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From Trade to Territory                   
The Company Establishes Power
2
Aurangzeb was the last of the powerful Mughal rulers. He 
established control over a very large part of the territory 
that is now known as India. After his death in 1707, 
many Mughal governors (subadars) and big zamindars 
began asserting their authority and establishing regional 
kingdoms. As powerful regional kingdoms emerged in 
various parts of India, Delhi could no longer function as 
an effective centre.
By the second half of the eighteenth century, 
however, a new power was emerging on the political 
horizon – the British. Did you know that the British 
originally came as a small trading company and were 
reluctant to acquire territories? How then did they come 
to be masters of a vast empire? In this chapter you will 
see how this came about.
Fig. 1 – Bahadur Shah Zafar  
and his sons being arrested by 
Captain Hodson
After Aurangzeb there was no 
powerful Mughal ruler, but 
Mughal emperors continued to 
be symbolically important. In 
fact, when a massive rebellion 
against British rule broke out in 
1857, Bahadur Shah Zafar, the 
Mughal emperor at the time, was 
seen as the natural leader. Once 
the revolt was put down by the 
company, Bahadur Shah Zafar 
was forced to leave the kingdom, 
and his sons were shot in  
cold blood. 
chap 1-4.indd   9 4/22/2022   2:49:25 PM
Reprint 2024-25
Page 2


From Trade to Territory                   
The Company Establishes Power
2
Aurangzeb was the last of the powerful Mughal rulers. He 
established control over a very large part of the territory 
that is now known as India. After his death in 1707, 
many Mughal governors (subadars) and big zamindars 
began asserting their authority and establishing regional 
kingdoms. As powerful regional kingdoms emerged in 
various parts of India, Delhi could no longer function as 
an effective centre.
By the second half of the eighteenth century, 
however, a new power was emerging on the political 
horizon – the British. Did you know that the British 
originally came as a small trading company and were 
reluctant to acquire territories? How then did they come 
to be masters of a vast empire? In this chapter you will 
see how this came about.
Fig. 1 – Bahadur Shah Zafar  
and his sons being arrested by 
Captain Hodson
After Aurangzeb there was no 
powerful Mughal ruler, but 
Mughal emperors continued to 
be symbolically important. In 
fact, when a massive rebellion 
against British rule broke out in 
1857, Bahadur Shah Zafar, the 
Mughal emperor at the time, was 
seen as the natural leader. Once 
the revolt was put down by the 
company, Bahadur Shah Zafar 
was forced to leave the kingdom, 
and his sons were shot in  
cold blood. 
chap 1-4.indd   9 4/22/2022   2:49:25 PM
Reprint 2024-25
10 OUR PASTS – III
East India Company 
Comes East
In 1600, the East India 
Company acquired a charter 
from the ruler of England, 
Queen Elizabeth I, granting 
it the sole right to trade with 
the East. This meant that 
no other trading group in 
England could compete with 
the East India Company. With 
this charter, the Company 
could venture across the 
oceans, looking for new lands 
from which it could buy goods 
at a cheap price, and carry them back to Europe to 
sell at higher prices. The Company did not have to fear 
competition from other English trading companies. 
Mercantile trading companies in those days made profit 
primarily by excluding competition, so that they could 
buy cheap and sell dear.
The royal charter, however, could not prevent other 
European powers from entering the Eastern markets. 
By the time the first English ships sailed down the 
west coast of Africa, round the Cape of Good Hope, and 
crossed the Indian Ocean, the Portuguese had already 
established their presence in the western coast of India, 
and had their base in Goa. In fact, it was Vasco da 
Gama, a Portuguese explorer, who had discovered this 
sea route to India in 1498. By the early seventeenth 
century, the Dutch too were exploring the possibilities 
of trade in the Indian Ocean. Soon the French traders 
arrived on the scene. 
The problem was that all the companies were 
interested in buying the same things. The fine qualities 
of cotton and silk produced in India had a big market 
in Europe. Pepper, cloves, cardamom and cinnamon 
too were in great demand. Competition amongst the 
European companies inevitably pushed up the prices 
at which these goods could be purchased, and this 
reduced the profits that could be earned. The only way 
the trading companies could flourish was by eliminating 
rival competitors. The urge to secure markets, therefore, 
led to fierce battles between the trading companies. 
