2.1.1. 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.

In 1651, the East India Company established its first factory in India, which was essentially a trading post. This location was chosen strategically on the banks of the Hugli River to facilitate trade. The traders, called 'factors', were responsible for managing the operations of the factory. They stored goods in a warehouse and conducted business in offices there. As the Company began to grow and demand for its trade increased, it encouraged local merchants and traders to join them near the factory, creating a bustling hub for trade.

Think of the factory like a local marketplace today. When a new marketplace opens, many vendors might set up their shops near it to attract customers who come to that marketplace, making it a vibrant place for commerce.

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.

As trade from the factory flourished, the East India Company took steps to protect its interests. In 1696, it decided to build a fort around the settlement, which was vital for safeguarding their assets and merchants from potential threats. At this time, bribes to local Mughal officials allowed the Company to gain zamindari rights—essentially the right to collect taxes and revenues—from three surrounding villages, including Kalikata. This village eventually developed into Calcutta, a major city of trade and administration in India.

Imagine starting a small business. At first, you might just be selling from your home. But as your business grows, you might want to purchase a protective storefront and secure the surrounding area to keep your products safe. You might also negotiate with local authorities for rights to do business more smoothly, which parallels what the Company did.

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.

The East India Company was not satisfied with merely having established a trading base; it aimed to expand its advantages continuously. They leveraged existing privileges, such as a royal edict (farman) from Mughal Emperor Aurangzeb that allowed them to trade without paying duties—taxes on goods. However, the Company officials, engaged in private trading as well, began to exploit this privilege, which caused significant revenue loss for Bengal’s economy.

Think of it like a school club that has a special permission to use the gym for free. If the club starts using that privilege for personal events or businesses, it could upset the balance with other students who also want to use the gym and could lead to school authorities restricting access.

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.

In the early 1700s, tensions grew between the East India Company and the nawabs of Bengal, who were local rulers. The death of Aurangzeb in 1707 led to a power vacuum, allowing the nawabs to strengthen their control over Bengal. Unlike before, when they were subordinate to the emperors, they now sought to maintain their independence and resist the Company’s influence over trade and taxation, leading to significant conflicts.

Consider a group project in school where one member starts taking control and making decisions for everyone. Other group members, who initially went along with it, may start to feel assertive and demand an equal say, resulting in disagreements and conflicts within the team.

The conflicts led to confrontations and finally culminated in the famous 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.

All of these rising tensions erupted into armed conflict, notably the Battle of Plassey in 1757. Following the death of Nawab Alivardi Khan, Sirajuddaulah took over. The East India Company, fearing his assertive nature, attempted to influence Bengal politics by supporting rival claimants to his position. When this manipulation failed, it led to outright military conflict, marking a crucial turning point in British control in India.

Imagine a sports team where one player is incredibly skilled and the others fear being overshadowed. Instead of competing fairly, the team management might try to recruit a better player to take that popular player's place. When competitions heat up and tensions increase within the team, it can lead to a showdown, resulting in drastic changes in team dynamics.

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