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From Trade to Territory
Start here: why this chapter matters
This is Chapter 2 of Our Pasts – III. It answers the question the book’s title page implies: how did a small trading company, which NCERT says was at first reluctant to acquire territory, become master of a vast empire within a century? The story runs from the charter of 1600 through the Bengal crisis of Plassey (1757), Buxar (1764) and the Diwani (1765), to the expansion of 1757–1857 by alliances, wars and annexations, and ends with the new administration and army the Company built. Throughout, NCERT asks you to see the process from more than one side — the nawabs’ complaints as well as the Company’s, Tipu’s legend as well as British paintings of triumph.
- Links within this book: hess201 (how British histories organised this period by Governor-Generals; Mill, who appears again in Source 4); hess203 (Ruling the Countryside — what the Company did with the Diwani: the Permanent Settlement and indigo); hess205 (When People Revolt — 1857, for which this chapter’s annexations, Awadh and the sepoy army are the background); hess206 (the Orientalists and the law digests).
- Live pages to pair with: lehs301 (Class 12, Colonialism and the Countryside — the Permanent Settlement of 1793 in Bengal and the Fifth Report); lehs302 (Rebels and the Raj — the subsidiary alliance and the annexation of Awadh in depth, as causes of 1857); keec101 (the colonial economy and the drain of wealth that began with the Bengal revenues); jess304 (Class 10, The Age of Industrialisation — the Company’s control over Indian weavers).
- UPSC: Modern Indian history is among the most heavily tested parts of Prelims and GS1, and the 1757–1857 expansion is a steady Prelims topic: Plassey and Buxar, Clive and the Diwani, the subsidiary alliance (1985, 1994, 2018), the Doctrine of Lapse (1982, 1992), the Mysore and Maratha wars (1999, 2004), Awadh (2007), the first Governor-Generals (2005, 2007). Mains has asked about the fragmented polity of the mid-eighteenth century (2017) and why the Company’s armies won (2022). This foundational chapter gives the base; lehs301–302 add depth.
| Word | What it means here |
|---|---|
| Mercantile | A business that profits mainly through trade — buying cheap and selling dear (NCERT) |
| Charter | A royal grant of rights — here, the sole English right to trade with the East (1600) |
| Factory; factor | A trading post with warehouse and offices; the Company’s traders who worked there |
| Farman | A royal edict or order |
| Subadar | A Mughal provincial governor |
| Nawab; nizamat | Governor of a province such as Bengal or Awadh; his executive and judicial authority |
| Diwan; Diwani | The chief revenue officer of a Mughal province; the right to collect its land revenue |
| Puppet | A ruler controlled by someone else (NCERT) |
| Nabob | Anglicised ‘nawab’: a Company servant who returned rich and flaunted it |
| Resident | A Company agent posted at an Indian court to serve its interests |
| Subsidiary alliance | A treaty under which a ruler kept no army of his own and paid for Company troops |
| Paramountcy | The Company’s claim that its authority was supreme over Indian states |
| Doctrine of Lapse | Dalhousie’s rule that a state whose ruler died without a natural male heir passed to the Company |
| Confederacy | An alliance — here, of Maratha chiefs under the Peshwa |
| Presidency | A British administrative unit: Bengal, Madras or Bombay, each under a Governor |
| Diwani adalat; faujdari adalat | District civil court; district criminal court |
| Qazi; mufti | A judge; a Muslim jurist who expounded the law the qazi applied |
| Impeachment | A trial by the House of Lords on charges brought by the House of Commons |
| Sepoy; sawar | Soldier (from sipahi); a cavalryman |
At a glance — the six ideas to carry away
- 1707: Aurangzeb dies → regional kingdoms. 1600: Elizabeth I’s charter gives the Company a monopoly of English eastern trade; Portuguese (Vasco da Gama, 1498; Goa), Dutch and French compete → trade with arms.
- Bengal: factory on the Hugli (1651), fort (1696), Kalikata zamindari (1698), duty-free farman; officials’ private trade, forts and meddling anger nawabs Murshid Quli Khan → Alivardi Khan → Sirajuddaulah.
- Plassey (1757, Clive; Mir Jafar’s betrayal) → puppet nawabs → Buxar (1764) → Diwani (1765): Bengal’s revenue pays for exports, troops and forts. Company servants become ‘nabobs’.
- Methods: Residents; subsidiary alliance (Wellesley 1798–1805; Awadh cedes half, 1801); paramountcy (Lord Hastings 1813–23); Doctrine of Lapse (Dalhousie 1848–56: Satara, Sambalpur, Udaipur, Nagpur, Jhansi); Awadh 1856 for ‘misgovernment’.
- Wars: Mysore (1767–69, 1780–84, 1790–92, 1799 — Tipu killed); Marathas (Salbai 1782; 1803–05; 1817–18); Afghanistan 1838–42; Sind 1843; Punjab 1849. Resistance: Rani Channamma, Rayanna (Kittur).
- Administration: Warren Hastings — three Presidencies; diwani and faujdari adalats (1772); Hindu law digest (1775); Supreme Court (Regulating Act 1773); the Collector; impeachment (Burke). Sepoy army with European drill. By 1857: direct rule over ~63% of territory, 78% of people.