Through the seventeenth and eighteenth centuries they 
regularly sank each other’s ships, blockaded routes, 
and prevented rival ships from moving with supplies of 
Fig. 2 –  Routes to India in the 
eighteenth century
Mercantile – A business 
enterprise that makes 
profit primarily through 
trade, buying goods 
cheap and selling them at 
higher prices
chap 1-4.indd   10 4/22/2022   2:49:26 PM
Reprint 2024-25
Page 3


From Trade to Territory                   
The Company Establishes Power
2
Aurangzeb was the last of the powerful Mughal rulers. He 
established control over a very large part of the territory 
that is now known as India. After his death in 1707, 
many Mughal governors (subadars) and big zamindars 
began asserting their authority and establishing regional 
kingdoms. As powerful regional kingdoms emerged in 
various parts of India, Delhi could no longer function as 
an effective centre.
By the second half of the eighteenth century, 
however, a new power was emerging on the political 
horizon – the British. Did you know that the British 
originally came as a small trading company and were 
reluctant to acquire territories? How then did they come 
to be masters of a vast empire? In this chapter you will 
see how this came about.
Fig. 1 – Bahadur Shah Zafar  
and his sons being arrested by 
Captain Hodson
After Aurangzeb there was no 
powerful Mughal ruler, but 
Mughal emperors continued to 
be symbolically important. In 
fact, when a massive rebellion 
against British rule broke out in 
1857, Bahadur Shah Zafar, the 
Mughal emperor at the time, was 
seen as the natural leader. Once 
the revolt was put down by the 
company, Bahadur Shah Zafar 
was forced to leave the kingdom, 
and his sons were shot in  
cold blood. 
chap 1-4.indd   9 4/22/2022   2:49:25 PM
Reprint 2024-25
10 OUR PASTS – III
East India Company 
Comes East
In 1600, the East India 
Company acquired a charter 
from the ruler of England, 
Queen Elizabeth I, granting 
it the sole right to trade with 
the East. This meant that 
no other trading group in 
England could compete with 
the East India Company. With 
this charter, the Company 
could venture across the 
oceans, looking for new lands 
from which it could buy goods 
at a cheap price, and carry them back to Europe to 
sell at higher prices. The Company did not have to fear 
competition from other English trading companies. 
Mercantile trading companies in those days made profit 
primarily by excluding competition, so that they could 
buy cheap and sell dear.
The royal charter, however, could not prevent other 
European powers from entering the Eastern markets. 
By the time the first English ships sailed down the 
west coast of Africa, round the Cape of Good Hope, and 
crossed the Indian Ocean, the Portuguese had already 
established their presence in the western coast of India, 
and had their base in Goa. In fact, it was Vasco da 
Gama, a Portuguese explorer, who had discovered this 
sea route to India in 1498. By the early seventeenth 
century, the Dutch too were exploring the possibilities 
of trade in the Indian Ocean. Soon the French traders 
arrived on the scene. 
The problem was that all the companies were 
interested in buying the same things. The fine qualities 
of cotton and silk produced in India had a big market 
in Europe. Pepper, cloves, cardamom and cinnamon 
too were in great demand. Competition amongst the 
European companies inevitably pushed up the prices 
at which these goods could be purchased, and this 
reduced the profits that could be earned. The only way 
the trading companies could flourish was by eliminating 
rival competitors. The urge to secure markets, therefore, 
led to fierce battles between the trading companies. 
Through the seventeenth and eighteenth centuries they 
regularly sank each other’s ships, blockaded routes, 
and prevented rival ships from moving with supplies of 
Fig. 2 –  Routes to India in the 
eighteenth century
Mercantile – A business 
enterprise that makes 
profit primarily through 
trade, buying goods 
cheap and selling them at 
higher prices
chap 1-4.indd   10 4/22/2022   2:49:26 PM
Reprint 2024-25
FROM TRADE TO TERRITORY         11
goods. Trade was carried on with arms and trading posts 
were protected through fortification. 
