The East India Company was an English joint-stock company formed for pursuing trade with the East Indies but which ended up trading mainly with the Indian subcontinent. Shares of the company were owned by wealthy merchants and aristocrats. The government owned no shares and had only indirect control. The Company operated its own large army with which it controlled major portions of India. The East India Company traded mainly in cotton, silk, indigo dye, salt , saltpetre, tea and opium. The Company also came to rule large areas of India, exercising military power and assuming administrative functions. Company effectively began in 1757 after the Battle of Plassey and lasted until 1858 when, following the Indian Rebellion of 1857, the Government of India Act 1858 led to the British Crown assuming direct control of India in the new British Raj. The Company was dissolved in 1874 as a result of the East India Stock Dividend Redemption Act.
Soon after 1588, London merchants presented a petition to Queen Elizabeth I for permission to sail to the Indian Ocean. The permission was granted and in 1591 three ships sailed from England. For a period of fifteen years the company was awarded the newly a monopoly on trade with all countries east of the Cape of Good Hope and west of the Straits of Magellan. Sir James Lancaster commanded the first East India Company voyage in 1601. Initially, the Company struggled in the spice trade due to the competition from the already well established Dutch East India Company. During this time ships belonging to the company arriving in India docked at Surat, which was established as a trade transit point in 1608. In the next two years, the Company built its first factory in south India in the town of Machilipatnam on the Coromandel Coast of the Bay of Bengal. The high profits reported by the Company after landing in India initially prompted King James I to grant subsidiary licenses to other trading companies in England. But in 1609 he renewed the charter given to the Company for an indefinite period.
Foothold in India
English traders frequently engaged in hostilities with their Dutch and Portuguese counterparts in the Indian Ocean. The Company achieved a major victory over the Portuguese in the Battle of Swally in 1612. The Company decided to explore the feasibility of gaining a territorial foothold in mainland India. In 1612, Sir Thomas Roe was instructed by James I to visit the Mughal Emperor Jahangir to arrange for a commercial treaty which would give the Company exclusive rights to reside and build factories in Surat and other areas. In return, the Company offered to provide the Emperor with goods and rarities from the European market. This mission was highly successful. Mughal king Jahangir allowed British Company to establish their business in Gujrat. European powers French, British, and Dutch began to fight among themselves for hegemony in India.
The Company soon expanded its commercial trading operations, eclipsing the Portuguese Estado da India, which had established bases in Goa, Chittagong and Bombay. The Company created trading posts in Surat (1612), Madras (1639), Bombay (1668), and Calcutta (1690). By 1647, the Company had 23 factories, each under the command of a master merchant and governor if so chosen, and had 90 employees in India. In 1634, the Mughal emperor extended his hospitality to the English traders to the region of Bengal, and in 1717 completely waived customs duties for the trade. The company's mainstay businesses were by then in cotton, silk, indigo dye, saltpetre and tea. The Dutch were aggressive competitors. With reduced Portuguese and Spanish influence in the region, the EIC and Dutch East India Company (VOC) entered a period of intense competition, resulting in the Anglo-Dutch Wars of the 17th and 18th centuries. The status of the Company was further enhanced by the restoration of monarchy in England. In an act...