Early voyages to the East Indies
Sir James Lancaster commanded the first East India Company voyage in 1601 aboard Red Dragon. The following year, whilst sailing in the Malacca Straits, Lancaster took the rich 1,200 ton Portuguese carrack Sao Thome carrying pepper and spices. The booty enabled the voyagers to set up two "factories" (trading posts) – one at Bantam on Java and another in the Moluccas (Spice Islands) before leaving. On return to England in 1603, they learned of Elizabeth's death, but Lancaster was knighted by the new king, James I, on account of the voyage's success. By this time, the war with Spain had ended but the company had profitably breached the Spanish-Portuguese duopoly; new horizons opened for the English.
In March 1604, Sir Henry Middleton commanded the company's second voyage. General William Keeling, a captain during the second voyage, led the third voyage aboard Red Dragon from 1607 to 1610 along with Hector under Captain William Hawkins and Consent under Captain David Middleton.
Early in 1608, Alexander Sharpeigh was made captain of the company's Ascension, and general or commander of the fourth voyage. Thereafter, two ships, Ascension and Union (captained by Richard Rowles), sailed from Woolwich on 14 March 1608. This expedition was lost.
Initially, the company struggled in the spice trade because of competition from the Dutch East India Company. This rivalry led to military skirmishes, with each company establishing fortified trading posts, fleets, and alliances with local rulers. The Dutch, better financed and supported by their government, gained the upper hand by establishing a stronghold in the spice islands (now Indonesia), enforcing a near-monopoly through aggressive policies that eventually drove the EIC to seek trade opportunities in India instead. The English company opened a factory (trading post) in Bantam on Java on its first voyage, and imports of pepper from Java remained an important part of the company's trade for twenty years.
English traders frequently fought 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, at Suvali in Surat. The company decided to explore the feasibility of a foothold in mainland India, with official sanction from both Britain and the Mughal Empire, and requested that the Crown launch a diplomatic mission.
Company ships docked at Surat in Gujarat in 1608. The company's first Indian factory was established in 1611 at Masulipatnam on the Andhra Coast of the Bay of Bengal, and its second in 1615 at Surat. The high profits reported by the company after landing in India initially prompted James I to grant subsidiary licences to other trading companies in England. However, in 1609, he renewed the East India Company's charter for an indefinite period, with the proviso that its privileges would be annulled if trade was unprofitable for three consecutive years.
In 1615, James I instructed Sir Thomas Roe to visit the Mughal Emperor Nur-ud-din Salim Jahangir (r. 1605–1627) to arrange for a commercial treaty that would give the company exclusive rights to reside and establish 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, and Jahangir sent a letter to James through Sir Thomas Roe:
Upon which assurance of your royal love I have given my general command to all the kingdoms and ports of my dominions to receive all the merchants of the English nation as the subjects of my friend; that in what place soever they choose to live, they may have free liberty without any restraint; and at what port soever they shall arrive, that neither Portugal nor any other shall dare to molest their quiet; and in what city soever they shall have residence, I have commanded all my governors and captains to give them freedom answerable to their own desires; to sell, buy, and to transport into their country at their pleasure. For confirmation of our love and friendship, I desire your Majesty to command your merchants to bring in their ships of all sorts of rarities and rich goods fit for my palace; and that you be pleased to send me your royal letters by every opportunity, that I may rejoice in your health and prosperous affairs; that our friendship may be interchanged and eternal.
The company, which benefited from imperial patronage, soon expanded its commercial trading operations. It eclipsed the Portuguese Estado da Índia, which had established bases in Goa, Chittagong, and Bombay; Portugal later ceded Bombay to England as part of the dowry of Catherine of Braganza on her marriage to King Charles II. The East India Company also launched a joint attack with the Dutch United East India Company (VOC) on Portuguese and Spanish ships off the coast of China that helped secure EIC ports in China, independently attacking the Portuguese in the Persian Gulf Residencies primarily for political reasons. The company established trading posts in Surat (1619) and Madras (1639). By 1647, the company had 23 factories and settlements in India, and 90 employees. Many of the major factories became some of the most populated and commercially influential cities in Bengal, including the walled forts of Fort William in Bengal, Fort St George in Madras, and Bombay Castle.
