The East India Company

Document 1

The East India Company had the unusual distinction of ruling an entire country. Its origins were much humbler. On 31 December 1600, a group of merchants who had incorporated themselves into the East India Company were given monopoly privileges on all trade with the East Indies. The Company’s ships first arrived in India, at the port of Surat, in 1608. Sir Thomas Roe reached the court of the Mughal Emperor, Jahangir, as the emissary of King James I in 1615, and gained for the British the right to establish a factory at Surat. Gradually the British eclipsed the Portugese and over the years they saw a massive expansion of their trading operations in India. Numerous trading posts were established along the east and west coasts of India, and considerable English communities developed around the three presidency towns of Calcutta, Bombay, and Madras. In 1717, the Company achieved its hitherto most notable success when it received a firman or royal dictat from the Mughal Emperor exempting the Company from the payment of custom duties in Bengal.

The Company saw the rise of its fortunes, and its transformation from a trading venture to a ruling enterprise, when one of its military officials, Robert Clive, defeated the forces of the Nawab of Bengal, Siraj-ud-daulah , at the Battle of Plassey in 1757. A few years later the Company acquired the right to collect revenues on behalf of the Mughal Emperor, but the initial years of its administration were calamitous for the people of Bengal. The Company’s servants were largely a rapacious and self-aggrandizing lot, and the plunder of Bengal left the formerly rich province in a state of utter destitution. The famine of 1769-70, which the Company’s policies did nothing to alleviate, may have taken the lives of as many as a third of the population. The Company, despite the increase in trade and the revenues coming in from other sources, found itself burdened with massive military expenditures, and its destruction seemed imminent. State intervention put the ailing Company back on its feet, and Lord North’s India Bill, also known as the Regulating Act of 1773, provided for greater parliamentary control over the affairs of the Company, besides placing India under the rule of a Governor-General.

The first Governor-General of India was Warren Hastings. Under his dispensation, the expansion of British rule in India was pursued vigorously, and the British sought to master indigenous systems of knowledge. Hastings remained in India until 1784 and was succeeded by Cornwallis, who initiated the Permanent Settlement, whereby an agreement in perpetuity was reached with zamindars or landlords for the collection of revenue. For the next fifty years, the British were engaged in attempts to eliminate Indian rivals, and it is under the administration of Wellesley that British territorial expansion was achieved with ruthless efficiency. Major victories were achieved against Tipu Sultan of Mysore and the Marathas, and finally the subjugation and conquest of the Sikhs in a series of Anglo- Sikh Wars led to British occupation over the entirety of India. In some places, the British practiced indirect rule, placing a Resident at the court of the native ruler who was allowed sovereignty in domestic matters. Lord Dalhousie’s notorious doctrine of lapse, whereby a native state became part of British India if there was no male heir at the death of the ruler, was one of the principal means by which native states were annexed; but often the annexation, such as that of Awadh [Oudh] in 1856, was justified on the grounds that the native prince was of evil disposition, indifferent to the welfare of his subjects. The annexation of native states, harsh revenue policies, and the plight of the Indian peasantry all contributed to the Rebellion of 1857-58, referred to previously as the Sepoy Mutiny. In 1858 the East India Company was dissolved, despite a valiant defense of its purported achievements by John Stuart Mill, and the administration of India became the responsibility of the Crown.

Document 2

The British Presence in India in the 18th Century

By Professor Peter Marshall


At the start of the 18th century, the East India Company’s presence in India was one of trade outposts. But by the end of the century, the Company was militarily dominant over South India and rapidly extending northward.

East India Company

British involvement in India during the 18th century can be divided into two phases, one ending and the other beginning at mid-century. In the first half of the century, the British were a trading presence at certain points along the coast; from the 1750s they began to wage war on land in eastern and south-eastern India and to reap the reward of successful warfare, which was the exercise of political power, notably over the rich province of Bengal. By the end of the century British rule had been consolidated over the first conquests and it was being extended up the Ganges valley to Delhi and over most of the peninsula of southern India. By then the British had established a military dominance that would enable them in the next fifty years to subdue all the remaining Indian states of any consequence, either conquering them or forcing their rulers to become subordinate allies.

