British East India Company and British Rule In India Study Material


British East India Company and British Rule In India Study Material

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On arriving in India, the East India Company had to face the Dutch and the French opposition as they were the main contestants for economic supremacy over India. But the British were successful in destabilizing them and soon the Company’s functions expanded into political ambitions. While the British company employed sepoys-European-trained and European-led Indian soldiers – to protect its trade, local rulers sought their services to settle scores in regional power struggles. South India witnessed the first open confrontation between the British and the French, whose forces were led by Robert Clive and Francois Dupleix, respectively. Both companies desired to place their own candidate as the Nawab of Arcot, an area near Chennai. At the end of a protracted struggle from 1744 to 1763, when the Peace of Paris was signed, the British gained an upper hand over the French and installed their man in power, supporting him further with arms and lending large sums of money as well. The French and the British also backed different factions in the succession struggle for Mughal viceroyalty in Bengal, but Clive intervened successfully and defeated Nawab Sirajud-Daulah in the Battle of Plassey (about 150 km north of Kolkata) in 1757. Clive was supported by a combination of vested interests that opposed the existing nawab which comprised disgruntled soldiers, landholders and influential merchants whose commercial profits were closely linked to British fortunes.

Growing British Monopoly in Trade

Even before the acquisition of Diwani of Bengal in 1765, the East India Company had begun to exercise considerable political influence in Bengal, Bihar and Orissa, which led to the ruin of Indian industry and oppression of weavers. While the foreign trade of Bengal, which was the richest part of India at that time, became the monopoly of the company, the internal trade in more important commodities like raw material was monopolized by superior servants of the company in their personal capacity. The monopoly of trade in raw materials helped to raise the prices to the manufacturers, while monopoly of purchase (monopsony) of finished products tended to lower the prices of the manufacturers. These restrictive practices together with providing the company s investments or purchasing goods in the interior through the agency of ‘gumashtas’ ruined the weavers and other artisans. But things did not stop there. The scales were heavily weighted against Indian manufacturers in two other ways, the first was the system of inland duties which offered protection to foreign products and the other was bringing many other products in the ambit of duty structure which were earlier duty-free. 

The Regulating Act of 1773

            The British Parliament enacted a series of laws to curb the company trader’s unrestrained commercial activities and to bring about some order in territories under company control The most import ant among which is the ordinance prescribing certain rules for the company. Thus, this is called the Regulating Act of 1773. This Act aimed to limit the company charter to periods of 20 years, subject to review upon renewal; the 1773 Act gave the British government supervisory rights over the Bengal. Mumbai and Chennai presidencies. Bengal was given pre-eminence over the rest because of its enormous commercial vitality and because it was the seat of British power in India (at Kolkata), and its Governor was elevated to the new position of Governor-General. Warren Hastings was the first incumbent (1773 1785). The Act was aimed at maintaining a sort of balance in the company’s administration, but in practice it failed its basic objective due to certain loopholes in the Act itself. Two new government organizations were set up to help the Governor-General to administer effectively: the British Supreme Court of Kolkata and the Kolkata Council. The relationship between the Governor-General and these new government offices was not specified clearly in terms of law. Warren Hastings had to wrestle tor his powers with both the Supreme Court and the Council on many occasions. He was condemned by the Council on the Rohilla War and for his decisions against the Begumof Awadh. These organizations reverted many of his administrative decisions which brought them in open conflict with the company. In 1781 an Amending Act was passed, which greatly reduced the powers of these organizations and allowed the company to assert its powers efficiently.

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