The first century of the Company, despite its original profits coming primarily from piracy in the Spice Islands between competing European powers and their companies, saw the East India Company change focus after suffering a major setback in 1623 when their factory in Amboyna in the Moluccas was attacked by the Dutch. This compelled the company to formally abandon their efforts in the Spice Islands, and turn their attention to Bengal where, by this time, they were making steady, if less exciting, profits. After gaining the indifferent patronage of the Mughal Empire, whose cities were "the megacities of their time" and whose wealth was unrivalled outside of Asia in the 17th century, the Company's first century in the Mughal-ruled areas was spent cultivating their relationship with the Mughal Dynasty, and conducting peaceful trade at great profit. At first, it should be said the EIC was drawn into the Mughal system, acting as a kind of vassal to Mughal authority in present-day Bangladesh: it was from this position that the Company would ultimately outplay and outmanoeuvre all competing powers in the region, to eventually use that very system to hold power itself.
What started as trading posts on undesirable land were developed into sprawling factory complexes with hundreds of workers sending exotic goods to England and managing protected points to export English finished goods to local merchants. The Company's initial rise in Bengal and successes generally came at the expense of competing European powers through the art of currying favours and well-placed bribes, as the Company was matched at every step by French expansion in the region (whose equivalent company carried substantial royal support). Throughout the entire century, the company only resorted to force against the Mughals once, with terrible consequences. The Anglo-Mughal war (1686–1690) was a complete defeat, ending when the EIC effectively swore fealty to the Mughals to get their factories back. The East India Company's fortunes changed for the better in 1707 when Bengal and other regions under Mughal rule fell into anarchy after the death of the Mughal Emperor Aurangzeb. A series of large-scale rebellions, and the collapse of the Mughal taxation system led to the effective independence of virtually all of the pre-1707 Mughal fiefs and holdings, with their capital Delhi routinely under the control of Maratha, Afghan, or usurper generals' armies. The EIC was able to take advantage of this chaos, slowly assuming direct control of the province of Bengal, and fighting numerous wars against the French for control of the east coast of the subcontinent. The Company's position in the Mughal court as it fell apart made it possible to sponsor various powerful people on the subcontinent as they individually contended with others, steadily amassing more land and power in India to themselves.
In the 18th Century, the primary source of the Company's profits in Bengal became taxation in conquered and controlled provinces, as the factories became fortresses and administrative hubs for networks of tax collectors that expanded into enormous cities. The Mughal Empire was the richest in the world in 1700, and the East India Company tried to strip it bare for a century thereafter. Dalrymple calls it "the single largest transfer of wealth until the Nazis". What was in the 17th century the production capital of the world for textiles was forced to become a market for British-made textiles. Statues, jewels, and various other valuables were moved from the palaces of Bengal to the townhouses of the English countryside. Bengal in particular suffered the worst of Company tax farming, highlighted by the Great Bengal famine of 1770.
The Company found its first real territorial and financial foothold in India via the Battle of Plassey. The battle took place on June 23, 1757, wherein Robert Clive’s force of roughly 800 soldiers and 2,200 sepoys defeated the Nawab of Bengal, Siraj ud-Daula. The company was victorious largely through a prior conspiracy with the Nawab’s commander, Mir Jafar, instead of through force. The victory installed Mir Jafar as the Nawab and secured the Company a settlement worth £3 million.
Mir Jafar's subsequent dependence on Company backing drew the Company steadily deeper into the government of Bengal, culminating in 1765 when the Mughal emperor Shah Alam II granted it the diwani, the right to collect and administer the revenues of Bengal, Bihar, and Orissa. This gave the Company a public revenue on a scale previously unmatched by any other European trading enterprise, and allowed it to pay for its exports of Bengali cloth and other goods out of local tax revenue rather than by shipping bullion from Britain, a pattern historians such as Robins have called "unrequited trade." In effect, the Company had become a territorial and fiscal power as much as a commercial one.