At the beginning of the 18th century English commerce with India was nearly a hundred years old. It was transacted by the East India Company, which had been given a monopoly of all English trade to Asia by royal grant at its foundation in 1600. Through many vicissitudes, the Company had evolved into a commercial concern only matched in size by its Dutch rival. Some 3000 shareholders subscribed to a stock of £3 200 000; a further £6 million was borrowed on short-term bonds; twenty or thirty ships a year were sent to Asia and annual sales in London were worth up to £2 million. Twenty-four directors, elected annually by the shareholders ran the Company’s operations from its headquarters in the City of London.

Towards the end of the 17th century India became the focal point of the Company’s trade. Cotton cloth woven by Indian weavers was being imported into Britain in huge quantities to supply a worldwide demand for cheap, washable, lightweight fabrics for dresses and furnishings. The Company’s main settlements, Bombay, Madras and Calcutta were established in the Indian provinces where cotton textiles for export were most readily available. These settlements had evolved from ‘factories’ or trading posts into major commercial towns under British jurisdiction, as Indian merchants and artisans moved in to do business with the Company and with the British inhabitants who lived there.

Regional politics

The East India Company’s trade was built on a sophisticated Indian economy. India offered foreign traders the skills of its artisans in weaving cloth and winding raw silk, agricultural products for export, such as sugar, the indigo dye or opium, and the services of substantial merchants and rich bankers. During the 17th century at least, the effective rule maintained by the Mughal emperors throughout much of the subcontinent provided a secure framework for trade.

The Company’s Indian trade in the first half of the 18th century seemed to be established on a stable and profitable basis. Those who directed its affairs in London could see no case for military or political intervention to try to change the status quo. The British did, however, start to intervene in Indian politics from the 1750s, and revolutionary changes in their role in India were to follow. This change of course can best be explained partly in terms of changed conditions in India and partly as a consequence of the aggressive ambitions of the local British themselves.

Conditions in India were certainly changing. The Mughal empire had disintegrated and was being replaced by a variety of regional states. This did not produce a situation of anarchy and chaos, as used once to be assumed. Some of the regional states maintained stable rule and there was no marked overall economic decline throughout India. There were, however, conflicts within some of the new states. Contestants for power in certain coastal states were willing to seek European support for their ambitions and Europeans were only too willing to give it. In part, they acted on behalf of their companies. By the 1740s rivalry between the British and the French, who were late comers to Indian trade, was becoming acute. In southern India the British and the French allied with opposed political factions within the successor states to the Mughals to extract gains for their own companies and to weaken the position of their opponents. Private ambitions were also involved. Great personal rewards were promised to the European commanders who succeeded in placing their Indian clients on the thrones for which they were contending. A successful kingmaker, like Robert Clive, could become prodigiously rich.

new empire in India

The Anglo-French conflicts that began in the 1750s ended in 1763 with a British ascendancy in the southeast and most significantly in Bengal. There the local ruler actually took the Company’s Calcutta settlement in 1756, only to be driven out of it by British troops under Robert Clive, whose victory at Plassey in the following year enabled a new British satellite ruler to be installed. British influence quickly gave way to outright rule over Bengal, formally conceded to Clive in 1765 by the still symbolically important, if militarily impotent, Mughal emperor.

What opinion in Britain came to recognise as a new British empire in India remained under the authority of the East India Company, even if the importance of the national concerns now involved meant that the Company had to submit to increasingly close supervision by the British state and to periodical inquiries by parliament. In India, the governors of the Company’s commercial settlements became governors of provinces and, although the East India Company continued to trade, many of its servants became administrators in the new British regimes. Huge armies were created, largely composed of Indian sepoys but with some regular British regiments. These armies were used to defend the Company’s territories, to coerce neighbouring Indian states and to crush any potential internal resistance.

Company government

The new Company governments were based on those of the Indian states that they had displaced and much of the effective work of administration was initially still done by Indians. Collection of taxes was the main function of government. About one third of the produce of the land was extracted from the cultivators and passed up to the state through a range of intermediaries, who were entitled to keep a proportion for themselves.

In addition to enforcing a system whose yield provided the Company with the resources to maintain its armies and finance its trade, British officials tried to fix what seemed to them to be an appropriate balance between the rights of the cultivating peasants and those of the intermediaries, who resembled landlords. British judges also supervised the courts, which applied Hindu or Islamic rather than British law. There was as yet little belief in the need for outright innovation. On the contrary, men like Warren Hastings, who ruled British Bengal from 1772 to 1785, believed that Indian institutions were well adapted to Indian needs and that the new British governments should try to restore an ‘ancient constitution’, which had been subverted during the upheavals of the 18th century. If this were done, provinces like Bengal would naturally recover their legendary past prosperity.

