetence, successfully tamed history’s most voracious corporation. The Company’s navy was disbanded and its army passed to the Crown. In 1859, it was within the walls of Allahabad Fort, the same space where Robert Clive had first turned the Company into an imperial power by signing the Diwani, that the Governor-General, Lord Canning, formally announced that the Company’s Indian possessions would be nationalized and pass into the control of the British Crown. Queen Victoria, rather than the directors of the East India Company, would henceforth be the ruler of India.
The Company limped on in its amputated form for another fifteen years when its charter expired, finally quietly shutting down in 1874.
*As an indication as to how the mutiny still at times reappears in the spotlight in 2005 the Delhi High Court issued notices to Bollywood actors Aamir Khan and Rani Mukherjee and others linked with Hindi film "Mangal Pandey - The Rising" on a suit by the kin of the pre-independence hero. Also, the Bhartiya Janata Party led by the current Prime Minister Narendra Modi demanded a ban on the film.
1. H. V. Bowen, The Business of Empire: The East India Company and Imperial Britain, 1756-1833, 2008, p. 5.
2. Jon Wilson, India Conquered: Britain's Raj and the Chaos of Empire, 2017, p. 176.
3. Ibid., pp. 122, 187. Lord Wellesley opened Fort William College to train a new generation of covenanted civil servants in July 1800.
4. Bowen, Business of Empire, p. 5.
5. Penderel Moon, The British Conquest and Dominion of India,1989, pp. 328, 343.
6. Iris Butler, The Elder Brother: The Marquess Wellesley 1760– 1842, 1973, p. 333.
7. Rajat Kanta Ray, The Felt Community: Commonality and Mentality before the Emergence of Indian Nationalism, New Delhi, 2003, p. 327; Ray, ‘Indian Society and the Establishment of British Supremacy, 1765– 1818’, in P. J. Marshall , The Eighteenth Century in Indian History: Revolution or Evolution?, 2005, p. 526.
8. Moon, The British Conquest and Dominion of India,
9. Rajat Kanta Ray, The Felt Community: Commonality and Mentality before the Emergence of Indian Nationalism, 2003, pp. 301– 3, 334.
10. Quoted in J. K. Majumdar, Raja Rammohun Roy and the Last Moghuls: A Selection from Official Records (1803– 1859), Calcutta, 1939, pp. 4, 319– 20.
11. H. V. Bowen, The Business of Empire: The East India Company and Imperial Britain, 1756–1833, 2008, p. 277.
12. See Joseph Sramek, Gender, Morality, and Race in Company India, 1765– 1858, New York, 2011, p. 17.
13. Ibid., p. 229.
14. P. J. Marshall, Problems of Empire: Britain and India, 1757– 1813, London, 1968, pp. 142– 4.
15. Quoted in Tillman W. Nechtman, Nabobs: Empire and Identity in Eighteenth-Century Britain, Cambridge, 2010, p. 225.
16. Micklethwait and Wooldridge, The Company, p. 36.
17. Bowen, Business of Empire, pp. 16– 17.
18. Ibid., p. 297.
19. Tirthankar Roy, The East India Company: The World’s Most Powerful Corporation, New Delhi, 2012, p. xxiii.