Aurangzeb's farman, for instance, had granted only the Company the right to trade duty free. But officials. of the Company, who were carrying on private trade on the side, were expected to pay duty. This they refused to pay, causing an enormous loss of revenue for Bengal. How could the Nawab of Bengal, Murshid Quli Khan, not protest?
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n 1600, the East India Company acquired a charter from the ruler of England, Queen Elizabeth I, granting it the sole right to trade with the East, without competition from other British traders.
But that royal charter could not stop other European powers such as the Portuguese, Dutch, and French. And all those European companies wanted to buy the same things from India - fine qualities of cloth and spices.
As competition grew, profits fell, and the European trading companies started building forts and fighting each other.
With more business came more conflicts with Indian rulers, and it became difficult for the European traders to keep their business separate form Indian politics.
East India Company Begins Trade in Bengal
The first English factory was set up on the banks of the river Hugli in Bengal 1651. As their expanded, the East India Company convinced merchants and traders to come and settle near the factory.
By 1696, the Company began building a fort around the Hugli settlement. It also bribed Mughal officials into giving the Company Zamindari rights over three villages, one of which was Calcutta.
It also convinced the Mughal emperor Aurangzeb to issue a farman, an official order, granting the Company the right to trade duty-free.
The employees of the Company also carried on their private trades, and so were expected to pay duty. But they refused, which angered the Nawab of Bengal, Murshid Quli Khan, and led to fierce battles.
How Trade Led to Battles
After the death of Aurangzeb, the Nawabs of Bengal, Murshid Quli Khan, Alivardi Khan, and Siraj Ud Daulah, one after another, refused to grant concessions to the Company.
The 1757 Battle of Plassey
In 1757, Robert Clive led the Company’s army against Siraj Ud Daulah at Plassey. THe COmpany won, and the main reason for the defeat of the Nawab was that the forces led by Mir Jafar, one of his commanders, never fought the battle.
Clive had managed to secure the support of Mir Jafar by promising to make him nawab after crushing Siraj Ud Daulah. The battle of Plassey become famous because it was the first major victory the Company won in India.
But when Mir Jafar also could not prove himself a meek puppet ruler controlled by the British, the Company deposed him and installed Mir Qasim in his place.
And when Mir Qasim also complained, he was defeated in the Battle of Buxar in 1764, driven out of Bengal, and Mir Jafar was re-installed. But when Mir Jafar died the next year, in 1765, the Mughal emperor appointed the Company as the Diwan of the provinces of Bengal, and the Company now began to exploit the vast revenue resources of Bengal.
Company Officials Become “Naboobs”
After the Battle of Plassey, the original nawabs of Bengal were forced to give land and vast sums of money as personal gifts to Company officials.
This new money and power corrupted the Company's officials and servants, and they too began dreaming of living like nawabs; Britain was a poor country in those days, constantly fighting with its European neighbours, and most of the East India Company's staff came from very poor English homes.
So 'nabob' became an Anglo-Indian term for East India Company servants who became very rich through corrupt trade and other practices.
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