The Beginning Of European Settlements
India’s trade relations with Europe go back to the ancient days of the Greeks. During the Middle Ages, trade between Europe and India and South-East Asia was carried on along several routes. One was by sea along the Persian Gulf, and from there overland through Iran and Turkey, and then again by sea to Venice and Genoa. A second was via the Red Sea and then overland to Alexandria in Egypt and from there by sea to Venice and Genoa. A third, less frequented overland route lay through the passes of the North-West frontier of India, across Central Asia, and Russia to the Baltic. The Asian part of the trade was carried on mostly by Arab merchants and sailors, while the Mediterranean and European part was the virtual monopoly of the Italians. Trade remained highly profitable mainly due to the pressing demand for Eastern spices which fetched high prices in European markets. The Europeans needed spices because they lived on salted and peppered meat during the winter months, when there was little grass to feed the cattle, and only a liberal use of spices could make this meat palatable.
The old trading routes between the East and the West came under Turkish control after the Ottoman capture of Constantinople in 1453. Moreover, the merchants of Venice and Genoa monopolised the trade between Europe and Asia and refused to let the new nation-states of Western Europe, particularly Spain and Portugal, have any share in the trade through these old routes.
But the trade with India and Indonesia was too highly prized by the West Europeans to be so easily given up. The reputedly fabulous wealth of India was an additional attraction as there was an acute shortage of gold all over Europe, and gold was essential as a medium of exchange if the trade was to grow unhampered. The West European states and merchants therefore began to search for new and safer sea routes to India and Southeast Asia. They wanted to break the Arab and Venetian trade monopolies, to bypass Turkish hostility, and to open direct trade relations with the Fast They were well-equipped to do so as great advances in ship-building and the science of navigation had taken place during the 15th century. Moreover, the Renaissance had generated a great spirit of adventure among the people of Western Europe.
The first steps were taken by Portugal and Spain whose seamen, sponsored and controlled by their governments, began a great era of geographical discoveries. In 1494, Columbus of Spain set out to reach India and discovered America instead. In 1498, Vasco da Gama of Portugal discovered a new and all-sea route from Europe to India. He sailed around Africa via the Cape of Good Hope and reached Calicut. He returned with a cargo that sold for 60 times the cost of his voyage.
Portugal had a monopoly of the highly profitable Eastern trade for nearly a century. In India, she established her trading settlement as at Cochin, Goa, Diu, and Daman. From the beginning, the Portuguese combined the use of force with trade. In this they were helped by the superiority of their armed ships which enabled them to dominate the seas. Besides, they also took advantage of the mutual rivalries of the Indian princes to strengthen their position. They intervened in the conflict between the rulers of Calicut and Cochin to establish their trading centres and forts on the Malabar coast. From here they attacked and destroyed Arab shipping, brutally killing hundreds of Arab merchants and seamen.
Under the viceroyalty of Alfonso d’ Albuquerque, who captured Goa in 1510, the Portuguese established their domination over the entire Asian coast from Hormuz in the Persian Gulf to the Spice Islands in Indonesia. They seized Indian territories on the coast and waged constant war to expand their trade and dominions and safeguard their trade monopoly from their European rivals. The Portuguese were intolerant and fanatical in religious matters. They indulged in forcible conversion and their approach in this respect was particularly hateful to the people of India. They also indulged in inhuman cruelties and lawlessness. In spite of their barbaric behaviour, their possessions in India survived for a century because they enjoyed control over the high seas. But they clashed with the Mughal power in Bengal in 1631 and were driven out of their settlement at Hugli. Their hold over the Arabian sea had already been weakened by the English and their influence in Gujarat had become negligible by this time.
