East India Company – Transfer of Bombay and Ventures in Bengal

The East India Company, a powerful trading corporation established in 1600 under a charter from Queen Elizabeth I, played a decisive role in shaping the history of the Indian subcontinent. Initially formed to conduct trade with the East Indies, the Company gradually expanded its influence across India, transforming from a commercial enterprise into a colonial power. Two critical developments in its early history were the transfer of Bombay to the Company and its ventures in Bengal, both of which laid the groundwork for British political and economic dominance in India.

The Transfer of Bombay to the East India Company

The transfer of Bombay (now Mumbai) to the East India Company was a significant event in the seventeenth century that strengthened the Company’s presence on the western coast of India.
The origins of British control over Bombay can be traced to the marriage alliance between King Charles II of England and Catherine of Braganza, the Portuguese princess, in 1661. As part of the marriage treaty, the islands of Bombay were ceded by Portugal to England as part of Catherine’s dowry.
Initially, the English Crown assumed direct control of the territory, but the administration of Bombay proved to be costly and inefficient. Recognising the commercial potential of the region, King Charles II decided to lease the islands to the East India Company in 1668 for a nominal annual rent of £10 in gold.
Under Company administration, Bombay quickly developed from a cluster of seven islands into a flourishing trading and naval base. The Company established warehouses, fortifications, and a secure harbour, transforming the region into a major centre of maritime commerce. Its strategic location along the Arabian Sea offered access to trade routes with Persia, Arabia, and Africa, giving the Company a strong foothold in western India.
The Company encouraged settlement by merchants, artisans, and Indian traders, leading to the gradual growth of the city of Bombay as a cosmopolitan commercial hub. In 1687, the Company even made Bombay its headquarters, transferring its western operations from Surat, though this was later reversed due to administrative difficulties. Nonetheless, the acquisition of Bombay was pivotal in strengthening British maritime influence in India and establishing a durable base for trade and defence.

Early Ventures in Bengal

While the Company’s initial centres of activity were on the western coast (Surat) and the east coast (Madras), Bengal soon emerged as a crucial region for British trade and influence. The Company’s ventures in Bengal began in the early seventeenth century and gradually expanded into full political control by the mid-eighteenth century.
1. Early Trade in BengalThe East India Company’s first commercial contacts with Bengal were established during the reign of Mughal Emperor Jahangir. In 1612, the Company obtained permission to trade at Surat, and in 1633, it secured farman (royal permission) from Emperor Shah Jahan, allowing it to trade freely in Bengal, Orissa, and Bihar.
The Company’s early trade in Bengal was managed from Hughli, a port near the Ganges River. By the mid-seventeenth century, Bengal had become one of the most prosperous provinces of the Mughal Empire, famous for its silk, cotton textiles, indigo, saltpetre, and sugar. Recognising the economic potential, the Company sought a more permanent establishment.
2. Establishment of FactoriesIn 1651, the East India Company obtained permission from Shah Shuja, the Mughal Subahdar (Governor) of Bengal, to establish a trading post at Hughli, where it built warehouses and trading facilities. Later, the Company opened additional factories at Kasim Bazar, Patna, and Dacca (Dhaka). These factories facilitated the export of textiles and raw materials to Europe and other parts of Asia.
3. The Foundation of CalcuttaA major turning point came in 1690, when Job Charnock, an agent of the East India Company, founded a new settlement at the village of Sutanuti on the eastern bank of the River Hooghly. This site, along with the adjoining villages of Govindpur and Kalikata, became the nucleus of the city of Calcutta (Kolkata).
In 1698, the Company purchased these villages from the local zamindar under the permission of Prince Azim-ush-Shan, the grandson of Emperor Aurangzeb and the Mughal governor of Bengal. The construction of Fort William soon followed, providing a fortified base for British trade and residence. By the early eighteenth century, Calcutta had grown into the most important British settlement in eastern India, rivalled only by Madras and Bombay.

Conflict and Consolidation in Bengal

As the Company’s commercial presence expanded, its ambitions also grew. Bengal’s immense wealth and political significance made it the focal point of British interests. However, the growing influence of the Company soon brought it into conflict with the local rulers.
Under the Mughals, Bengal enjoyed semi-autonomous status under powerful Nawabs such as Murshid Quli Khan and Alivardi Khan. These rulers sought to restrict the Company’s privileges and impose duties on trade. Tensions escalated when the Company began fortifying its settlements without the Nawab’s permission, citing French rivalry as the reason.
The situation reached a crisis under Siraj-ud-Daulah, the last independent Nawab of Bengal. His attack on Fort William in Calcutta in 1756, known as the Siege of Calcutta, prompted a British military response led by Robert Clive. The ensuing Battle of Plassey (1757) marked a decisive British victory, resulting in the establishment of political control over Bengal.

Economic Importance of Bengal

Bengal was considered the “richest province” of the Mughal Empire due to its fertile lands, advanced agriculture, and thriving industries. The region was a global exporter of high-quality textiles such as muslin and silk, and its ports were vital for international commerce. Control over Bengal provided the East India Company with vast revenues, enabling it to finance military operations and expand influence over other Indian territories.
Following the Battle of Buxar (1764) and the Treaty of Allahabad (1765), the Mughal Emperor Shah Alam II granted the Company the Diwani rights — the right to collect revenue from Bengal, Bihar, and Orissa. This officially marked the beginning of British political rule in India and the transformation of the East India Company from a trading organisation into a sovereign power.

Significance of the Transfer of Bombay and Ventures in Bengal

The acquisition of Bombay and the ventures in Bengal represent two key phases in the evolution of British power in India:

• Strategic Expansion: The transfer of Bombay gave the Company a secure base on the west coast, strengthening maritime trade and defence.
• Economic Consolidation: The ventures in Bengal enabled access to one of the most productive regions in Asia, fuelling Britain’s industrial and commercial growth.
• Political Transformation: Success in Bengal marked the Company’s transition from merchant enterprise to territorial ruler, laying the foundation for the later British Raj.
• Cultural and Urban Development: Both Bombay and Calcutta emerged as major urban centres, blending Indian and European influences in administration, architecture, and trade.