1. The eighteenth-century setting: from Mughal centre to regional kingdoms
Aurangzeb was the last powerful Mughal ruler; he controlled a very large part of the subcontinent. After his death in 1707, many Mughal governors (subadars) and big zamindars began asserting their authority and founding regional kingdoms — Bengal, Awadh and Hyderabad among them, alongside the Marathas, the Sikhs and Mysore. Delhi could no longer function as an effective centre. Yet, NCERT notes, Mughal emperors remained symbolically important. By the second half of the eighteenth century a new power was rising: the British, who had come as a small trading company.
- An older view, associated with Jadunath Sarkar’s Fall of the Mughal Empire (1932–50), saw the eighteenth century as a ‘dark age’ of decline and disorder that let the British in.
- From the 1980s, historians such as Muzaffar Alam (The Crisis of Empire in Mughal North India, 1986), Richard Barnett (on Awadh, 1980) and C.A. Bayly (Rulers, Townsmen and Bazaars, 1983) argued that Mughal decline at the centre went with economic and political vitality in the regions — new states, prosperous towns, banking and merchant networks.
- Others reply that regional prosperity was uneven, that warfare and revenue pressure were real, and that Maratha and Afghan campaigns disrupted large areas. UPSC Mains 2017 asked how mid-eighteenth-century India was ‘beset with the spectre of a fragmented polity’ — a good answer presents both readings.
2. The Company comes east and begins trade in Bengal
In 1600 the East India Company obtained a charter from Queen Elizabeth I giving it the sole right to trade with the East: no other English trading group could compete. It could sail the oceans to buy goods cheaply and sell them dearer in Europe. Such mercantile companies made profit chiefly by excluding competition. But the charter could not keep out other European powers. By the time English ships rounded the Cape of Good Hope, the Portuguese were established on India’s west coast with their base at Goa — Vasco da Gama had reached India by this sea route in 1498. By the early seventeenth century the Dutch were exploring Indian Ocean trade, and soon the French arrived.
All the companies wanted the same things: India’s fine cotton and silk, and pepper, cloves, cardamom and cinnamon. Competition pushed up purchase prices and cut profits, so the only way to flourish was to eliminate rivals. Through the seventeenth and eighteenth centuries the companies sank each other’s ships, blockaded routes and stopped rival supplies. Trade was carried on with arms and trading posts were fortified — which led to conflict with local rulers. The Company found it hard to separate trade from politics.
In Bengal, the first English factory was set up on the banks of the Hugli in 1651. Its traders, called factors, worked from a warehouse and offices, and the Company persuaded merchants to settle nearby. By 1696 it began building a fort around the settlement; two years later it bribed Mughal officials into granting it zamindari rights over three villages, one of them Kalikata, which grew into Calcutta (Kolkata). It also obtained a farman granting the Company the right to trade duty free. It then pressed for more concessions and manipulated existing ones: the farman covered only the Company, but its officials, who carried on private trade on the side, refused to pay duty — a huge loss of revenue for Bengal. ‘How could the Nawab of Bengal, Murshid Quli Khan, not protest?’, NCERT asks.
- The Hugli factory (1651) was the first English factory in Bengal, not in India. The English set up a factory at Masulipatnam in 1611, and their first permanent factory at Surat in 1613, during Jahangir’s reign (Beyond NCERT; UPSC 2006, 2008). Madras (Fort St George) dates from 1639–40, and Bombay passed to the Company in 1668.
- The duty-free privilege the exam books stress is the farman of Farrukhsiyar, 1717 — often called the Company’s ‘Magna Carta’ — which let it trade in Bengal without duties on a payment of Rs 3,000 a year and issue passes (dastaks). Under Aurangzeb, an arrangement of 1691 had already allowed duty-free trade in Bengal for that annual sum. NCERT’s ‘Aurangzeb … farman’ compresses this. Safe line: ‘a Mughal grant of duty-free trade, confirmed by Farrukhsiyar’s farman of 1717; the misuse of dastaks for officials’ private trade caused conflict’.
- Calcutta was founded by Job Charnock in 1690; the fort became Fort William (Beyond NCERT).
- Vasco da Gama was the first European to reach India by sea round Africa (Calicut, May 1498); the ocean route across the Arabian Sea was long known to Asian and African sailors, and he was guided from Malindi by a local pilot. NCERT’s ‘discovered’ is a European-centred word.
- Portuguese: Vasco da Gama reached Calicut in 1498; Albuquerque took Goa in 1510.
- Dutch: the Dutch East India Company (VOC) was founded in 1602; it concentrated on the spice islands of Indonesia, with factories in India on both coasts.
- French: their company was formed in 1664; Pondicherry became its base. The Anglo-French Carnatic Wars (1740s–1760s) ended with the French defeat at Wandiwash (1760); Dupleix had pioneered intervening in Indian succession disputes with European-trained troops — a method the English copied.
- The Danes traded from Tranquebar and Serampore. None of these rivals appears much in NCERT’s chapter; Prelims sometimes asks about them.
3. Plassey, Buxar and the Diwani, 1756–1765
Through the early eighteenth century, conflict between the Company and the nawabs of Bengal intensified. After Aurangzeb, the Bengal nawabs asserted their autonomy like other regional powers. Murshid Quli Khan, then Alivardi Khan and then Sirajuddaulah were each strong rulers: they refused the Company concessions, demanded large tributes for its right to trade, denied it any right to mint coins, and stopped it extending its fortifications. They accused it of deceit — depriving Bengal of revenue, undermining the nawab, refusing taxes, writing disrespectful letters. The Company replied that local officials’ unjust demands were ruining its trade, which could flourish only if duties were removed, and that it had to enlarge its settlements, buy villages and rebuild forts.