The primary tool of expansion for the company was the Sepoy. The Sepoys were locally raised with European training and equipment, who changed warfare in present-day South Asia. Mounted forces and their superior mobility had been king on the region's battlefields for a thousand years, with cannon so well integrated that the Mughals fought with cannon mounted on elephants; all were no match for line infantry with decent discipline supported with field cannon. Repeatedly, a few thousand company sepoys fought vastly larger Mughal forces numerically and came out victorious. Afghan, Mughal, and Maratha factions started creating their own European-style forces, often with French equipment, as the chaos intensified and the stakes were raised. Ultimately, the company won out, generally through as much diplomacy and statecraft as through fraud and deception. The gradual rise of the East India Company within the Mughal network culminated in the Second Anglo-Maratha War, in which the Company successfully ousted the Maratha, the Empire's official protectors, at the high water point in their rise to power, and installed a young Mughal Prince as Emperor, with the Company as the de jure protectors of the Empire from their position of direct control in Bengal. This relationship was repeatedly strained as the Company continued its expansion and exploitation; however, it lasted in some form until 1858, when the last Mughal Emperor was exiled as the Company was disbanded and its assets were taken over by the British Crown.
In 1634, the Mughal emperor Shah Jahan extended his hospitality to English traders to Bengal, the richest region of the empire, and in 1717 customs duties were completely waived for the English in Bengal. By then, the Company's mainstay businesses were in cotton, silk, opium, indigo dye, saltpetre and tea. Meanwhile, the Dutch, the Company's most aggressive competitors, had expanded their monopoly of the spice trade in the Straits of Malacca by ousting the Portuguese in 1640–1641. With reduced Portuguese and Spanish influence in the region, the EIC and VOC entered a period of intense competition, resulting in the Anglo-Dutch wars of the 17th and 18th centuries. The British were also interested in trans-Himalayan trade routes, as they would create access to untapped markets for British manufactured goods in Tibet and China. This economic interest was showcased by the Anglo-Nepalese war (1814–1816).
Within the first two decades of the 17th century, the Dutch East India Company or Vereenigde Oostindische Compagnie (VOC) was the wealthiest commercial operation in the world with 50,000 employees worldwide and a private fleet of 200 ships. It specialised in the spice trade and gave its shareholders a 40% annual dividend. The British East India Company was fiercely competitive with the Dutch and French throughout the 17th and 18th centuries over spices from the Spice Islands. Some spices, at the time, could only be found on these islands, such as nutmeg and cloves; and they could bring profits as high as 400 per cent from one voyage. The tension was so high between the Dutch and the British East Indies Trading Companies that it escalated into at least four Anglo-Dutch wars: 1652–1654, 1665–1667, 1672–1674 and 1780–1784. Competition arose in 1635 when Charles I granted a trading licence to Sir William Courteen, which permitted the rival Courteen association to trade with the East at any location in which the EIC had no presence. In an act aimed at strengthening the power of the EIC, King Charles II granted the EIC (in a series of five acts around 1670) the rights to autonomous territorial acquisitions, to mint money, to command fortresses and troops and form alliances, to make war and peace, and to exercise both civil and criminal jurisdiction over the acquired areas.
In 1689, a Mughal fleet commanded by Sidi Yaqub attacked Bombay. After a year of resistance, the EIC surrendered in 1690, and the company sent envoys to Aurangzeb's camp to plead for a pardon. The company's envoys had to prostrate themselves before the emperor, pay a large indemnity, and promise better behaviour in the future. The emperor withdrew his troops, and the company subsequently re-established itself in Bombay and set up a new base in Calcutta.
The East India Company's archives suggest its involvement in the slave trade began in 1684, when a Captain Robert Knox was ordered to buy and transport 250 slaves from Madagascar to St. Helena. The East India Company began using and transporting slaves in Asia and the Atlantic in the early 1620s, according to the Encyclopædia Britannica, or in 1621, according to Richard Allen. Eventually, the company ended the trade in 1834 after numerous legal threats from the British state and the Royal Navy in the form of the West Africa Squadron, which discovered various ships had contained evidence of the illegal trade.
