Question

How assumption of Diwani benefited the East India Company?

Answer 1

On being appointed the Diwan of the provinces of Bengal, the East India Company acquired greater power and authority. It was free to make use of the vast resources of Bengal. Till then, in order to buy goods, it had to import gold and silver from Britain. After the assumption of the Diwani, the Company could use the revenues from Bengal to finance its expenses (which included purchasing cotton and silk textiles in India, maintaining its troops, and building the Company fort and offices at Calcutta).

Answer 2

In 1765, the Mughal emperor appointed the Company as the Diwan of the provinces of Bengal. The Diwani right to the East India Company benefited it in several ways:

The Diwani allowed the Company to use the vast revenue resources of Bengal.

Trade was monopolised by the East India Company. The company began direct plunder of India’s wealth.

The Company expenses were being financed from the Revenues of India. These revenues were used to purchase cotton and silk textiles in India, maintain Company troops, and meet the cost of building the Company fort and offices at Calcutta.

To monopolize trade & dictate terms. The company used its political power. They could impose their own prices that had no relation to the costs of production.

The company used revenue of Bengal to finance exports of Indian goods.