When Alivardi Khan died in 1756, Sirajuddaulah became nawab. Worried about his power, the Company wanted a puppet ruler who would grant concessions, and tried, unsuccessfully, to help one of his rivals take the throne. The angry nawab told it to stop meddling, stop fortifying and pay the revenues. When talks failed he marched with 30,000 soldiers to the English factory at Kassimbazar, captured the officials, locked the warehouse, disarmed the Englishmen and blockaded their ships; then he marched on Calcutta and took the Company’s fort. Company officials at Madras sent forces under Robert Clive, backed by naval fleets. After prolonged negotiations, in 1757 Clive led the Company’s army against Sirajuddaulah at Plassey. A main reason for the nawab’s defeat was that the forces of Mir Jafar, one of his commanders, never fought: Clive had won him over by promising to make him nawab. Plassey became famous as the Company’s first major victory in India.
After Plassey, Sirajuddaulah was assassinated and Mir Jafar made nawab. The Company was still unwilling to take on administration; its aim was to expand trade, and if local rulers would grant privileges, territory need not be taken directly. But even puppet nawabs had to keep up an appearance of dignity before their subjects. When Mir Jafar protested, the Company deposed him and installed Mir Qasim; when Mir Qasim complained, he was defeated in a battle at Buxar (1764), driven out of Bengal, and Mir Jafar reinstalled (see the trap below for the order). The nawab had to pay Rs 5,00,000 a month, but the Company wanted still more money for its wars, trade and expenses — more territory and more revenue. By the time Mir Jafar died in 1765, Clive declared: ‘We must indeed become nawabs ourselves’.
In 1765 the Mughal emperor appointed the Company Diwan of the provinces of Bengal. The Diwani gave it the use of Bengal’s vast revenue. This solved an old problem: as its trade grew from the early eighteenth century, the Company had paid for Indian goods with gold and silver imported from Britain, which then had no goods to sell in India. The outflow of gold slowed after Plassey and stopped entirely after the Diwani. Indian revenues now bought cotton and silk textiles, maintained Company troops and paid for the fort and offices at Calcutta.
- Plassey: 23 June 1757 — Clive against Sirajuddaulah (Mir Jafar, Rai Durlabh and the banker Jagat Seth in the conspiracy; Beyond NCERT names).
- NCERT’s order — Mir Qasim ‘defeated in a battle fought at Buxar (1764), driven out of Bengal, and Mir Jafar was reinstalled’ — compresses events. Mir Qasim was beaten in a series of battles in 1763 and Mir Jafar was restored in 1763; Buxar (22–23 October 1764) was fought by Major Hector Munro against the combined armies of Mir Qasim, Shuja-ud-daula of Awadh and the Mughal emperor Shah Alam II (Beyond NCERT). Safe line: ‘at Buxar the Company defeated Mir Qasim, the Nawab of Awadh and Shah Alam II’.
- Diwani: 12 August 1765, by Shah Alam II in the Treaty of Allahabad, for Bengal, Bihar and Orissa, in return for an annual tribute of Rs 26 lakh (Beyond NCERT). The nawab kept the nizamat — the ‘dual government’ of 1765–72, ended by Warren Hastings in 1772.
- Plassey made the Company kingmaker; Buxar is often called the more decisive battle, because it defeated the Mughal emperor and Awadh as well.
- J.R. Seeley (The Expansion of England, 1883) famously said the British seemed to have conquered half the world ‘in a fit of absence of mind’ — empire as an unplanned by-product of trade and defence.
- P.J. Marshall (Bengal: The British Bridgehead, 1987) and others stress the ‘men on the spot’: private traders and officials in Bengal, pursuing profit and security, drove events that London often disliked — the distrust NCERT mentions.
- C.A. Bayly (Indian Society and the Making of the British Empire, 1988) emphasised Indian collaborators — bankers such as the Jagat Seths, merchants and revenue-farmers — who saw advantage in Company power.
- Nationalist historians from R.C. Dutt (The Economic History of India, 1902) and Marxist historians such as Irfan Habib stress deliberate economic exploitation: Plassey opened the way to tribute and drain. Sushil Chaudhury (The Prelude to Empire, 2000) argued that English private-trade interests drove the conspiracy of 1757, against views that put the crisis inside the Bengal court. Popular writers such as William Dalrymple (The Anarchy, 2019) stress corporate violence. Attribute each; NCERT’s own account mixes ‘reluctance’ at first with growing ‘territorial ambitions’.
4. Company officials become ‘nabobs’
Becoming ‘nawabs’ meant more power for the Company — and something else: each Company servant began to dream of living like a nawab. After Plassey, the actual nawabs of Bengal were forced to give land and vast sums as personal gifts to Company officials. Clive amassed a fortune. He had come to Madras from England as an 18-year-old in 1743; when he left India in 1767 his Indian fortune was worth £401,102. Appointed Governor of Bengal in 1764 with orders to remove corruption, he was himself cross-examined by the British Parliament in 1772, which was suspicious of his wealth; he was acquitted, but died — NCERT says by suicide — in 1774.
Not all officials made money like Clive, NCERT adds: many died early from disease and war, and it would be wrong to see all as corrupt. Many came from humble backgrounds and wanted to earn enough to return home comfortably. Those who returned rich and flaunted it were called ‘nabobs’ — an anglicised ‘nawab’ — and were mocked in British plays and cartoons as upstarts and social climbers.
