English Factories in Early Colonial India

A factory in the seventeenth century was not an industrial manufacturing plant with machines. It was a fortified or unfortified commercial trading post, warehouse, and administrative office. The word derived from “factor,” which referred to the commercial agents who conducted business on behalf of the East India Company. These factories served as storage centers for imported British bullion and manufactured items, as well as collection points for Indian export goods like spices, indigo, calico, silk, and saltpetre. They provided residential quarters for company servants, board rooms for council meetings, and secure yards to protect merchant inventory. Over time, these commercial nodes transformed into bases for political expansion and military operations.

Initial Footprint on the Western Coast

Captain William Hawkins arrived at the court of Mughal Emperor Jahangir in 1608 to request permission to open a factory at Surat. Imperial objections and Portuguese resistance initially stalled this attempt. The naval victory of Captain Thomas Best over the Portuguese fleet at the Battle of Swally in 1612 changed Mughal attitudes. Emperor Jahangir issued an imperial farman in 1613 that allowed the English to establish their first permanent factory in Surat. Sir Thomas Roe arrived in 1615 as an official ambassador from King James I to Jahangir’s court. He stayed until 1619 and obtained imperial charters that allowed the English to set up trade posts across Western India. Under these grants, factories opened at Agra, Ahmedabad, and Broach (Bharuch). Surat functioned as the primary seat of the company’s Western Presidency during this early period. King Charles II received the island of Bombay from the Portuguese Crown in 1661 as part of the dowry for Catherine of Braganza. The British Crown transferred Bombay to the East India Company in 1668 for an annual rent of £10. The company fortified the port, developed its harbor, and shifted its western headquarters from Surat to Bombay in 1687.

Commercial Expansion across Southern India

The English established their first South Indian factory at Masulipatnam in 1611 under the patronage of the Sultanate of Golconda. This post targeted the export of local woven and dyed cotton fabrics to the East Indies. The company established a second factory on the Coromandel Coast at Armagaon in 1626 to escape trade disruptions at Masulipatnam. Francis Day, a factor at Armagaon, negotiated a land grant in 1639 from Damarla Venkatadri Nayaka, the ruler of Chandragiri. This grant allowed the English to construct Fort St. George at the coastal village of Madraspatnam. Fort St. George became the first fortified factory owned by the English in India and served as the administrative head of the Coromandel settlements.

Establishment in Eastern India and Bengal

The English expanded into eastern India by founding factories at Hariharpur and Balasore in Odisha in 1633. These locations supplied local textiles and raw materials. Sultan Shuja, the Governor of Bengal, issued a nishan in 1651 that permitted the English to establish a factory at Hooghly. This license allowed trade in Bengal in exchange for a fixed annual payment of ₹3,000. The English quickly built secondary factories at Kasimbazar, Patna, and Dacca to process raw silk, saltpetre, and opium. Hostilities between Mughal authorities and the company erupted in the late 1680s, leading to the temporary eviction of English merchants from Bengal. Job Charnock returned in 1690 and selected the village of Sutanuti as the site for a new factory. In 1698, the company purchased the zamindari rights of Sutanuti, Gobindapur, and Kalikata from the Sabarna Roy Choudhury family for ₹1,200. The fortified factory built on this site received the name Fort William in 1700, establishing the foundation of modern Kolkata.

Chronology of Early English Factories

Internal Hierarchy and Administrative Control

The operational structure inside early factories followed a strict commercial hierarchy. Junior employees joined as Writers at a young age, performing administrative clerical work for five years. They earned promotions to Factors, who managed trade logistics, inventory ledgers, and transactions with Indian brokers. Factors advanced to become Junior Merchants and then Senior Merchants. A President or Governor presided over the factory, assisted by a Council composed of the senior-most merchants. This council made decision on local trade policies, internal discipline, and diplomatic communication with local Indian rulers.

Key Historical Facts and Milestones

The earliest English voyages were funded through individual “Separate Voyages” where investors shared profits from a single expedition. The company transitioned to a “Joint Stock” system in 1612, pooling capital into a common treasury to support long-term factory operations. Indian merchants known as banyans or gumashtas acted as crucial intermediaries for English factors. These local agents brokered deals with rural weavers, arranged inland transport, and handled currency conversions at regional markets. The early factory system relied on royal farmans to operate. Emperor Farrukhsiyar issued the famous Farman of 1717, which granted duty-free trade rights to English factories in Bengal, Gujarat, and Hyderabad, along with the right to issue dastaks (customs passes) for goods in transit. Fortified factories like Fort St. George in Madras and Fort William in Calcutta established dual administrative zones. The enclosed European area was called the “White Town,” while the surrounding settlement inhabited by Indian weavers, merchants, and laborers was designated as the “Black Town.”