This effort to fortify settlements and carry on profitable 
trade also led to intense conflict with local rulers. The 
company therefore found it difficult to separate trade from 
politics. Let us see how this happened. 
East India Company begins trade in Bengal
The first English factory was set up on the banks of                  
the river Hugli in 1651. This was the base from which 
the Company’s traders, known at that time as “factors”, 
operated. The factory had a warehouse where goods for 
export were stored, and it had offices where Company 
officials sat. As trade expanded, the Company persuaded 
merchants and traders to come and settle near the factory. 
By 1696, it began building a fort around the settlement. 
Two years later, it bribed Mughal officials into giving the 
Company zamindari rights over three villages. One of these 
was Kalikata, which later grew into the city of Calcutta 
or Kolkata as it is known today. It also persuaded the 
Mughal emperor Aurangzeb to issue a farman granting 
the Company the right to trade duty free.
The Company tried continuously to press for 
more concessions and manipulate existing privileges. 
Aurangzeb’s farman, for instance, had granted only the 
Company the right to trade duty free. But officials of  
the Company, who were carrying on private trade on 
the side, were expected to pay duty. This they refused 
to pay, causing an enormous loss of revenue for Bengal. 
How could the Nawab of Bengal, Murshid Quli Khan,  
not protest?
Fig. 3 – Local boats bring goods 
from ships in Madras, painted by 
William Simpson, 1867
Farman – A royal edict, 
a royal order
chap 1-4.indd   11 4/22/2022   2:49:27 PM
Reprint 2024-25
Page 4


From Trade to Territory                   
The Company Establishes Power
2
Aurangzeb was the last of the powerful Mughal rulers. He 
established control over a very large part of the territory 
that is now known as India. After his death in 1707, 
many Mughal governors (subadars) and big zamindars 
began asserting their authority and establishing regional 
kingdoms. As powerful regional kingdoms emerged in 
various parts of India, Delhi could no longer function as 
an effective centre.
By the second half of the eighteenth century, 
however, a new power was emerging on the political 
horizon – the British. Did you know that the British 
originally came as a small trading company and were 
reluctant to acquire territories? How then did they come 
to be masters of a vast empire? In this chapter you will 
see how this came about.
Fig. 1 – Bahadur Shah Zafar  
and his sons being arrested by 
Captain Hodson
After Aurangzeb there was no 
powerful Mughal ruler, but 
Mughal emperors continued to 
be symbolically important. In 
fact, when a massive rebellion 
against British rule broke out in 
1857, Bahadur Shah Zafar, the 
Mughal emperor at the time, was 
seen as the natural leader. Once 
the revolt was put down by the 
company, Bahadur Shah Zafar 
was forced to leave the kingdom, 
and his sons were shot in  
cold blood. 
chap 1-4.indd   9 4/22/2022   2:49:25 PM
Reprint 2024-25
10 OUR PASTS – III
East India Company 
Comes East
In 1600, the East India 
Company acquired a charter 
from the ruler of England, 
Queen Elizabeth I, granting 
it the sole right to trade with 
the East. This meant that 
no other trading group in 
England could compete with 
the East India Company. With 
this charter, the Company 
could venture across the 
oceans, looking for new lands 
from which it could buy goods 
at a cheap price, and carry them back to Europe to 
sell at higher prices. The Company did not have to fear 
competition from other English trading companies. 
Mercantile trading companies in those days made profit 
primarily by excluding competition, so that they could 
buy cheap and sell dear.
The royal charter, however, could not prevent other 
European powers from entering the Eastern markets. 
By the time the first English ships sailed down the 
west coast of Africa, round the Cape of Good Hope, and 
crossed the Indian Ocean, the Portuguese had already 
established their presence in the western coast of India, 
and had their base in Goa. In fact, it was Vasco da 
Gama, a Portuguese explorer, who had discovered this 
sea route to India in 1498. By the early seventeenth 
century, the Dutch too were exploring the possibilities 
of trade in the Indian Ocean. Soon the French traders 
arrived on the scene. 