- Clive sailed in 1743 aged 17–18 and reached Madras in 1744 (Beyond NCERT). He was Governor of Bengal twice: 1758–60 (after Plassey) and 1765–67 (appointed 1764). He was Governor, never Governor-General — the first Governor-General was Warren Hastings (UPSC 2007).
- The parliamentary inquiry ran in 1772–73; the Commons resolved in 1773 that he had rendered great service. He died on 22 November 1774; suicide is widely believed but the cause is not certain — say ‘died in 1774’ if asked.
5. Company rule expands: Residents and the subsidiary alliance
Looking at the Company’s annexations from 1757 to 1857, NCERT finds a pattern: it rarely launched a direct military attack on unknown territory. It used political, economic and diplomatic methods to extend its influence before annexing a kingdom. After Buxar, it appointed Residents in Indian states — political or commercial agents whose job was to serve the Company’s interests. Through them, Company officials interfered in internal affairs: who would succeed to the throne, who would hold office. Sometimes it forced states into a ‘subsidiary alliance’: rulers could not keep independent armed forces; they were to be ‘protected’ by the Company but had to pay for the subsidiary forces; if they failed to pay, part of their territory was taken as a penalty. Under Richard Wellesley (Governor-General 1798–1805), the Nawab of Awadh was forced to give over half his territory in 1801 for failing to pay, and Hyderabad too ceded territory on similar grounds.
- Associated with Wellesley (1798–1805). The first ruler to sign under his system was the Nizam of Hyderabad (1798); then Mysore (1799), Tanjore (1799), Awadh (1801), the Peshwa (Treaty of Bassein, 1802) and others (Beyond NCERT; UPSC 1994). Earlier treaties with Awadh after Buxar had similar features, so ‘Wellesley’s system’ is the safe phrase.
- Typical terms (Beyond NCERT): a British force stationed in the state, paid by the ruler in cash or ceded territory; a Resident at court; no other Europeans in the ruler’s service; no war or diplomacy without the Company’s consent.
- It is not the Doctrine of Lapse (Dalhousie) — UPSC 1985. UPSC 2018 asked which aim did not apply; the key, ‘to secure a fixed income for the Company’, is debatable because rulers did pay subsidies — read it as ‘the alliance was about military and political control, not a revenue contract’, and keep the key.
6. Tipu Sultan, the ‘Tiger of Mysore’
The Company used direct war when it saw a threat to its political or economic interests — Mysore is NCERT’s example. Mysore grew strong under Haidar Ali (ruled 1761–1782) and his son Tipu Sultan (ruled 1782–1799). It controlled the profitable trade of the Malabar coast, where the Company bought pepper and cardamom. In 1785 Tipu stopped the export of sandalwood, pepper and cardamom through his ports and forbade local merchants to trade with the Company. He also built close ties with the French and modernised his army with their help. The British, furious, saw Haidar and Tipu as ambitious, arrogant and dangerous. Four wars were fought (1767–69, 1780–84, 1790–92 and 1799). In the last, at Srirangapatna (NCERT: Shrirangapatnam), Tipu was killed defending his capital; Mysore was placed under the former ruling dynasty, the Wodeyars, and a subsidiary alliance was imposed.
- First 1767–69 (Treaty of Madras), Second 1780–84 (Haidar died 1782; Treaty of Mangalore, 1784), Third 1790–92 (Cornwallis; Treaty of Seringapatam), Fourth 1799 (Wellesley). Tipu died in the Fourth, not the Third (UPSC 2004).
- NCERT says ‘only in the last … did the Company ultimately win a victory’. That is loose: the Third war ended in a clear Company victory — Tipu ceded about half his kingdom, paid an indemnity and gave two sons as hostages, as NCERT’s own Fig. 9 shows. Safe line: ‘the Company won decisively in 1792 and finally in 1799’.
- 1767–69 is the First Mysore war, not the First Maratha war (UPSC 2004 pairs).
- Many British writers of the time and after — for example Mark Wilks (Historical Sketches of the South of India, 1810–17) — portrayed Tipu as a fanatical tyrant, partly to justify the war of 1799.
- Historians such as Mohibbul Hasan (History of Tipu Sultan, 1951) and Irfan Habib (ed., Confronting Colonialism, 1999) stressed his modernising state — trade monopolies, rocketry, a new calendar and coinage, embassies abroad — and his resistance to the Company. Kate Brittlebank (Tipu Sultan’s Search for Legitimacy, 1997) placed him in the South Indian traditions of kingship, using both Islamic and local symbols such as the tiger.
- Historians continue to debate his treatment of some communities in Malabar and Coorg, where evidence is drawn from sources written from different sides. Present the readings with their authors and evidence; avoid present-day comparisons.
7. The Marathas, the claim to paramountcy and resistance
From the late eighteenth century the Company also set out to curb and finally destroy Maratha power. After defeat in the Third Battle of Panipat (1761), the Marathas’ dream of ruling from Delhi was shattered. They were divided into states under chiefs (sardars) of the Sindhia, Holkar, Gaikwad and Bhonsle dynasties, held together in a confederacy under a Peshwa (principal minister) based in Pune. Mahadji Sindhia and Nana Phadnis were famous soldiers and statesmen of the late eighteenth century. The first war ended in 1782 with the Treaty of Salbai and no clear victor. The Second Anglo-Maratha War (1803–05), fought on several fronts, gave the British Orissa and the territories north of the Yamuna, including Agra and Delhi. The Third (1817–19, NCERT) ended Maratha power: the Peshwa was removed and sent to Bithur near Kanpur with a pension, and the Company now controlled all territory south of the Vindhyas.
