East India Company

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East India Company (EIC)
Naval Ensign of the Bombay Marine 1801 to 1830.png
Active1600-1874
CountryFlag United Kingdom of Great Britain and Northern Ireland.gif United Kingdom
AllegianceBritish Empire
Garrison/HQBombay Dockyard, Bombay, India

The East India Company (EIC), or the British East India Company, The company was chartered in 1600 by the English government to trade in the East Indies: It developed trade with India until the Indian Mutiny (1857), when the Crown took over the administration: the company was dissolved in 1874.

History

It was formed to trade in the Indian Ocean region, initially with Mughal India and the East Indies, and later with Qing China. The company ended up seizing control of large parts of the Indian subcontinent, colonised parts of Southeast Asia, and colonised Hong Kong after the First Opium War.

Originally chartered as the "Governor and Company of Merchants of London Trading into the East-Indies", the company rose to account for half of the world's trade, particularly in basic commodities including cotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium. The company also ruled the beginnings of the British Empire in India. In his speech to the House of Commons in July 1833, Lord Macaulay explained that since the beginning, the East India Company had always been involved in both trade and politics, just as its French and Dutch counterparts had been.

The company received a Royal Charter from Queen Elizabeth I on 31 December 1600, coming relatively late to trade in the Indies. Before them the Portuguese Estado da Índia had traded there for much of the 16th century and the first of half a dozen Dutch Companies sailed to trade there from 1595. These Dutch companies amalgamated in March 1602 into the Dutch East India Company (VOC), which introduced the first permanent joint stock from 1612 (meaning investment into shares did not need to be returned, but could be traded on a stock exchange). By contrast, wealthy merchants and aristocrats owned the EIC's shares.Initially the government owned no shares and had only indirect control until 1657 when permanent joint stock was established.

During its first century of operation, the focus of the company was trade, not the building of an empire in India. Company interests turned from trade to territory during the 18th century as the Mughal Empire declined in power and the East India Company struggled with its French counterpart, the French East India Company (Compagnie française des Indes orientales) during the Carnatic Wars of the 1740s and 1750s. The battles of Plassey and Buxar, in which the British defeated the Bengali powers, left the company in control of Bengal with the right to collect revenue, in Bengal and Bihar,[12] and a major military and political power in India. In the following decades it gradually increased the extent of the territories under its control, controlling the majority of the Indian subcontinent either directly or indirectly via local puppet rulers under the threat of force by its Presidency armies, much of which were composed of native Indian sepoys.

By 1803, at the height of its rule in India, the British East India company had it's own private navy the Bombay Marine and a private army of about 260,000 twice the size of the British Army, with Indian revenues of £13,464,561 (equivalent to £229.9 million in 2019) and expenses of £14,017,473 (equivalent to £239.3 million in 2019). The company eventually came to rule large areas of India with its private armies, exercising military power and seizing administrative functions.[15] Company rule in India effectively began in 1757 and lasted until 1858, when, following the Indian Rebellion of 1857, the Government of India Act 1858 led to the British Crown's assuming direct control of the Indian subcontinent in the form of the new British Raj.

The official government machinery of British India assumed the East India Company's governmental functions and absorbed its navy and its armies in 1858. Despite frequent government intervention, the company had recurring problems with its finances. It was dissolved in 1874 as a result of the East India Stock Dividend Redemption Act passed one year earlier, as the Government of India Act had by then rendered it vestigial, powerless, and obsolete.