The problem was that all the companies were 
interested in buying the same things. The fine qualities 
of cotton and silk produced in India had a big market 
in Europe. Pepper, cloves, cardamom and cinnamon 
too were in great demand. Competition amongst the 
European companies inevitably pushed up the prices 
at which these goods could be purchased, and this 
reduced the profits that could be earned. The only way 
the trading companies could flourish was by eliminating 
rival competitors. The urge to secure markets, therefore, 
led to fierce battles between the trading companies. 
Through the seventeenth and eighteenth centuries they 
regularly sank each other’s ships, blockaded routes, 
and prevented rival ships from moving with supplies of 
Fig. 2 –  Routes to India in the 
eighteenth century
Mercantile – A business 
enterprise that makes 
profit primarily through 
trade, buying goods 
cheap and selling them at 
higher prices
chap 1-4.indd   10 4/22/2022   2:49:26 PM
Reprint 2024-25
FROM TRADE TO TERRITORY         11
goods. Trade was carried on with arms and trading posts 
were protected through fortification. 
This effort to fortify settlements and carry on profitable 
trade also led to intense conflict with local rulers. The 
company therefore found it difficult to separate trade from 
politics. Let us see how this happened. 
East India Company begins trade in Bengal
The first English factory was set up on the banks of                  
the river Hugli in 1651. This was the base from which 
the Company’s traders, known at that time as “factors”, 
operated. The factory had a warehouse where goods for 
export were stored, and it had offices where Company 
officials sat. As trade expanded, the Company persuaded 
merchants and traders to come and settle near the factory. 
By 1696, it began building a fort around the settlement. 
Two years later, it bribed Mughal officials into giving the 
Company zamindari rights over three villages. One of these 
was Kalikata, which later grew into the city of Calcutta 
or Kolkata as it is known today. It also persuaded the 
Mughal emperor Aurangzeb to issue a farman granting 
the Company the right to trade duty free.
The Company tried continuously to press for 
more concessions and manipulate existing privileges. 
Aurangzeb’s farman, for instance, had granted only the 
Company the right to trade duty free. But officials of  
the Company, who were carrying on private trade on 
the side, were expected to pay duty. This they refused 
to pay, causing an enormous loss of revenue for Bengal. 
How could the Nawab of Bengal, Murshid Quli Khan,  
not protest?
Fig. 3 – Local boats bring goods 
from ships in Madras, painted by 
William Simpson, 1867
Farman – A royal edict, 
a royal order
chap 1-4.indd   11 4/22/2022   2:49:27 PM
Reprint 2024-25
12 OUR PASTS – III
How trade led to battles
Through the early eighteenth century, the conflict between 
the Company and the nawabs of Bengal intensified.  
After the death of Aurangzeb, the Bengal nawabs 
asserted their power and autonomy, as other regional 
powers were doing at that time. Murshid Quli Khan 
was followed by Alivardi Khan and then Sirajuddaulah 
as the Nawab of Bengal. Each one of them was a strong 
ruler. They refused to grant the Company concessions, 
demanded large tributes for the Company’s right to 
trade, denied it any right to mint coins, and stopped it 
from extending its fortifications. Accusing the Company 
of deceit, they claimed that the Company was depriving 
the Bengal government of huge amounts of revenue and 
undermining the authority of the nawab. It was refusing 
to pay taxes, writing disrespectful letters, and trying to 
humiliate the nawab and his officials. 
The Company on its part declared that the unjust 
demands of the local officials were ruining the trade of 
the Company, and trade could flourish only if the duties 
were removed. It was also convinced that to expand trade, 
it had to enlarge its settlements, buy up villages, and 
rebuild its forts.    
The conflicts led to confrontations and finally culminated 
in the famous Battle of Plassey.
The Battle of Plassey 
When Alivardi Khan died in 1756, Sirajuddaulah became 
the nawab of Bengal. The Company was worried about his 
power and keen on a puppet ruler who would  willingly 
give trade concessions and other privileges. So it tried, 
though without success, to help one of Sirajuddaulah’s 
rivals become the nawab. An infuriated Sirajuddaulah 
asked the Company to stop meddling in the political 
affairs of his dominion, stop fortification, and pay the 
revenues. After negotiations failed, the Nawab marched 
with 30,000 soldiers to the English factory at Kassimbazar, 
captured the Company officials, locked the warehouse, 
disarmed all Englishmen, and blockaded English ships. 