From the early nineteenth century the Company pursued aggressive expansion. Under Lord Hastings (Governor-General 1813–1823) a new policy of ‘paramountcy’ began: the Company claimed its authority was paramount, or supreme, and greater than that of Indian states, so it was justified in annexing or threatening to annex any kingdom to protect its interests. This view guided later policy too. It did not go unchallenged. When the British tried to annex the small state of Kittur (in present-day Karnataka), Rani Channamma took up arms and led an anti-British resistance; she was arrested in 1824 and died in prison in 1829. Rayanna, a poor chowkidar of Sangoli in Kittur, carried on the struggle with popular support, destroying British camps and records, until he was caught and hanged.
- First Anglo-Maratha War: 1775–82 (Salbai, 1782). Second: 1803–05, after the Peshwa accepted a subsidiary alliance at Bassein (1802). Third: NCERT says 1817–19; most texts give 1817–18 (the Peshwa surrendered in June 1818) — accept either, but match the options.
- The Peshwa removed was Baji Rao II; his adopted son was Nana Saheb, a leader of 1857 at Kanpur (hess205, lehs302) (Beyond NCERT).
- Kittur rose in October 1824 when the Company refused to recognise the Rani’s adopted son — a lapse-like policy two decades before Dalhousie. NCERT says Rayanna was hanged in 1830; standard accounts give 26 January 1831 (he was captured in 1830). Safe line: ‘captured in 1830 and hanged in 1831’.
- Lord Hastings (1813–23) ≠ Warren Hastings (1774–85).
8. The north-west, the Doctrine of Lapse and Awadh
In the late 1830s the Company grew worried that Russia might expand across Asia and enter India from the north-west. To secure that frontier it fought a long war with Afghanistan (1838–1842) and set up indirect rule there. Sind was taken in 1843. Punjab came next, but Maharaja Ranjit Singh held the Company back; after his death in 1839, two long wars were fought with the Sikh kingdom, and in 1849 Punjab was annexed.
The final wave of annexations came under Lord Dalhousie (Governor-General 1848–1856), with the Doctrine of Lapse: if an Indian ruler died without a male heir, his kingdom would ‘lapse’ and become Company territory. One kingdom after another was taken this way: Satara (1848), Sambalpur (1850), Udaipur (1852), Nagpur (1853) and Jhansi (1854) (NCERT’s dates). Finally, in 1856, the Company took over Awadh — this time arguing that it was ‘obliged by duty’ to free the people from the nawab’s ‘misgovernment’. Angered by the humiliating way the nawab was deposed, the people of Awadh joined the great revolt of 1857.
- 1797: British territory is mainly Bengal and Bihar with the area round Benares, a strip down the east coast to Madras, land around Madras and in the far south, and small holdings at Bombay; almost all the interior — the Marathas, Hyderabad, Mysore, Awadh (Lucknow), the Punjab, Rajput states — is under Indian rulers.
- 1840: British rule now covers the Ganga plain up to Delhi, much of the Deccan and western India (the former Peshwa’s lands), Orissa and most of the south; still outside are the Punjab and Sind in the north-west, Awadh, Rajputana and central Indian states, Hyderabad and Mysore.
- 1857: Punjab, Sind, Awadh and the Nagpur region have been added; what remains outside is a patchwork of princely states — Rajputana, central India, Hyderabad, Mysore, Kashmir and others — mostly bound by treaties; Nepal stays outside throughout.
| Year | Territory | How acquired |
|---|---|---|
| 1757 | 24 Parganas (zamindari) | granted by Mir Jafar after Plassey (Beyond NCERT) |
| 1760 | Burdwan, Midnapore, Chittagong | ceded by Mir Qasim on his installation (Beyond NCERT) |
| 1765 | Diwani of Bengal, Bihar, Orissa | grant by the Mughal emperor after Buxar (NCERT) |
| 1766 | Northern Circars (east coast) | Mughal grant, confirmed by treaty with Hyderabad (Beyond NCERT) |
| 1775 | Benares | ceded by Awadh (Beyond NCERT) |
| 1792 | Malabar, Dindigul, Baramahal | ceded by Tipu after the Third Mysore War (Beyond NCERT) |
| 1799 | much of Mysore’s territory | conquest; the rest to the Wodeyars under a subsidiary alliance (NCERT) |
| 1800–01 | ‘Ceded Districts’ (Hyderabad); over half of Awadh | ceded to pay for subsidiary forces (NCERT; names Beyond NCERT) |
| 1801 | Carnatic | annexed by Wellesley (Beyond NCERT) |
| 1803 | Orissa; Agra, Delhi and lands north of the Yamuna | Second Anglo-Maratha War (NCERT) |
| 1818 | the Peshwa’s territories | Third Anglo-Maratha War (NCERT) |
| 1843 | Sind | conquest (NCERT) |
| 1848–54 | Satara, Sambalpur, Udaipur, Nagpur, Jhansi | Doctrine of Lapse (NCERT) |
| 1849 | Punjab | Second Anglo-Sikh War (NCERT) |
| 1852 | Lower Burma (Pegu) | Second Anglo-Burmese War (Beyond NCERT) |
| 1853 | Berar | taken from Hyderabad for arrears of subsidy (Beyond NCERT) |
| 1856 | Awadh | annexed on the plea of ‘misgovernment’ (NCERT) |
- Awadh (1856) was annexed for ‘misgovernment’, not under lapse — Nawab Wajid Ali Shah had heirs (UPSC 2007).