By the end of the century, however, opinions were changing. India seemed to be suffering not merely from an unfortunate recent history but from deeply ingrained backwardness. It needed to be ‘improved’ by firm, benevolent foreign rule. Various strategies for improvement were being discussed. Property relations should be reformed to give greater security to the ownership of land. Laws should be codified on scientific principles. All obstacles to free trade between Britain and India should be removed, thus opening India’s economy to the stimulus of an expanding trade with Europe. Education should be remodelled. The ignorance and superstition thought to be inculcated by Asian religions should be challenged by missionaries propagating the rationality embodied in Christianity. The implementation of improvement in any systematic way lay in the future, but commitment to governing in Indian ways through Indians was waning fast.

Territorial expansion

The conquests that had begun in the 1750s had never been sanctioned in Britain and both the national government and the directors of the Company insisted that further territorial expansion must be curbed. This proved a vain hope. The Company’s new domains made it a participant in the complex politics of post-Mughal India. It sought to keep potential enemies at a distance by forming alliances with neighbouring states. These alliances led to increasing intervention in the affairs of such states and to wars fought on their behalf. In Warren Hastings’s period the British were drawn into expensive and indecisive wars on several fronts, which had a dire effect on the Company’s finances and were strongly condemned at home. By the end of the century, however, the Company’s governor general, Richard Wellesley, soon to be Marquess Wellesley, was willing to abandon policies of limited commitment and to use war as an instrument for imposing British hegemony on all the major states in the subcontinent. A series of intermittent wars was beginning which would take British authority over the next fifty years up to the mountains of Afghanistan in the west and into Burma in the east.

Source : BBC History



Document 3

From Trade to Colonization – Historic Dynamics of the East India Companies

« In the middle of the seventeenth century, Asia still had a far more important place in the world than Europe. » So wrote J. Pirenne in his ‘History of the Universe’, published in Paris in 1950. He added, « The riches of Asia were incomparably greater than those of the European states. Her industrial techniques showed a subtlety and a tradition that the European handicrafts did not possess. And there was nothing in the more modern methods used by the traders of the Western countries that Asian trade had to envy. In matters of credit, transfer of funds, insurance, and cartels, neither India, Persia, nor China had anything to learn from Europe. » (Quoted in Auguste Toussaint’s ‘History of the Indian Ocean’)

Such was the situation when the East India Company began its trading activities in the early 17th century. Initially, the British traders had come to India with hopes of selling Britain’s most popular export item to Continental Europe – British Broadcloth, but were disappointed to find little demand for it. Instead, like their Portuguese counterparts, they found several Indian-made items they could sell quite profitably in their homeland. Competing with other European traders, and competing with several other trade routes to Europe (the Red Sea route through Egypt, the Persian Gulf Route through Iraq, and the Northern Caravan Route through Afghanistan, Persia and Turkey), the early British Traders were in no position to dictate terms. They had to seek concessions with a measure of humility and offer trade terms that offered at least some benefits to the local rulers and merchants. While Aurangzeb (who had, perhaps, seen the connection between growing European Trade concessions and falling revenues from the overland trade) attempted to limit and control the activities of the East India Company, not all Indian rulers had as many compunctions about making trade concessions. Besides, the East India Company was willing to persevere; fighting and cajoling for concessions, it built trading bases wherever it could along either side of the lengthy Indian coastline.

In this period, relations between Indian and Britisher were not lacking in cordiality and the East India Company included employees from both worlds. Friendships between the two nationalities developed not only within the context of business relations, but even beyond, to the point of inter-marriage. Unaffected by the pompous stuffiness of the British gentry, the British employees of the East India Company made the most of life in India – dressing in cool and comfortable Indian garments, enjoying Indian pastimes and absorbing local words in their dialect. With as yet unprejudiced eyes, these British traders delighted in the delicate craftsmanship and attractiveness of Indian manufactures and took good advantage of their growing popularity in Britain and France. So lucrative was the trade that even though India would accept nothing but silver (or gold) in return, the East India Company prospered.

Considering the long route (around the African Cape) that the British had to take in reaching England, it was surprising that they made as much money as they did. But other factors outweighed this disadvantage. First, owing to their legally sanctioned monopoly status in England, they had substantial control on the British market. Second, by buying directly at the source, they were able to eliminate the considerable mark-up that Indian goods enjoyed en-route to Europe. Thirdly, the East India Company probably enjoyed better economies of scale since their ships were amongst the largest in the Indian Ocean. In addition, they were able to develop new markets for Indian goods in Africa, and in the Americas.