Then he marched to Calcutta to establish control over the 
Company’s fort there. 
On hearing the news of the fall of Calcutta, 
Company officials in Madras sent forces under the 
command of Robert Clive, reinforced by naval fleets. 
Prolonged negotiations with the Nawab followed. Finally,  
in 1757, Robert Clive led the Company’s army against 
Sirajuddaulah at Plassey. One of the main reasons for  
Did you know?
Did you know how Plassey 
got its name? Plassey is an 
anglicised pronunciation  
of Palashi and the place 
derived its name from the 
palash tree known for its 
beautiful red flowers that 
yield gulal, the powder 
used in the festival of Holi.
Fig. 4 – Robert Clive 
Puppet – Literally, a toy 
that you can move with 
strings. The term is used 
disapprovingly to refer to 
a person who is controlled 
by someone else.
chap 1-4.indd   12 4/22/2022   2:49:28 PM
Reprint 2024-25
Page 5


From Trade to Territory                   
The Company Establishes Power
2
Aurangzeb was the last of the powerful Mughal rulers. He 
established control over a very large part of the territory 
that is now known as India. After his death in 1707, 
many Mughal governors (subadars) and big zamindars 
began asserting their authority and establishing regional 
kingdoms. As powerful regional kingdoms emerged in 
various parts of India, Delhi could no longer function as 
an effective centre.
By the second half of the eighteenth century, 
however, a new power was emerging on the political 
horizon – the British. Did you know that the British 
originally came as a small trading company and were 
reluctant to acquire territories? How then did they come 
to be masters of a vast empire? In this chapter you will 
see how this came about.
Fig. 1 – Bahadur Shah Zafar  
and his sons being arrested by 
Captain Hodson
After Aurangzeb there was no 
powerful Mughal ruler, but 
Mughal emperors continued to 
be symbolically important. In 
fact, when a massive rebellion 
against British rule broke out in 
1857, Bahadur Shah Zafar, the 
Mughal emperor at the time, was 
seen as the natural leader. Once 
the revolt was put down by the 
company, Bahadur Shah Zafar 
was forced to leave the kingdom, 
and his sons were shot in  
cold blood. 
chap 1-4.indd   9 4/22/2022   2:49:25 PM
Reprint 2024-25
10 OUR PASTS – III
East India Company 
Comes East
In 1600, the East India 
Company acquired a charter 
from the ruler of England, 
Queen Elizabeth I, granting 
it the sole right to trade with 
the East. This meant that 
no other trading group in 
England could compete with 
the East India Company. With 
this charter, the Company 
could venture across the 
oceans, looking for new lands 
from which it could buy goods 
at a cheap price, and carry them back to Europe to 
sell at higher prices. The Company did not have to fear 
competition from other English trading companies. 
Mercantile trading companies in those days made profit 
primarily by excluding competition, so that they could 
buy cheap and sell dear.
The royal charter, however, could not prevent other 
European powers from entering the Eastern markets. 
By the time the first English ships sailed down the 
west coast of Africa, round the Cape of Good Hope, and 
crossed the Indian Ocean, the Portuguese had already 
established their presence in the western coast of India, 
and had their base in Goa. In fact, it was Vasco da 
Gama, a Portuguese explorer, who had discovered this 
sea route to India in 1498. By the early seventeenth 
century, the Dutch too were exploring the possibilities 
of trade in the Indian Ocean. Soon the French traders 
arrived on the scene. 
The problem was that all the companies were 
interested in buying the same things. The fine qualities 
of cotton and silk produced in India had a big market 
in Europe. Pepper, cloves, cardamom and cinnamon 
too were in great demand. Competition amongst the 
European companies inevitably pushed up the prices 
at which these goods could be purchased, and this 
reduced the profits that could be earned. The only way 
the trading companies could flourish was by eliminating 
rival competitors. The urge to secure markets, therefore, 
led to fierce battles between the trading companies. 