- Mysore was not annexed by lapse (UPSC 1992); its administration was taken over in 1831 by Bentinck for misrule and returned to the Wodeyars in 1881.
- The Udaipur of the lapse list is a small state in present-day Chhattisgarh, not Mewar (Rajasthan).
- Lapse dates differ by a year between books because some give the ruler’s death and others the formal annexation: standard lists give Satara 1848, Jaitpur and Sambalpur 1849, Baghat 1850, Udaipur 1852, Jhansi 1853 and Nagpur 1854. Safe rule: Satara first (1848); Jhansi and Nagpur at the end (1853–54).
- ‘The last major extension’ of territory is usually credited to Dalhousie (UPSC 2000), though Upper Burma was annexed later (1885–86, Dufferin) — keep the key, aware of the wording.
- Punjab annexed 1849; Awadh 1856; Upper Burma 1886.
- Dalhousie and his defenders argued that the Company, as paramount power, had the right to refuse recognition to adopted heirs of dependent states it had created or restored, that this followed earlier rulings (the Court of Directors had laid down the principle in the 1830s–40s), and that direct rule would bring better government.
- Critics then and since — some British officials among them, and Indian nationalist historians — pointed out that Hindu law fully recognised adoption for inheritance and religious rites, so the doctrine overrode Indian law for the Company’s gain; after 1858 the Crown renounced further annexation (lehs302), and in 1860 Canning issued sanads recognising princes’ right to adopt heirs.
- Historians such as S.N. Sen and Eric Stokes link lapse and the Awadh annexation to the loss of status of princes, their courts and soldiers that fed 1857. UPSC Mains 2013 asked whether Dalhousie was the ‘founder of modern India’ — a question about his railways, telegraph and reforms, where annexation is the other side of the balance sheet.
9. Setting up a new administration
Warren Hastings (Governor-General 1773 to 1785, NCERT) was one of many important figures in the expansion of Company power. By his time the Company held power in Bengal, Bombay and Madras. British territory was divided into three Presidencies — Bengal, Madras and Bombay — each under a Governor, with the Governor-General as supreme head. Hastings, the first Governor-General, introduced several reforms, especially in justice. From 1772 each district was to have two courts: a criminal court (faujdari adalat) and a civil court (diwani adalat). Maulvis and Hindu pandits interpreted Indian laws for the European district collectors who presided over the civil courts; the criminal courts remained under a qazi and a mufti, supervised by the collectors.
Because pandits interpreted local laws differently according to different schools of the dharmashastra, in 1775 eleven pandits were asked to compile a digest of Hindu laws, which N.B. Halhed translated into English. By 1778, NCERT says, a code of Muslim laws was also compiled for European judges. Under the Regulating Act of 1773 a new Supreme Court was established, and NCERT adds that a court of appeal, the Sadar Nizamat Adalat, was set up at Calcutta (see the trap). The key figure in a district was the Collector: he collected revenue and taxes and kept law and order with judges, police officers and darogas. His office, the Collectorate, became the new centre of power and patronage, steadily replacing earlier holders of authority.
- Regulating Act, 1773: created the Governor-General of Bengal (Warren Hastings, in office from 1774) with a council of four, made the Bombay and Madras Presidencies subordinate to Bengal, and set up the Supreme Court at Calcutta (1774, Chief Justice Elijah Impey) (Beyond NCERT details; UPSC 2005).
- The Sadar Diwani Adalat (civil) and Sadar Nizamat Adalat (criminal) appeal courts came with Hastings’s 1772 judicial plan, not with the Regulating Act; the Sadar Nizamat Adalat sat at Murshidabad until Cornwallis moved it to Calcutta in 1790 (Beyond NCERT). Safe line: ‘appeal courts from the 1772 plan; the Supreme Court from the 1773 Act’.
- Halhed’s translation of the Hindu law digest was published in 1776 as A Code of Gentoo Laws (Beyond NCERT).
- A regular police force on the British pattern is credited to Cornwallis, not Hastings (UPSC 2005); the Indian Penal Code came into force in 1860–62.
- The impeachment: Hastings returned in 1785; the trial ran 1788–1795 and ended in acquittal.
- Burke and his allies presented the trial as a judgement on arbitrary power and the ‘geographical morality’ that excused in India what would be crimes in Britain.
- Hastings’s defenders, then and later, argued that he had saved British power in India during wars with Mysore and the Marathas and that he respected Indian learning (he patronised the Asiatic Society and the law digests — hess206).
- P.J. Marshall (The Impeachment of Warren Hastings, 1965) and later historians read the trial as much about British party politics and anxieties over the Company’s power as about India. Nicholas Dirks (The Scandal of Empire, 2006) argued that the trial, by blaming individuals, helped legitimise empire itself. Present these as attributed readings.
10. The Company army — and the conclusion
Colonial rule brought some new ideas of administration and reform, but its power rested on military strength. The Mughal army was mainly cavalry (sawars) and infantry (paidal), trained in archery (teer-andazi) and the sword; cavalry dominated and the state felt no need for a large trained infantry, since zamindars supplied armed peasants as foot soldiers. In the eighteenth century, Mughal successor states such as Awadh and Banaras began recruiting peasants and training them as professional soldiers. The Company copied the method for its own army — the sepoy army (from sipahi, soldier). As warfare technology changed from the 1820s, cavalry needs declined, as Britain fought in Burma, Afghanistan and Egypt with soldiers armed with muskets and matchlocks, and infantry became more important. In the early nineteenth century the British built a uniform military culture: European-style training, drill and discipline regulated soldiers’ lives far more than before — often ignoring caste and community feelings. Could soldiers simply give up their caste and religious feelings? The revolt of 1857, NCERT says, gives a glimpse of what the sepoys felt (hess205).
