Facts on India (002)

 In 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. This meant that no other

trading group in England could

compete with the East India

Company. With this charter

the Company could venture

across the oceans, looking

for new lands from which it

could buy goods at a cheap price, and carry them

back to Europe to sell at higher prices. The Company

did not have to fear competition from other English

trading companies. Mercantile trading companies

in those days made profit primarily by excluding

competition, so that they could buy cheap and sell dear.

The royal charter, however, could not prevent other

European powers from entering the Eastern markets.

By the time the first English ships sailed down the

west coast of Africa, round the Cape of Good Hope, and

crossed the Indian Ocean, the Portuguese had already

established their presence in the western coast of

India, and had their base in Goa. In fact, it was Vasco

da Gama, a Portuguese explorer, who had discovered

this sea route to India in 1498. By the early seventeenth

century, the Dutch too were exploring the possibilities

of trade in the Indian Ocean. Soon the French traders

arrived on the scene.

The problem was that all the companies were

interested in buying the same things. The fine qualities

of cotton and silk produced in India had a big market

in Europe. Pepper, cloves, cardamom and cinnamon too

were in great demand. Competition amongst the

European companies inevitably pushed up the prices

at which these goods could be purchased, and this

reduced the profits that could be earned. The only way

the trading companies could flourish was by eliminating

rival competitors. The urge to secure markets therefore

led to fierce battles between the trading companies.

Through the seventeenth and eighteenth centuries they

regularly sank each other’s ships, blockaded routes,

and prevented rival ships from moving with supplies of goods. Trade was carried on with arms and trading

posts were protected through fortification.

This effort to fortify settlements and carry on profitable

trade also led to intense conflict with local rulers. The

company therefore found it difficult to separate trade

from politics. Let us see how this happened