Through the seventeenth and eighteenth centuries they 
regularly sank each other’s ships, blockaded routes, 
and prevented rival ships from moving with supplies of 
Fig. 2 –  Routes to India in the 
eighteenth century
Mercantile – A business 
enterprise that makes 
profit primarily through 
trade, buying goods 
cheap and selling them at 
higher prices
chap 1-4.indd   10 4/22/2022   2:49:26 PM
Reprint 2024-25
FROM TRADE TO TERRITORY         11
goods. Trade was carried on with arms and trading posts 
were protected through fortification. 
This effort to fortify settlements and carry on profitable 
trade also led to intense conflict with local rulers. The 
company therefore found it difficult to separate trade from 
politics. Let us see how this happened. 
East India Company begins trade in Bengal
The first English factory was set up on the banks of                  
the river Hugli in 1651. This was the base from which 
the Company’s traders, known at that time as “factors”, 
operated. The factory had a warehouse where goods for 
export were stored, and it had offices where Company 
officials sat. As trade expanded, the Company persuaded 
merchants and traders to come and settle near the factory. 
By 1696, it began building a fort around the settlement. 
Two years later, it bribed Mughal officials into giving the 
Company zamindari rights over three villages. One of these 
was Kalikata, which later grew into the city of Calcutta 
or Kolkata as it is known today. It also persuaded the 
Mughal emperor Aurangzeb to issue a farman granting 
the Company the right to trade duty free.
The Company tried continuously to press for 
more concessions and manipulate existing privileges. 
Aurangzeb’s farman, for instance, had granted only the 
Company the right to trade duty free. But officials of  
the Company, who were carrying on private trade on 
the side, were expected to pay duty. This they refused 
to pay, causing an enormous loss of revenue for Bengal. 
How could the Nawab of Bengal, Murshid Quli Khan,  
not protest?
Fig. 3 – Local boats bring goods 
from ships in Madras, painted by 
William Simpson, 1867
Farman – A royal edict, 
a royal order
chap 1-4.indd   11 4/22/2022   2:49:27 PM
Reprint 2024-25
12 OUR PASTS – III
How trade led to battles
Through the early eighteenth century, the conflict between 
the Company and the nawabs of Bengal intensified.  
After the death of Aurangzeb, the Bengal nawabs 
asserted their power and autonomy, as other regional 
powers were doing at that time. Murshid Quli Khan 
was followed by Alivardi Khan and then Sirajuddaulah 
as the Nawab of Bengal. Each one of them was a strong 
ruler. They refused to grant the Company concessions, 
demanded large tributes for the Company’s right to 
trade, denied it any right to mint coins, and stopped it 
from extending its fortifications. Accusing the Company 
of deceit, they claimed that the Company was depriving 
the Bengal government of huge amounts of revenue and 
undermining the authority of the nawab. It was refusing 
to pay taxes, writing disrespectful letters, and trying to 
humiliate the nawab and his officials. 
The Company on its part declared that the unjust 
demands of the local officials were ruining the trade of 
the Company, and trade could flourish only if the duties 
were removed. It was also convinced that to expand trade, 
it had to enlarge its settlements, buy up villages, and 
rebuild its forts.    
The conflicts led to confrontations and finally culminated 
in the famous Battle of Plassey.
The Battle of Plassey 
When Alivardi Khan died in 1756, Sirajuddaulah became 
the nawab of Bengal. The Company was worried about his 
power and keen on a puppet ruler who would  willingly 
give trade concessions and other privileges. So it tried, 
though without success, to help one of Sirajuddaulah’s 
rivals become the nawab. An infuriated Sirajuddaulah 
asked the Company to stop meddling in the political 
affairs of his dominion, stop fortification, and pay the 
revenues. After negotiations failed, the Nawab marched 
with 30,000 soldiers to the English factory at Kassimbazar, 
captured the Company officials, locked the warehouse, 
disarmed all Englishmen, and blockaded English ships. 