Conclusion. The East India Company was thus transformed from a trading company into a territorial colonial power. New steam technology helped: the sea voyage to India had taken six to eight months, and steamships cut it, NCERT says, to about three weeks, letting more Britons and their families come. By 1857 the Company ruled directly over about 63 per cent of the territory and 78 per cent of the population of the subcontinent, and with its indirect influence over the rest, had virtually the whole of India under its control.
- Money: the Bengal revenues after 1765 paid regular salaries — a major advantage over rulers whose troops were often unpaid for months.
- Discipline and drill: infantry trained to fire in volleys, supported by field artillery, with a clear chain of command.
- Diplomacy and division: Mir Jafar at Plassey; the Nizam and Marathas allied with the Company against Tipu in 1790–92; Maratha chiefs fighting each other; subsidiary alliances that disarmed potential enemies.
- Sea power and supply: reinforcements from Madras and Britain by sea (Clive’s fleet, 1757).
- Indian soldiers and financiers: most troops were Indian sepoys; Indian bankers lent to the Company. Historians such as C.A. Bayly and Seema Alavi (The Sepoys and the Company, 1995) stress this ‘military fiscalism’ and the sepoys’ own interests in Company service; Indian rulers such as Tipu and Ranjit Singh also modernised their armies, sometimes with European officers.
- ‘63 per cent of territory and 78 per cent of population’ under direct rule by 1857 is NCERT’s figure; other books round it as ‘about three-fifths of the territory and three-quarters of the people’.
- ‘Three weeks’ by steamship is optimistic for the period: in the 1840s, steamer and overland travel via Egypt typically took roughly four to six weeks; the voyage shortened further after the Suez Canal opened in 1869 (Beyond NCERT). Safe line: ‘steam cut the voyage from months to weeks’.
- ‘Sepoy’ comes from sipahi; the sepoy army copied the methods of Awadh and Banaras, not of the Mughal centre.
NCERT’s Activities — short answers
The chapter’s three Activities and its in-text question, in order. Short outlines follow.
In-text (page 11): Aurangzeb's farman granted only the Company the right to trade duty free, but its officials refused to pay duty on their private trade. How could the Nawab of Bengal, Murshid Quli Khan, not protest?
Activity (page 15): Imagine you are a young Company official who has been in India for a few months. Write a letter home to your mother about your luxurious life, contrasting it with your earlier life in Britain.
Activity (page 18): Imagine you have found two old newspapers reporting on the Battle of Srirangapatna and the death of Tipu Sultan — one British, one from Mysore. Write the headline for each.
Activity (page 19): Imagine you are a nawab's nephew brought up to think you will one day be king; the Doctrine of Lapse will not allow it. What will you feel, and what will you plan so that you can inherit the crown?
Fig. 14 a, b, c (page 20): Look at the maps of 1797, 1840 and 1857 with a present-day political map. In each, identify the parts of India not under British rule.
NCERT exercise — answer outlines
‘Let’s recall’ (three questions), ‘Let’s imagine’, ‘Let’s discuss’ (six) and ‘Let’s do’ (two), pages 24–25.
Let's recall 1: Match — Diwani; 'Tiger of Mysore'; faujdari adalat; Rani Channamma; sipahi — with Tipu Sultan; right to collect land revenue; sepoy; criminal court; led an anti-British movement in Kitoor.
Let's recall 2: Fill in the blanks — (a) The British conquest of Bengal began with the Battle of ___. (b) Haidar Ali and Tipu Sultan were the rulers of ___. (c) Dalhousie implemented the Doctrine of ___. (d) Maratha kingdoms were located mainly in the ___ part of India.
Let's recall 3: True or false — (a) The Mughal empire became stronger in the eighteenth century. (b) The English East India Company was the only European company that traded with India. (c) Maharaja Ranjit Singh was the ruler of Punjab. (d) The British did not introduce administrative changes in the territories they conquered.
Let's imagine: You are living in England in the late eighteenth or early nineteenth century. How would you have reacted to stories of British conquests, remembering the immense fortunes many officials were making?
Let's discuss 4: What attracted European trading companies to India?
Let's discuss 5: What were the areas of conflict between the Bengal nawabs and the East India Company?
Let's discuss 6: How did the assumption of Diwani benefit the East India Company?
Let's discuss 7: Explain the system of 'subsidiary alliance'.
Let's discuss 8: In what way was the administration of the Company different from that of Indian rulers?
Let's discuss 9: Describe the changes that occurred in the composition of the Company's army.
Let's do 10: After the British conquest of Bengal, Calcutta grew from a small village to a big city. Find out about the culture, architecture and life of Europeans and Indians in the city during the colonial period.
Let's do 11: Collect pictures, stories, poems and information about the Rani of Jhansi, Mahadji Sindhia, Haidar Ali, Maharaja Ranjit Singh, Lord Dalhousie or any other contemporary ruler of your region.
What to remember
Numbers
One-liners
- After 1707, regional kingdoms rose and Delhi ceased to be an effective centre.