In 1613, during the rule of Tokugawa Hidetada of the Tokugawa shogunate, the British ship Clove, under the command of Captain John Saris, was the first English ship to call on Japan. Saris was the chief factor of the EIC's trading post in Java, and with the assistance of William Adams, an English sailor who had arrived in Japan in 1600, he was able to gain permission from the ruler to establish a commercial house in Hirado on the Japanese island of Kyushu:
We give free license to the subjects of the King of Great Britaine, Sir Thomas Smythe, Governor and Company of the East Indian Merchants and Adventurers forever safely come into any of our ports of our Empire of Japan with their shippes and merchandise, without any hindrance to them or their goods, and to abide, buy, sell and barter according to their own manner with all nations, to tarry here as long as they think good, and to depart at their pleasure. Unable to obtain Japanese raw silk for export to China, and with their trading area reduced to Hirado and Nagasaki from 1616 onwards, the company closed its factory in 1623.
The first of the Anglo-Indian wars occurred in 1686 when the company conducted naval operations against Shaista Khan, the governor of Mughal Bengal. This led to the siege of Bombay and the subsequent intervention of the Mughal Emperor, Aurangzeb. Subsequently, the English company was defeated and fined.
Mughal convoy piracy incident of 1695
In September 1695, Captain Henry Every, an English pirate on board the Fancy, reached the Straits of Bab-el-Mandeb, where he teamed up with five other pirate captains to attack the Indian fleet returning from the annual pilgrimage to Mecca. The Mughal convoy included the treasure-laden Ganj-i-Sawai, reported to be the greatest in the Mughal fleet and the largest ship operational in the Indian Ocean, and its escort, the Fateh Muhammed. They were spotted passing the straits en route to Surat. The pirates gave chase and caught up with the Fateh Muhammed some days later, and meeting little resistance, took some £40,000 of silver.
Every continued in pursuit and managed to overhaul Ganj-i-Sawai, which resisted strongly before eventually striking. Ganj-i-Sawai carried enormous wealth and, according to contemporary East India Company sources, was carrying a relative of the Grand Mughal, though there is no evidence to suggest that it was his daughter and her retinue. The loot from the Ganj-i-Sawai had a total value between £325,000 and £600,000, including 500,000 gold and silver pieces, and has become known as the richest ship ever taken by pirates.
When the news arrived in England, it caused an outcry. To appease Aurangzeb, the East India Company promised to pay all financial reparations, while Parliament declared the pirates hostis humani generis ("the enemy of humanity"). In mid-1696 the government issued a £500 bounty on Every's head and offered a free pardon to any informer who disclosed his whereabouts. The first worldwide manhunt in recorded history was underway.
The plunder of Aurangzeb's treasure ship had serious consequences for the English East India Company. The furious Mughal Emperor Aurangzeb ordered Sidi Yaqub and Nawab Daud Khan to attack and close four of the company's factories in India and imprison their officers, who were almost lynched by a mob of angry Mughals, blaming them for their countryman's depredations, and threatened to put an end to all English trading in India. To appease Emperor Aurangzeb and particularly his Grand Vizier Asad Khan, Parliament exempted Every from all of the Acts of Grace (pardons) and amnesties it would subsequently issue to other pirates.
The British began trading with China in 1699. This fact is recorded from the Chinese side in The Draft History of the Qing under the year Kangxi 37 (1698). The apparent discrepancy between the British and Chinese sources can be explained by the fact that Chinese New Year of 1699 did not fall until 31 January, so that any treaties entered into in January would have been logged under Kangxi 37 rather than Kangxi 38. In 1715 the Company established a permanent "factory" in Guangzhou (Canton).
The company started selling opium to Chinese merchants in the 1770s in exchange for goods like porcelain and tea, causing a series of opioid addiction outbreaks across China in 1820. The ruling Qing dynasty outlawed the opium trade in 1796 and 1800, but British merchants continued illegally nonetheless. The Qing took measures to prevent the East India Company from selling opium, and destroyed tens of thousands of chests of opium already in the country. This series of events led to the First Opium War in 1839, which involved a succession of British naval attacks along the Chinese coast over the course of several months. As part of the Treaty of Nanjing in 1842, the Qing were forced to give British merchants special treatment and the right to sell opium. The Chinese also ceded territory to the British, including the island of Hong Kong.