And finally, (and perhaps, most significantly), as Veronica Murphy reports in ‘Europeans and the Textile Trade’ (Arts of India 1550-1900), « although the East India Company was not itself engaged in the transatlantic slave trade, the link was very close and highly profitable. » In fact, in the 18th century, the British dominated the Atlantic slave trade transporting more slaves than all the other European powers combined. In 1853, Henry Carey – author of ‘The Slave Trade, Domestic and Foreign’ wrote: « It (the British System) is the most gigantic system of slavery the world has yet seen, and therefore it is that freedom gradually disappears from every country over which England is enabled to gain control. » The Atlantic slave trade was hence, a vital contributor to the financial strength of the East Indian Trading Companies.

So much so that by the middle of the 17th century, the East India Company was re-exporting Indian goods to Europe and North Africa and even Turkey! Unsurprisingly, this was to have a severely deleterious effect on the Ottomans, the Persians, the Afghans, since much of the revenues of these states came from the India trade. It also seriously impacted the revenues of the Mughals, and while the activities of the Arab and Gujarati traders were not entirely eliminated, their trade was much curtailed, and largely reduced to the inter-Asian trade which continued unabated. In any case, the Mughal state was unable to resist centrifugal forces and rapidly disintegrated. This left the East India Company with considerably more leverage and emboldened it to expand its activities, and demand even greater concessions from Indian rulers.

But even as the Indian rulers were granting more concessions, there was a rising chorus of voices bemoaning the loss of « European » silver to Asia. At the end of the 17th century, the silk and wool merchants of France and England were unwilling to put up with the competition from Indian textiles which had become the rage in the new bourgeoisie societies of Europe. Not only did they seek bans on such trading activities of the East India Company, they also sought and won restrictions on the purchase of these items in their respective nations. These prohibitions, while not entirely eliminating the smuggling of such items, nevertheless squeezed out most of the trade, impacting the revenues of the regional Indian states that had only recently broken off from the centralized Mughal state and Bengal was the first to face the consequences.

Having lost the opportunity to profit from the Indian textile trade, the East India Company was not hesitant in changing character. In 1616, Sir Thomas Roe, an envoy of the East India Company had declared to the Mughals that war and trade were incompatible. But already in 1669 (even before the bans on the textile trade), Gerald Ungier, chief of the factory at Bombay had written to his directors:  » The time now requires you to manage your general commerce with the sword in your hands » In 1687 came the reply from the directors, advocating a Goa like British dominion in India. The French Dupleix was more or less of similiar view. Still earlier, in 1614, the Dutch Jan Pieterzoon Coen, had written to his directors: « Trade in India must be conducted and maintained under the protection and favour of your weapons, and the weapons must be supplied from the profits enjoyed by the trade, so that trade cannot be maintained without war or war without trade. » (from Auguste Toussaint’s: History of the Indian Ocean)

The Opium Trade of the 18th century (which eventually led to the Opium Wars) , when the Royal British Navy worked more or less hand in hand with the commercial interests of the East India Company, exemplified precisely such a link between war and trade. From the intertwining of war and trade, colonization was only a small step away. Plassey was a portentious indicator of a new dynamic in Indo-British relations.

Contrary to the views of several apologists for colonial rule, who still argue that the defeat of India had solely to do with « congenital flaws » or the centuries old « ennui » or  » weak character of the Asian », or the « inability of the Indians (and other Asians) to govern themselves », R. Mukerji (in Rise and Fall of the East India Company) advanced a different thesis . He argued that there were compelling economic imperatives that drew the European India Companies into the path of imperialism. He pointed out that although monopoly rights assured the India Companies of the exclusive privileges of buying and selling, it did not guarantee that they could buy cheap. For that, political control was essential.

A second problem for the East India Company was that their profits were in direct conflict with those of their British-based competitors. Under these circumstances, as long as the profit motive was paramount (which it was), the Battle at Plassey, and the Opium Wars could be seen as logical outcomes of circumstances where continued profits by legal and honorable means were simply not possible. But, had the East Company comprised of « Gentlemen Traders » as some historians have claimed, they could not have switched so easily from trading in Indian Textiles, to trading in Opium for Tea which, in modern language – would surely be described as a form of « drug-running »! Had the traders of the East India Company been « men of honour », denied the right to profitable trade, they would have simply gone bankrupt, as so many do in the world of business!

