During the 17th century, the Dutch became the foremost maritime power of the world. In February, 1605 Steven van der Hagen, admiral of the Dutch East India Company (VOC), conquered the Portuguese fortress of Victoria at Amboyna, (present-day Maluku, Indonesia). The Dutch started taking over all the foreign trading interests at Victoria. They tried to obtain a local monopsony in the spice trade and tried to keep the other European factors out by use of force. This was strife for the British East India Company. The bitterness of the trading companies was turned into the bitterness between the James I of England and the Dutch States-General.
- The two governments had signed a Treaty of Defense in London in 1619 which enshrined the cooperation between the two companies in East Indies.
- Accordingly the market of spices was divided between the two in fixed proportions.
Despite this treaty, the relations between the two companies remained tense. In 1623 one of the soldiers of British (who was Japanese) was caught spying which led to arrest of the British, their torture and a massacre by the officials of the Dutch East India Company. Out of the 20 men killed 10 were the servants of the British East India Company.
- The result of this massacre was that British were forced to retire from the eastern archipelago and focus on continent of India.
This massacre changed the fate of India as well Indonesia. In Indonesia, Dutch remained a power for long but in India, the event indirectly led to the foundation of British Empire.
- In Indonesia, the Dutch ruled without a rival, and expelled the Portuguese from almost all their territorial possessions. Only relics of the Portuguese empire were left in Island of Timor.