European Commercial Interest in India

European powers turned toward India in the late fifteenth century to establish direct sea routes for trade. High demand for Indian spices, textiles, and commodities in Europe drove intense commercial rivalry among European trading companies.

The Portuguese

Portugal was the first European nation to reach India by the sea route. Vasco da Gama arrived at Calicut in May 1498 with the assistance of an Arab navigator named Abdul Majid. King Zamorin of Calicut welcomed Vasco da Gama, granting initial trading privileges.

Commercial Strategy and Trade Network

• The Portuguese established the Estado da Índia to manage their Asian maritime empire.
• Francisco de Almeida introduced the Blue Water Policy to secure naval mastery over the Indian Ocean rather than expanding land territories.
• Afonso de Albuquerque captured Goa from the Sultan of Bijapur in 1510, turning Goa into the territorial seat of Portuguese power in India.
• The Portuguese created the Cartaz system, requiring all Asian merchant ships to purchase naval passes to trade in the Indian Ocean.
• Trade focused heavily on black pepper, cinnamon, cardamom, silk, and precious metals.

The Dutch

The Dutch East India Company (Vereenigde Oostindische Compagnie or VOC) received its charter from the Dutch Parliament in 1602. The charter granted the VOC a monopoly over trade in the East Indies alongside powers to wage war, build forts, and conclude treaties.

Key Centers and Trade Pattern

• The Dutch opened their first factory in India at Masulipatnam in 1605.
• Other primary trading centers included Pulicat, Surat, Chinsurah, Kasimbazar, Patna, Balasore, Nagapattinam, and Cochin.
• Unlike the Portuguese who prioritized spices, the Dutch emphasized Indian cotton textiles as trade goods for the Spice Islands (Indonesia).
• Pulicat served as the main Dutch headquarters until 1690, after which Nagapattinam replaced it.
• In 1759, British forces defeated the Dutch in the Battle of Bedara (Chinsurah), ending Dutch commercial dominance in India.

The English

Queen Elizabeth I granted a royal charter to “The Governor and Company of Merchants of London Trading into the East Indies” on December 31, 1600. The charter awarded exclusive trading privileges in the East Indies for fifteen years.

Commercial Expansion and Royal Grants

• Captain William Hawkins visited the court of Mughal Emperor Jahangir in 1608 to request permission to open a factory at Surat.
• Jahangir issued a royal farman in 1613 allowing the English to set up their first permanent factory at Surat.
• Sir Thomas Roe served as an ambassador from King James I to Jahangir’s court from 1615 to 1619, securing rights to establish factories across the Mughal Empire.
• The company acquired Madras in 1639 from the Raja of Chandragiri and constructed Fort St. George.
• King Charles II transferred Bombay to the English East India Company in 1668 for an annual rent of £10 after receiving it as part of his Portuguese dowry.
• Job Charnock founded Calcutta in 1690 by acquiring the zamindari rights of Sutanuti, Gobindapur, and Kalikata, where Fort William was built.
• Emperor Farrukhsiyar issued a royal farman in 1717 granting duty-free trade rights (dastaks) to the company in Bengal, Gujarat, and Hyderabad.

The French

The French East India Company (Compagnie des Indes Orientales) was founded in 1664 under the initiative of Finance Minister Jean-Baptiste Colbert during the reign of King Louis XIV.

Trade Settlements and Anglo-French Rivalry

• The French set up their first Indian factory at Surat in 1668 under François Caron.
• A second French factory opened at Masulipatnam in 1669.
• François Martin established Pondicherry in 1673 after acquiring land from the Governor of Valikondapuram.
• The French acquired Chandernagore near Calcutta from the Governor of Bengal in 1690.
• Under Joseph François Dupleix, the company shifted focus from pure commerce to territorial intervention, leading to three Carnatic Wars with the British between 1746 and 1763.

The Danes

The Danish East India Company was formed in 1616. Although a minor participant compared to the British or French, the Danish presence remained steadily active in trade and missionary work.

Key Settlements

• The Danish established their first trading post at Tranquebar (Thanjavur district, Tamil Nadu) in 1620.
• They established Serampore in Bengal in 1755, which became their principal headquarters in India.
• The Danish sold all their Indian settlements to the British East India Company in 1845.

Comparison of European Trading Companies

The table below outlines the core attributes of the major European trading enterprises in India.

Major Commodities of Trade

European traders extracted specific agricultural and manufactured products from distinct regions across the Indian subcontinent.

Key Export Goods

• Pepper and Spices: Sourced mainly from the Malabar coast (Cochin, Calicut, and Cannanore).
• Cotton Textiles: Calico and muslin cloth were sourced from Bengal, the Coromandel coast, and Gujarat.
• Saltpetre: Essential for manufacturing gunpowder, sourced predominantly from Bihar (Patna).
• Indigo: A blue dye cultivated extensively in Gujarat (Sarkhej) and Agra (Bayana).
• Raw Silk: Produced in large quantities in Bengal (Kasimbazar).
• Opium: Cultivated in Bihar and Malwa for export to China.

Key Historical Facts

The Portuguese introduced several agricultural crops to India, including tobacco, cashew nuts, pineapples, red chillies, and potatoes. They also established the first printing press in India at Goa in 1556, publishing the first printed book on medical plants in 1563. The English Farman of 1717, often called the Magna Carta of the East India Company, exempted the company’s export and import goods from trade duties in Bengal for an annual payment of 3,000 rupees. It also permitted the company to issue dastaks (trade permits) for custom-free movement of goods. Serampore in Bengal emerged as a prominent hub for printing and education under Danish patronage. The Serampore Mission Press, founded by William Carey and his associates in 1800, published translations of various texts into regional Indian languages. The Dutch developed an extensive system of internal trade credit in India through partnerships with native merchant bankers (shroffs), utilizing local currency networks to finance purchases of raw silk and saltpetre.