Yet, what is even more significant is that even after The East India Company had regained sizeable profits from the Opium trade, it served as no deterrence to future acts of aggression. It had become like the proverbial man-eating tiger, that having tasted blood once, would be driven to tasting it again and again. After Plassey, the East India Company had been able to force the cultivation of opium in sufficient quantities in India, and hence, procure sufficient volumes of tea for the British market, reaping significant profits. Yet, now military attacks were also to be directed against Indian (and other Asian) ships engaged in the inter-Asian trade. These attacks were to lay the ground-work for the battles against the Coromandel rulers and the Marathas whose revenues from this trade dwindled. While Plassey may have been a matter of « survival » for the East India Company, the subsequent battles were not in that category. Some historians tried to argue that competition with the French precipitated the battles in South India, but such a view is contradicted by a Frenchman, no less!

Abbe de Pradt, author of « Les Trois Ages des colonies, Paris, 1902 » wrote that with the victory at Plassey and the establishment of sovereign rights, England had demonstrated to all of Europe that it was no longer necessary for it to send precious metals obtained from the « New World » to India. She could trade on the basis of revenue acquired from taxing subjects and commodities, whereas other European countries had to trade at a « loss », with « metal currency ». The extension of English sovereignty in India, would exempt Europe from sending capital into India. Specifically, Abbe de Pradt wrote:  » the people who have enough control over India to reduce substantially the exportation of European metallic currency into Asia rule there as much for Europe’s benefit as for their own; their empire is more common than particular, more European than British; as it expands, Europe benefits, and each of their conquests is also a real conquest for the latter. » Chastizing European opponents of the British conquest, he wrote: « all the sound and fury now echoing across Europe about England’s hegemony in India are the shrieks of a blind delirium, as an anti-European uproar; it might be thought that England was taking away from every European state what it was conquering from those of Asia, whereas, on the contrary, every part of Asia that she takes for herself, she, by that very fact, takes for Europe. »

In fact, this view tallies quite closely with the observations of several later analysts who found it paradoxical that inter-European rivalries and conflicts reduced in the 18th century when compared to the 17th century, and decreased still further after Plassey. In essence, the race for the colonization of India had been won by the British, and what Abbe de Pradt was saying was that it was in French interest to enjoy the « general » benefits of this victory and not bemoan the loss of « specific » benefits from the British victory.

N.K Sinha, author of an « Economic History of Bengal » summarizes the situation in these words: « For more than two centuries the Europeans had found that the trade with Bengal whether carried on by companies or by the individual free traders or by illicit means had always been so much in favor of Bengal that the balance had to be supplied in cash. Now after Plassey supplies were at last found in Bengal  » by means independence of commerce » – referring to the forced taxes that were extracted by the East India Company from the people of Bengal.

He continues: « The trade of the country merchant began to stagnate. Armenian, Mughal, Gujarati and Bengali merchants found their free trade daily fettered and loaded. » The export, import, and manufacture of goods moved from the hands of independant Indian merchants to intermediaries hired by the British East India Company. Often this required force. Sepoys of the East India Company were sent to destroy the factories owned by Indian rivals to the East India Company. Independent weavers who refused to work for the pitiful wages that the East India Company offered had their thumbs cut off. After Plassey, the East India Company also moved to impose it’s monopoly on the internal over-land trade. In a matter of three decades after Plassey, the East India Company achieved a virtual stranglehold on the economic and political life of Eastern India.

Just as Abbe de Pradt had predicted, the benefits of colonization did not go exclusively to the British. French, Dutch and Danish rivals were also able to take advantage of the trade monopoly established by the British East India Company. With the decline of the Indian merchants, they were able to buy Indian goods at lower prices. Secondly, corrupt employees of the British East India Company engaged in considerable price gouging, cheating and local thuggery. They preferred to repatriate this illegally acquired wealth from India through French and Dutch rivals to escape detection of their cheating and to avoid taxes and customs duties in Britain. Even as Indian rivals to the British East India were wiped out, European rivals continued to survive and flourish for another 30-40 years.