Then he marched to Calcutta to establish control over the 
Company’s fort there. 
On hearing the news of the fall of Calcutta, 
Company officials in Madras sent forces under the 
command of Robert Clive, reinforced by naval fleets. 
Prolonged negotiations with the Nawab followed. Finally,  
in 1757, Robert Clive led the Company’s army against 
Sirajuddaulah at Plassey. One of the main reasons for  
Did you know?
Did you know how Plassey 
got its name? Plassey is an 
anglicised pronunciation  
of Palashi and the place 
derived its name from the 
palash tree known for its 
beautiful red flowers that 
yield gulal, the powder 
used in the festival of Holi.
Fig. 4 – Robert Clive 
Puppet – Literally, a toy 
that you can move with 
strings. The term is used 
disapprovingly to refer to 
a person who is controlled 
by someone else.
chap 1-4.indd   12 4/22/2022   2:49:28 PM
Reprint 2024-25
FROM TRADE TO TERRITORY         13
the defeat of the Nawab was that the forces led by Mir Jafar, one 
of Sirajuddaulah’s commanders, never fought the battle. Clive had 
managed to secure his support by promising to make him nawab after 
crushing Sirajuddaulah. 
The Battle of Plassey became famous because it was the first major 
victory the Company won in India. 
Fig. 5 – The General 
Court Room, East 
India House, 
Leadenhall Street
The Court of 
Proprietors of the 
East India Company 
had their meetings 
in the East India 
House on Leadenhall 
Street in London. 
This is a picture of 
one of their meetings 
in progress.
The promise of riches
The territorial ambitions of the mercantile East India 
Company were viewed with distrust and doubt in England. 
After the Battle of Plassey, Robert Clive wrote to William 
Pitt, one of the Principal Secretaries of State to the English 
monarch, on 7
 
January 1759 from Calcutta: 
But so large a sovereignty may possibly be an object too 
extensive for a mercantile Company … I flatter myself 
… that there will be little or no difficulty in obtaining 
the absolute possession of these rich kingdoms: ... Now 
I leave you to judge, whether an income yearly of two 
million sterling with the possession of three provinces 
… be an object deserving the public attention ...
Source 1
Fig. 6 –  Sirajuddaulah
chap 1-4.indd   13 4/22/2022   2:49:30 PM
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FAQs on NCERT Textbook: From Trade to Territory (The Company Establishes Power) - Old & New NCERTs for IAS Preparation (Must Read) - UPSC

1. What was the East India Company?
Ans. The East India Company was a British trading company that was established in 1600 and granted a royal charter by Queen Elizabeth I. The company was granted a monopoly on English trade with the East Indies and was given the power to establish trading posts across Asia.
2. How did the East India Company establish power in India?
Ans. The East India Company established power in India through a combination of military conquest, political maneuvering, and economic exploitation. The company used its military power to defeat the Indian rulers and establish control over their territories. It also appointed its own officials to govern these territories and imposed its own laws and taxes.
3. What was the significance of the Battle of Plassey?
Ans. The Battle of Plassey was a significant event in the history of British India as it marked the beginning of the British East India Company's control over large parts of India. The battle was fought between the British East India Company and the forces of the Nawab of Bengal in 1757. The British victory in the battle gave them control over Bengal, which was the richest and most populous province in India.
4. What was the Regulating Act of 1773?
Ans. The Regulating Act of 1773 was an Act of the British Parliament that was passed to regulate the affairs of the British East India Company in India. The act was passed in response to the Company's growing power and the need for greater oversight of its activities. The act established a Governor-General of Bengal and created a Supreme Court in Calcutta to ensure the proper administration of justice.
5. What impact did the British rule have on India?
Ans. The British rule had a significant impact on India, both positive and negative. On the positive side, the British introduced modern education, transport, and communication systems, which helped to modernize India and improve the standard of living of its people. They also abolished many social evils like sati, child marriage, and untouchability. On the negative side, the British exploited India's resources and people for their own benefit, leading to widespread poverty and underdevelopment. They also imposed their own culture and values on India, which led to the loss of many traditional Indian practices and beliefs.
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