- The 1600 charter gave the Company a monopoly of English trade with the East, not of European trade.
- Mercantile companies profited by excluding rivals, so trade was carried on with arms.
- Misuse of duty-free privileges, forts and meddling set the Company against the Bengal nawabs.
- Plassey (1757) was won because Mir Jafar’s troops never fought.
- Buxar (1764) was followed by the Diwani (1765), which gave the Company Bengal’s revenue.
- The Diwani ended the need to import bullion to buy Indian goods.
- Rich returning Company servants were mocked as ‘nabobs’.
- Residents interfered in the internal affairs of Indian states.
- Subsidiary alliance: no army of your own; pay for Company troops or lose territory.
- Four Anglo-Mysore wars ended with Tipu’s death at Srirangapatna in 1799.
- The Third Anglo-Maratha War ended Maratha power and pensioned off the Peshwa.
- Lord Hastings claimed paramountcy: Company authority was supreme.
- Doctrine of Lapse: no natural male heir, the state lapses (Dalhousie).
- Awadh was annexed in 1856 for ‘misgovernment’, not lapse.
- Warren Hastings set up district civil and criminal courts; the Collector became the centre of power.
- The sepoy army was trained in European drill that ignored caste and community feelings.
Traps to avoid
- The Hugli factory (1651) was the first English factory in Bengal; the first permanent English factory in India was Surat (1613, Jahangir).
- The famous duty-free farman is Farrukhsiyar’s (1717); NCERT attributes the grant to Aurangzeb.
- Mir Jafar was restored in 1763, before Buxar; Buxar (1764) was against Mir Qasim, Shuja-ud-daula and Shah Alam II.
- Clive was Governor of Bengal, never Governor-General; Warren Hastings was the first Governor-General (Regulating Act 1773).
- Tipu died in the Fourth Mysore War (1799), not the Third; the Third (1790–92) was itself a clear Company victory.
- 1767–69 is the First Mysore War; 1845–46 is the First Sikh War.
- Lord Hastings (paramountcy, 1813–23) is not Warren Hastings (1774–85).
- Rayanna was hanged in January 1831 (NCERT: 1830).
- Awadh was annexed for misgovernment, Mysore was never taken by lapse, and the lapse ‘Udaipur’ is in Chhattisgarh.
- Lapse dates vary by a year between books; Satara (1848) is always first.
- The Sadar Nizamat Adalat dates from the 1772 plan (at Murshidabad until 1790), not the Regulating Act.
- A regular police force is credited to Cornwallis, not Warren Hastings.
- The first state to accept Wellesley’s subsidiary alliance was Hyderabad (1798).
How to strategise
Prelims — what UPSC asks
- People and policies: Clive turned the Company into a territorial power (1984); Wellesley’s subsidiary alliance (1985, 1994 — Hyderabad first; 2018 — which aim did not apply); Dalhousie’s Doctrine of Lapse (1982; 1992 — Mysore was not taken by lapse); Awadh removed on the pretext of misgovernance (2007); the last major extension under Dalhousie (2000); the first Governor-General (2007) and the Regulating Act’s Supreme Court (2005).
- Wars and dates: match wars to years (1999: 1775 Maratha, 1780 Mysore, 1824 Burma, 1838 Afghan; 2004: 1790–92 Third Mysore, 1824–26 First Burmese) and statements on Plassey and Tipu (2004). Make a single table of Mysore I–IV, Maratha I–III, Sikh I–II with treaties.
- Trade: the first English factory under Jahangir (2008) and the Bengal exports of cotton, silk, saltpetre and opium (2018).
- Answer-key notes (all keys kept): 2000 ‘last major extension: Dalhousie’ — standard key, though Upper Burma (1886) was large; 2018 subsidiary alliance ‘fixed income’ — debatable wording, keep the key; 2008 — NCERT’s ‘first factory on the Hugli’ would mislead: the answer is Jahangir (Surat, 1613). The 2004 ‘pairs’ question with no stored key (Doctrine of Lapse–Dalhousie and Ilbert Bill–Ripon both correct) is not linked here.
Mains — where it appears and how to answer
- Mid-eighteenth-century polity (2017): regional successor states (Bengal, Awadh, Hyderabad), new states (Marathas, Sikhs, Mysore), Afghan invasions and Panipat (1761), the European companies — then the ‘decline versus regional vitality’ debate with names attached.
- Why the Company won (2022): the Diwani’s money, drilled sepoy infantry and artillery, diplomacy and Indian divisions (Mir Jafar; the Nizam and Marathas against Tipu), subsidiary alliances, sea power, Indian financiers — balanced by Indian rulers’ own modernisation (Tipu, Ranjit Singh).
- Related: Dalhousie as ‘founder of modern India’ (2013) — use lapse and Awadh as the cost side; the economic consequences of the Diwani link to keec101 and lehs301 (Permanent Settlement).
Self-check
Tap an option. NCERT's own exercise questions come first; the rest test the figures and common confusions.
1. Match: the Diwani gave the East India Company:
2. Which statement from NCERT’s exercise is true?
3. A main reason for Sirajuddaulah’s defeat at Plassey (1757) was that:
4. Under the subsidiary alliance, an Indian ruler:
5. Tipu Sultan was killed defending Srirangapatna in:
6. Which state was NOT annexed under the Doctrine of Lapse?
7. The policy of ‘paramountcy’ was initiated under:
8. Under Warren Hastings’s system, the district criminal court (faujdari adalat) was:
UPSC questions from this chapter
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