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From Trade to Territory: The East India Company & Expansion of Company Rule

Last updated date: 28th Feb 2024
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The Beginning of from Trade to Territory

The Mughal Empire ruled from the early 16th century to half of the 19th century on most of the Indian Territory. When the powerful Mughal Emperor, Aurangazeb died, his Mughal generals and subheaders started fighting for the throne and their power. From trade to territory the company established power in India in the 18th century and they were establishing their power in the country. Governing power of the country was taken by the powerful Britishers after the fall of the Mughal Empire

When Britishers came to India they came with the purpose of trade but they became powerful and ruled on our land for a long period of time. In this article, we will learn about the series of events that gave the governance power of our country to the British and it is beneficial for the students in form of from trade to territory NCERT solutions.

The East India Company Comes to India

In the year 1600, the royal charter granted by the ruler of England, Queen Elizabeth I gave the right to the Britishers to trade with India. The Charter gave permission to the East India Company. The East India Company used to buy Indians good bought goods at very cheap prices and then in Europe they sold them at a high price. At that time, silk and cotton produced in our country had a big market in Europe. Indian spices such as cinnamon, pepper, cardamom and cloves were in great demand.

Trade-in Bengal

The first English factory was established in the year 1651 on the banks of river Hugli. In 1717 Mughal king of that time Farruk Siyar granted a “farman” to the English company the gave them the right to trade free duty. But the Company was not satisfied with only trade free duty. It tried to create pressure for more concessions and manipulate the existing privileges. These unfair practices of trade gradually led the company to battles.

Trade Leading to Battles 

The conflict between the Nawab and the company increased. Later the Nawab refused to give any concessions, the right of mint coins and demanded tributes for the right to trade to the company concessions. The nawab also claimed that the company was undermining the authority of the nawab and denying revenue. After the battle of Plassey, these conflicts culminated. The two famous battles that were fought between the Indian Nawabs and the company are as follows.

  • The Battle of Plassey

This Battle took place in 1757. Siraj-ud-daulah became the Nawab of Bengal.  Robert Clive led the army of the Company against the Nawab of Bengal at Plassey. The British won the battle. Mir Jafar and his army did not participate in the battle because Clive promised that after the death of Siraj-ud-daulah he would give the title of Nawab to Mir Jafar which became a major reason for the defeat of the Siraj-Ud-Daulah.

  • The Battle of Buxar

Mir Jafar was made the Nawab of Bengal by the Britishers after the battle of Plassey. He worked as a puppet whose threads were in the hands of the British. The battle of Buxar was fought between the British and Mir Qasim in 1764. The East India Company started dealing with the matter of Diwani of Bengal and its provinces after the death of the Mir Jafar. Robert Clive became the Governor of Bengal in 1765.

Expansion of Company Rule 

The East India Company started directly attack through its military power on Indian territories by applying means of different political, economic and diplomatic methods. The company appointed many political or commercial agents as residents in states of India who work for the interests of the company. Indian Kings lose the right of having their own armed forces and their forces would be protected by the company as the company established a subsidiary alliance. 

Tipu Sultan: Tiger of Mysore

Mysore gained power under the leadership and guidance of Tipu Sultan (Tiger of Mysore) and Haider Ali. The Company purchased pepper and cardamom by controlling the trade-in Malabar coast. Tipu Sultan refused to have any trade of pepper, cardamom and sandalwood in 1785, the company fought four wars with Mysore and in the last battle of Seringapatam achieved victory.

Claim to Paramountcy and Doctrine of Lapse

A new policy called paramountcy was initiated under Lord Hasting leadership because of that the company gained immense power. Lord Dalhousie established the doctrine of Lapse in India, according to that if an Indian king or ruler died without any male heir his kingdom would be declared “lapse” and it will eventually become part of Company territory. The company expanded and gained power in Bengal under the guidance of Warren Hastings.

Do You Know?

  • The silk, cotton, pepper, cloves, cardamom and cinnamon were high in demand in Europe. The British, Dutch, French and Portuguese were interested in trade with India which led to fierce battles between the trading companies.

  • The East India Company gained control in India on 63% of the territory and 78% of the population of Indians by 1857. 


Hence we observed the series of events that were responsible for the transformation of the East India Company from a trading company to territorial colonial power. The above article is helpful for the students in form of from trade to territory NCERT solutions. After going through the whole article students would be able to solve extra questions from trade to territory.

FAQs on From Trade to Territory: The East India Company & Expansion of Company Rule

1. What attracted European trading companies to India?

European trading companies were searching for new land in order to do their trades. Hence they came to India in search of new lands. They have a major profit in India that they could buy goods at a cheap price and then in Europe they could sell at higher prices. The good quality goods such as cotton and silk produced in India had great demand and value in Europe. Indian spices such as cloves, pepper, cardamom, and cinnamon were also in great demand and their selling price was a very high price. 

2. What were the benefits the East India Company gained through the right of Diwani?

Diwani rights are the rights given by the governing authority to collect revenues. The British gained Diwani rights. Hence they get the right to deal with the matter of civil cases and collocation of revenues. This right of Diwani was very fruitful for the East India Company in many ways as it permitted the British the use of resources of revenue of Bengal. the monopoly of the East India Company on the trade commenced and the revenue of Bengal helped export Indian goods out of the country.

3. Who introduced the policy of ‘paramountcy’?

The policy of paramountcy was introduced by Lord Rawdon Hastings. The post of the Governor-General of India was given to him from 1813 to 1823. The main motive of this policy was to provide immense power to the company. With the help of this policy, the company became the supreme law, the paramount power and gained the right to protect its interest. For the protection of its interest, the company could annex or threaten any Indian kingdom. The British policies that were introduced later were guided by this policy.