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European Trading Companies In India

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  • The discovery of the new sea route by Vasco da Gama led to a rivalry among the European powers to establish trade with the East.
  • Fierce competition to control trade with India resulted in bitter trade wars between the British, the Dutch, the Portuguese, and the French companies.
  • All the European trading companies were interested in buying the things which were in great demand in Europe such as, fine quality silk, cotton, pepper, cloves, cinnamon, cardamom, etc.
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Voyages of discovery

  • India has a flourishing trade with Europe both through the land and sea route. India’s cotton and spices were in great demand at that time in Europe.
  • In 1453, Turks took over the eastern roman empire and prevented the traders to carry goods to Europe through land and sea routes.
  • Since the traditional route was blocked, the Europeans started searching the new routes.
  • In 1498, Vasco da Gama, a Portuguese explorer discovered a new ocean route from Portugal to the East.
  • He arrived at the coast of Calicut. 

The Portuguese

  • The first European to arrive in India were Portuguese. They were the first to set up their trading post in India. With their improved ships and use of force, they drove the Arab traders away from Indian markets.
  • Vasco da Gama was the first person who discovered a new route. They set up their trading centers in Calicut, Cochin, Goa, Diu, Daman, Bassein, and Salsette.
  • The Portuguese traders made a huge amount of profit from their trade with India. The large potential of profit in trade with India soon attracted the Dutch, and later the British, and the French to India.

The Dutch

  • The Dutch East India Company was formed in 1602, with the purpose of lucrative trade of spices with India and the East.
  • The Dutch established their factories in Masulipatnam, Surat, and Cochin.
  • They exported Indigo, Cotton, and silk from India.
European Companies
William Hawkins in the Mughal Darbar
  • A group of businessmen in England formed The East India Company in 1600 and acquired a charter from Queen Elizabeth1 –  The ruler of England at that time, which granted the company the sole right to trade with India in return for a share of profit.
  • According to the charter, no other trading group in England was allowed to compete with the East India Company. Thus, the company did not have the fear of competition from any other trading company in England. However, the royal charter could not stop other European powers from entering the Indian markets.
  • In 1608, Captain William Hawkins was sent to the Mughal emperor Jahangir to seek permission to set up trading posts in India. Jahangir issued a Farman permitting him to set up factories and ports at Surat, Goga, and Cambay. Surat soon became the headquarters of East India Company in India.

The French

  • The last European power who enter India was the French. They formed their trading company in 1664. They set up trading centers at Surat,  Masulipatnam, Chandranagore, and Mahe.
  • In 1668, the first French factory came into existence at Surat. In 1674, they founded Pondicherry, which later became their capital.
  • Their common languages were French, Tamil, Telugu, English, Bengali, Malayalam, etc.

Trade Wars

  • Competition among the European companies pushed the purchase prices of goods and the profit thus reduced as a result these European companies started trade wars to eliminate their rivals from the Indian Markets.
  • Throughout the 17th and 18th centuries, European trading companies adopted various methods for control of trade.
  • They regularly sank each other’s ships, blocked trading routes, etc. Traders started fortifications around their trading posts and carried arms to protect them.
  • Their efforts to fortify their settlements and carry on profitable trade also resulted in conflicts with the local rulers of India. The company found it difficult to separate trade from politics.
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From Traders to Rulers-

  • Initially, the East India Company only wanted to get rights from the Indian rulers to trade. Their aim was only to expand their trade leaving the administration of territories to puppet rulers,  but soon they changed their aim to establish their dominance by occupying territories from the Indian rulers.

Anglo-French Rivalry

  • Clash of trade interest between Britain and France led to a series of wars, known as the Carnatic wars.
  • The British and France fought three battles in the Carnatic wars now Tamil Nadu. The rulers of Hyderabad, Carnatic and Mysore were in conflict with each other.
  • Taking advantage of their conflicts, the French and the British allied with the rival groups and fought three wars from 1744-1763 at Carnatic.
  • The Carnatic war ended with the defeat of the French and left only with Pondicherry and Chandranagore.
  • The French were not allowed to fortify their own territories. After this the British clear their way to establishing their dominance in India.
  • After winning the Carnatic wars, the British focused their attention on conquering the Bengal because of its rich wealth in raw material, silk, and textile.
  • In the early 18th century, Siraj-ud-daulah the Nawab of Bengal refused to grant the company concessions.
  • He stopped the company from fortifications and denied it the right to issue coins.
  • The situation intensified the conflict between the company and the Nawab of Bengal. This leads to frequent clashes famous as The Battle of Plassey.


  • Due to the rich wealth of India European Companies attracted towards it but soon they started creating their dominance because of the weakness of Indian rulers, absence of strong central leadership, lack of unity,  and superior army and navy of the European companies.

Answer the following Questions

Question 1-  What methods were adopted by the European trading companies for the control over trade?

Question 2- What do you understand by Trade Wars?

Question 3- What is Farman?

Question 4- What are the main centers of British East India Company’s trade?

Question 5- Who was the first British officer who went to the Mughal Emperor Jahangir to seek permission to set up trade in India?

Question 6- In which year the British started their trade in India?

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