Portugal was incapable of maintaining for long, its trade monopoly or its dominions in the East. Its Court was autocratic and decadent; its merchants enjoyed much less power and prestige than its landed aristocrats; it lagged behind in the development of shipping; and it followed a policy of religious intolerance. The Portuguese and the Spanish had left the English and the Dutch far behind during the 15th century but, in the latter half of the 16th century, England and Holland, and later France, all growing commercial and naval powers, waged a fierce struggle against the Spanish monopoly of world trade. Portugal had become a Spanish dependency in 1580. In 1588 the English defeated the Spanish fleet called the Armada which shattered Spanish naval supremacy forever. This enabled the English and the Dutch merchants to use the Cape of Good Hope route to India and join in the race for empire in the East. In the end, the Dutch gained control over Indonesia and the British over India, Ceylon, and Malaya.
The Dutch had for long been dealing in Eastern produce which they bought in Portugal and sold all over Northern Europe. Their revolt against the Spanish domination of their homeland, the Netherlands, and Portugal’s merger with Spain made them look for alternative sources of spices. In 1595, four Dutch ships sailed to India via the Cape of Good Hope. In 1602, the Dutch East India Company was formed and the Dutch States General – the Dutch parliament – gave it a Charter empowering it to make war, conclude treaties, acquire territories and build fortresses.
The main interest of the Dutch lay not in India but in the Indonesian islands of Java, Sumatra, and the Spice Islands where spices were produced. They turned out the Portuguese from the Indonesian Islands and, in 1623, foiled English attempts to establish themselves there. They did not, however, entirely abandon Indian trade. They established trading depots at Surat, Broach, Cambay, and Ahmedabad in Gujarat and Cochin in Kerala on the western coast, Nagapatnam in Madras, Masulipatnam in Andhra and Chinsura in Bengal on the eastern coast and also at Patna in Bihar and Agra in Uttar Pradesh. In 1658, they also conquered Ceylon from the Portuguese. They exported indigo, raw silk, cotton textiles, saltpetre, and opium from India.
The English merchants too looked greedily on the Asian trade. The success of the Portuguese, the rich cargoes of various products they carried, and the high profits they made, made the merchants of England impatient to participate in such profitable commerce. But, till the end of the 16th century, they were too weak to challenge the naval might of Portugal and Spain. Gradually, they gathered strength on the sea. In 1579, Drake sailed around the world. In 1588, the defeat of the Spanish Armada led to the opening of the sea passage to the East. An English company to trade with the East was formed in 1599 and it was granted a Royal Charter and the exclusive privilege to trade in the East by Queen Elizabeth on 31 December 1600. It was popularly known as the East India Company. From the beginning, it was linked with the monarchy: Queen Elizabeth (1558-1603) was one of the shareholders of the company.
The first voyage of the English East India Company was made in 1601 when its ships sailed to the Spice Islands of Indonesia. In 1608, it decided to open a factory (the name given to a trading depot) at Surat on the West coast of India and sent Captain Hawkins to Jahangir’s Court to obtain royal favours. Initially, Hawkins was received in a friendly manner and was given a mansab of 400 and a jagir. Later, he was expelled from Agra as a result of Portuguese intrigue. This convinced the English of the need to overcome Portuguese influence at the Mughal Court if they were to obtain any concessions from the Imperial Government. They defeated a Portuguese naval squadron at Swally near Surat in 1612 and then again in 1614. These victories led the Mughals to hope that they could use the English to counter the Portuguese on the sea. Consequently, the English Company was given a royal Farman to open factories at several places on the West coast.
To further their trading interests in India, their ambassador, Sir Thomas Roe reached the Mughal court in 1615. Roe succeeded in getting a royal Farman to trade and establish factories in all parts of the Mughal Empire. This resulted in a fierce naval battle between England and Portugal in 1620 which ended in an English victory. In 1662, the Portuguese gave the island of Bombay to King Charles II of England as dowry for marrying a Portuguese Princess. The Portuguese lost all their possessions in India except Goa, Diu and Daman. The English and the Marathas benefited, the latter capturing Salsette and Bassein in 1739.
The Dutch expelled the English from the trade of the Spice Islands and the latter was compelled to concentrate on India where the situation was more favourable to them. The intermittent war in India between the two powers, which had begun in 1654, ended in 1667 when the English gave up all claims to Indonesia while the Dutch agreed to leave alone the English settlements in India.