The American Furber who published his research on the East India Company in 1948 (in Cambridge, Mass.) pointed out that its French and Dutch rivals continued operating until 1769 and 1798. He also indicates that it was a very cosmopolitan association. At least one-fifth of its nominal capital of pound 3,200,00 was in Dutch hands, and a large proportion of that capital came from financiers in Amsterdam, Paris, Copenhagen, and Lisbon, who were also directly concerned in the company’s affairs. Furber noted that the commercial activity of the French, the Dutch, and the Danes in the Indian Ocean during the eighteenth century clearly showed that « the time had arrived when Europeans at home or overseas who had a stake in the maintenance of European power anywhere on the Indian continent were one and all forced to take part in the work of building a British empire in India ». What Furber was pointing out was not only the substantial and cosmopolitan nature of the backing the East India Company enjoyed, but also the motivations and direct self-interest of its backers.

Thus, Plassey was to be only the first of several assaults that no regional Indian power was able to fend off successfully. While united India had largely held off the Europeans, and divided India had temporarily held off divided Europe, divided India was no match for united Europe. The conquest of India continued with conclusive defeats of the Marathas in 1818, the Sikhs in 1848 and the annexation of Awadh in 1856. 1857 was a brave attempt to rollback the victories of the East India Company, but instead it now brought on the might of the entire British imperial government. The Indian colonies of the British East India Company became British Colonial India – and so began a new phase of colonial plunder from the sub-continent. A phase that saw constant challenges to British hegemony in the region, but it was not till 1947 that a new era could be ushered.

Hence, for almost 200 years, there was a systematic transfer of wealth from India to Europe. Although Britain may have been the primary beneficiary, it’s allies in Europe and the new world benefited no less. British Banks used their Indian capital to fund industry in the US, Germany and elsewhere in Europe. The industrial revolution and the development of modern capitalism was based on the colonization of India and the rest of the world. It was the forced pauperization of the colonized world that allowed nations such as Britain, or the US to industrialize and « modernize ». Any serious analysis of modern capitalism must take this into account.

Source : Pages from the History of India: The British East India Company and Colonization


Document 4


One of the strangest parts of the history of the British Empire involves that commercial venture generally known as the East India Company, though its original name when founded by royal charter on the very last day of 1600 was the Governor and Company of Merchants of London Trading into the East Indies. As its name suggests, the company was the enterprise of London businessmen who banded together to make money importing spices from South Asia. For centuries the valuable spice trade with the East Indies (as they were long known) relied on land routes across Asia and the Middle East, but by the sixteenth century, the superior navigational technology and skills of the Portuguese for the first time permitted Europeans to cut out intermediaries and hence make themselves far greater profits. The Spanish and Portuguese had a monopoly of the East Indies spice trade until destruction of the Spanish Aramada in 1588, which permitted the British and Dutch to seek their share of this wealthy import business.

The company with the long name first entered the spice trade in the form of an old-fashioned or early capitalist venture, essentially conducting each voyage as a separate business venture with its own subsribers or stock-holders. This approach lasted for a dozen years, and then in 1612 the company switched to temporary joint stocks and finally to permanent joint stocks in 1657. Supposedly a monopoly, the company evenentually faced competition from another group of English investors and merchants, and the two merged in 1708 as the United Company of Merchants of England Trading to the East Indies.

According to the Encyclopedia Britannica,

The company met with opposition from the Dutch in the Dutch East Indies (now Indonesia) and the Portuguese. The Dutch virtually excluded company members from the East Indies after the Amboina Massacre in 1623 (an incident in which English, Japanese, and Portuguese traders were executed by Dutch authorities), but the company’s defeat of the Portuguese in India (1612) won them trading concessions from the Mughal Empire. The company settled down to a trade in cotton and silk piece goods, indigo, and saltpetre, with spices from South India. It extended its activities to the Persian Gulf, Southeast Asia, and East Asia.

The company’s encounters with foreign competitors eventually required it to assemble its own military and administrative departments, thereby becoming an imperial power in its own right, though the British government began to reign it in by the late eighteenth century. Before Parliament created a government-controlled policy-making body with the Regulating Act of 1773 and the India Act eleven years later, shareholders’ meetings made decisions about Britain’s de facto colonies in the East. The British government took away the Company’s monopoly in 1813, and after 1834 it worked as the government’s agency until the 1857 India Mutiny when the Colonial Office took full control. The East India Company went out of existence in 1873.

During its heyday, the East India Company not only established trade through Asia and the Middle East but also effectively became of the ruler of territories vastly larger than the United Kingdrom itself. In addition, it also created, rather than conquered, colonies. Singapore, for example, was an island with very few Malay inhabitants in 1819 when Sir Stamford Raffles purchased it for the Company from their ruler, the Sultan of Johor, and created what eventually became one of the world’s greatest trans-shipment ports.

Source : Victorian web