The British rise in India is the classic case of flag following the trade, an interpretation of foreign dominance in colonial times. It is duly noted that the foundations of British rule in India were laid between 1750 and 1784 by a trading firm known as the East India Company (EIC).
The aggressive military designs of the company were described as a reaction against the perceived political and military threat to its commercial position in India by the French after 1748 due to strategic changes occurring in far-off Western Europe where both these nations were inveterate competitors.
This brought about a sea-change in the perception and activities of EIC that focused primarily on trading activities since it landed in India 150 years before and tried to remain aloof from political changes happening around it and acted as peaceably and politically unobtrusively as possible.
The gradually increasing political turmoil in the subcontinent resulted in the downfall of the one mighty Mughal Empire and the increasing lawlessness made the EIC pursue an accommodating but robust defensive stance aimed solely at sustaining, with the agreement of the Indian authorities, a financially viable commercial operation on the subcontinent on the basis of very little political and military power and minuscule territorial possessions.
The trained military cadres of EIC proved a decisive tool possessing the potential to radically alter situations in an armed altercation. Quite obviously both well-entrenched trading European nations, Britain and France, had to choose sides of indigenous rulers who vied to gain dominance in the increasing political anarchy.
EIC was equally engaged in fighting their traditional rivals, the French, and it was only found possible by its policymakers after the company forces decisively defeated them in 1761 to devise an increasingly intrusive imperialist adventure in pursuit of greater security and revenues to finance trade through the extension of its political power.
This was primarily stimulated by attempts to stabilize and defend the Company’s new political status in India but it also derived from its local agents being unable to resist exploiting the opportunities that arose subsequently. Thereafter, until 1784, occasionally aided by the forces of the British Crown, a sometimes reluctant and usually unplanned but nonetheless aggressive, forward policy was pursued.
The changed circumstances facilitated the Company to more knowingly see India as a possible source of local wealth to pay for its exports to Britain but only by the assertion of substantial territorial control and political dominance over other princes, upheld by an increasingly powerful private army, four-fifths or more of whose recruits were Indian that by 1784 had become bigger than the peacetime British Army.
From a few under-manned and under-equipped garrisons scattered around the periphery of the subcontinent in 1750, the Company’s Presidency governments at Madras, Calcutta, and Bombay, thirty-four years later, had built up field forces capable of successfully taking on the major Indian armies and with the aid of squadrons of the Royal Navy and detachments of the British Army, began the process of becoming the new hegemon in succession to the declining Mughal Empire.
The gradual success of the EIC instilled in its servants a sense of profound political implications of this phenomenon and the opportunities it afforded some to get richer sooner than by engaging in private trade, to others of playing at politics and war on a grand scale, and to others, again, of the responsibilities the Company was taking on in the governance of millions of people from radically different cultures religions and races. The Company did not formally represent the state before 1784 but it was becoming obvious that since it was out on its own without any British Government support until the mid-eighteenth century, it was left with no alternative but to represent itself diplomatically with local Indian powers.
A few Company men in these years, particularly Robert Clive and Warren Hastings, drew a broader grand strategic conclusion from these developments. Having, in their struggles with the French, became entangled with the volatile Indian dynastic and interstate politics characteristic of the period, and has extended a significant degree of influence over them, they became convinced that the Company could not withdraw without imperiling its future existence in India.
The big question for the Company’s leadership then became where to draw the line on the expansion of its territorial power and, beyond that, how far, if at all, to try to extend its political influence into the interior of India. This issue was resolved by Robert Clive who was much more deliberate and clear-sighted in recognizing its implications for the future and the result was that he secured from the refugee Mughal Emperor, Shah Alam II, in return for resuming the customary annual tribute from Bengal–Bihar to the Empire of 2,600,000 rupees, an appointment of the Company as Imperial diwan of the provinces.
This made the Company master of all the province’s finances but not formally of its legitimate sovereign, an office still held by the Nawab of Bengal. Initially, Calcutta fulfilled its role indirectly through existing Mughal officers at provincial and local levels because it did not have sufficient expertise to become intimately involved in revenue administration but in 1772, the Company directors ordered its servants to take direct control of the collecting process. This development, backed by the Company’s army as the only effective military force in Bengal, marked the acquisition of institutionalized political power.
This development also marked a significant change in the Company’s previous financial policy of only soliciting land revenue grants from Indian rulers to cover the spiraling military and civil costs it claimed to have incurred on their behalf. Clive presented diwani as a process promising a permanent substantial supplement, considerably in excess of £1 million a year, to the Company’s earnings from trade.
It came at a time when the Company’s finances were strained from the costs of the recent war; and the situation soon got worse, almost bankrupting it, as shareholders beholding some of the Company’s servants returning home enriched by the sudden bounty that flowed briefly as a result of Clive’s triumph at Plassey (1757), forced the Directors to announce financially unjustified high dividends.
These developments suggested to some leading company servants (particularly Clive and Hastings), the notion that the Company’s political position in India had become tantamount to that of a territorial state, with the opportunity opening up before it even became the new dominant power in India.
The practical military possibility of conquering India had earlier been suggested as feasible on the basis of the Company’s experience in wars with and against local forces.
Now the EIC has tasted success and massive financial windfall but they remained skeptical about this possibility. However, the servants of the company were in the thick of things and had to respond to regularly changing situations.
They were regularly drawn into controversy and realized that their military superiority, as well as highly-developed governance principles, was more than adequate for dominating the entire subcontinent.
It took the company a century from 1784 to establish its rule over the subcontinent through a mixture of war and intricate alliances that catapulted them to rule over the vast territories of India as undisputed rulers. There is a universal agreement that the British ruled the subcontinent through the writ of law instead of personal whims.
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