The English East Company had very humble beginnings in India. Surat was the centre of its trade till 1687. Throughout this period the English remained petitioners before the Mughal authorities. By 1623 they had established factories at Surat, Broach, Agra, and Masulipatam. From the very beginning, the English trading company tried to combine trade and diplomacy with war and control of the territory where their factories were situated. In 1625 the Company’s authorities at Surat made an attempt to fortify their factory but the chiefs of the factory were immediately imprisoned by the local authorities of the Mughal Empire which was still in its vigour.
Conditions in the South were more favourable to the English as they did not have to face a strong government there. The Vijayanagar Kingdom had been overthrown in 1565 and its place was taken by a number of petty and weak states. It was easy to appeal to them and get trading concessions. The English opened their first factory in the South at Masulipatam in 1611. But they soon shifted the centre of their activity to Madras, the lease of which was granted to them by the Nayaka of Chandragiri in 1639. The Raja authorised them to fortify the place, to administer it, and to coin money on condition of payment to him of half of the customs revenue of the port. Here the English built a small fort around their factory called Fort St. George.
The Island of Bombay was acquired by the East India Company from the King through a lease in 1668 and was immediately fortified. In Bombay, the English found a large and easily defended port. For that reason, and because English trade was threatened at the time by the rising Maratha power, Bombay soon superseded Surat as the headquarters of the Company on the West Coast.
In Eastern India, the English Company had opened its first factories in Orissa in 1633. In 1651 it was given permission to trade at Hoogli in Bengal. It soon opened factories at Patna, Dacca and other places in Bengal and Bihar. It now desired that in Bengal too it should have an independent settlement. Their success in trade and in establishing independent and fortified settlements at Madras and at Bombay, and the preoccupation of Aurangzeb with the anti-Maratha campaigns led the English to abandon the role of humble petitioners. They now dreamt of establishing political power in India which would enable them to compel the Mughals to allow them a free hand in trade.
Hostilities between the English and the Mughal Emperor broke out in 1686 after the formerly declared war on the Emperor. But the English had seriously miscalculated the situation and underestimated Mughal strength. The Mughal forces of Aurangazeb were even now more than a match for the petty forces of the East India Company. The war ended disastrously for them. They were driven out of their factories in Bengal and compelled to seek refuge elsewhere. Their factories at Surat, Masulipatam, and Vizagapatam were seized and their fort at Bombay besieged. Having discovered that they were not yet strong enough to fight the Mughal power, the English once again became humble petitioners and submitted. They expressed their willingness to trade under the protection of the Indian rulers.
The Mughal authorities readily pardoned the English folly as they had no means of knowing that these foreign traders would one day pose a serious threat to the country. Instead, they recognised that foreign trade carried on by the Company benefited Indian artisans and merchants and thereby enriched the State treasury. Aurangzeb, therefore, permitted them to resume trade on payment of Rs.150,000 as compensation. In 1691, the Company was granted exemption from the payment of customs duties in Bengal in return for Rs. 3,000 a year. In 1698, the Company acquired the zamindari of the three villages Sutanati, Kalikata, and Govindpur where it built Fort William around its factory. The villages soon grew into a city that came to be known as Calcutta. In 1717, the Company was secured from Emperor Harukhsiyar a Farman confirming the privileges granted in 1691 and extending them to Gujarat the Deccan. But during the first half of the 18th century, Bengal was ruled by strong Nawasireh as Murshid Quli Khan and Alivardi Khan. They exercised strict control over the English traders and prevented them from misusing their privileges. Nor did they allow them to strengthen the fortifications at Calcutta or to rule the city independently.
Even though the political ambitions of the Company were checked, its commercial affairs flourished as never before. Its imports from India into England increased three times in 30 years from 500, pounds to 1,795,000 pounds. British sentiments in Madras, Bombay, and Calcutta became the nuclei of Housing cities. Large nums Indian merchants and bankers were attracted to these cities. This was partly to the men commercial opportunities available in these cities and partly to the unsettled conditions and security outside them, caused by the break-up of the Mughal Empire.