East India Company – Foundation of Bombay

The foundation of Bombay (now Mumbai) as a major British settlement was a crucial event in the colonial history of India. What began as a small group of fishing villages on India’s western coast evolved into the headquarters of the British East India Company’s Western Presidency and eventually into one of the most important port cities in the world. The city’s transformation from a Portuguese possession to a British trading hub symbolises the growth of British maritime power and commercial dominance in India.

Background: The Rise of the East India Company

The East India Company, chartered in 1600 by Queen Elizabeth I, was a joint-stock trading company established to conduct trade with the East Indies and to compete with other European powers such as Portugal and the Netherlands. By the early seventeenth century, the Portuguese had established a strong presence along the western coast of India, with their key settlements at Goa, Daman, Diu, and Bombay (then known as “Bombaim”).
The British, seeking a foothold in western India, initially operated through Surat, where the Mughal Emperor Jahangir had granted them permission to trade in 1613. However, the limitations of Surat as a port and the vulnerability of the settlement to Mughal control prompted the Company to search for a more secure and strategically located harbour. The acquisition of Bombay provided precisely that opportunity.

The Portuguese Possession of Bombay

Before British control, Bombay was under the possession of the Portuguese, who had acquired the islands from the Sultan of Gujarat in 1534 through the Treaty of Bassein. The region then consisted of seven islands—Bombay, Mazagaon, Parel, Mahim, Worli, Colaba, and Old Woman’s Island (Little Colaba)—surrounded by creeks and tidal marshes. The Portuguese built forts and churches and encouraged missionary activities, but the area remained sparsely populated and economically underdeveloped.

The British Acquisition: Royal Dowry of 1661

The turning point came with the marriage of King Charles II of England to Catherine of Braganza, the Portuguese princess, in 1661. As part of her dowry, the Portuguese crown ceded Bombay to the British monarchy along with Tangier in North Africa. The transfer of Bombay was formally completed in 1665, although the British faced initial resistance from the Portuguese officials who were reluctant to hand over control.
Under the terms of the dowry treaty, the British were granted the islands of Bombay, along with rights to govern and collect revenues. However, the British Crown soon found the direct management of Bombay burdensome and unprofitable. Consequently, in 1668, King Charles II transferred the islands to the East India Company for an annual rent of £10 in gold.

Foundation of British Bombay

The East India Company recognised the strategic importance of Bombay immediately. Its natural deep-water harbour offered excellent anchorage, and its location on the western coast provided easy access to trade routes with Persia, Arabia, and East Africa. The Company shifted its Western Presidency headquarters from Surat to Bombay in 1687, making it the administrative and commercial centre for its operations on the western seaboard.
Under the administration of Gerald Aungier, who served as Governor of Bombay from 1669 to 1677, the foundations of modern Bombay were laid. Aungier introduced several reforms and development projects:

• Fortifications: Construction of the Bombay Fort to defend against Portuguese and local attacks.
• Population Growth: Encouragement of migration from Gujarat, the Konkan coast, and southern India by offering land, trade incentives, and religious freedom.
• Trade Expansion: Establishment of warehouses, shipbuilding yards, and trading posts to promote commerce.
• Civic Administration: Creation of law courts, a police system, and revenue offices to maintain order and governance.

These measures helped transform the seven islands into a thriving settlement and commercial hub. Bombay soon began to outshine Surat as the Company’s principal port on the western coast.

Development as a Commercial Hub

By the early eighteenth century, Bombay had become a centre for maritime trade and shipbuilding. The city’s shipyards produced vessels for the British Navy and the East India Company’s merchant fleet. Cotton textiles, silk, spices, opium, and salt were exported from Bombay, while European goods flowed into India through its harbour.
The establishment of the Bombay Marine (later the Royal Indian Navy) secured British maritime dominance in the Arabian Sea. The construction of docks, roads, and warehouses facilitated trade and settlement, and the growing presence of merchants, artisans, and financiers led to the rise of a cosmopolitan urban society.
Bombay also played a crucial role as a military and political base. Its strategic position allowed the British to expand influence over the Deccan and western India, providing a gateway for both commerce and control.

Social and Cultural Development

The British administration encouraged settlers from various communities—Hindus, Muslims, Parsis, Jews, and Christians—to settle in Bombay. This created a multi-ethnic and multi-religious society that became characteristic of the city’s later identity. The Parsis, in particular, emerged as prominent traders and shipbuilders, contributing greatly to the city’s economy.
By the late eighteenth century, the population had grown rapidly, and Bombay’s skyline was marked by forts, churches, and administrative buildings. English education, printing presses, and missionary institutions also began to spread, shaping the city’s intellectual and cultural life.

Political and Administrative Evolution

The East India Company governed Bombay as part of the Bombay Presidency, which included large parts of present-day Maharashtra, Gujarat, and Sindh. The city’s political importance grew steadily, especially after the Maratha wars (1775–1818), when British control extended deep into the Deccan. Bombay became a crucial centre for British power in western India, rivalled only by Calcutta in the east and Madras in the south.
The port continued to expand throughout the nineteenth century with the construction of new docks and railway links. The opening of the Suez Canal in 1869 further enhanced Bombay’s position as the primary gateway between India and Europe.

Legacy

The foundation of Bombay under the East India Company laid the groundwork for its evolution into a global metropolis. From a neglected cluster of islands, it became the administrative, military, and commercial heart of western British India. The port of Bombay eventually emerged as the chief centre for India’s trade in cotton and opium and later as a hub of industry and finance.
Even after the dissolution of the East India Company in 1858 and the transfer of power to the British Crown, Bombay retained its importance as the economic capital of colonial India. It became a crucible of Indian modernity—hosting early nationalist movements, educational institutions, and industrial enterprises.