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Class 8th Science
Class 8 Social Science History
Online Class For 8th Standard Students (CBSE) (English Medium)
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From Trade to Territory Class 8 Notes Social Science History Chapter 2

East India Company Comes East: In 1600, Queen Elizabeth I granted a charter to East India Company for a monopoly of trade with nations in the east. Trading companies made efforts to maximise profit by eliminating rivals in trade.

East India Company Begins Trade in Bengal: The first factory of East India Company, which worked as a warehouse and base for the workers of the company, was established in 1651. The workers were known as ‘factors’. As trade expanded, the company persuaded merchants to settle near the factory.

The Battle of Plassey: Sirajuddaulah succeeded Ali Vardi Khan. He faced the armies and the naval fleet of the East India Company at Plassey in the year 1757. The British army was led by Robert Clive who managed to crush the forces of the Nawab, thus winning the first major battle and making it a historic landmark.

The Battle of Buxar: Mir Jafar became the new Nawab, and in return, he gave huge amounts of revenue to East India Company and its officials. East India Company felt it as the best way of earning profits and started exchanging with nawabs regularly. Mir Kasim was made the Nawab after Mir Jafar, and when he posed danger to their existence, East India Company replaced him again by Mir Jafar.

Tipu Sultan-The Tiger of Mysore: The company engaged in a direct conflict only when a native state became detrimental to the company’s rule in the subcontinent. Mysore emerged as a potential threat under Haidar Ali and his son, Tipu Sultan.

War with the Marathas: The Third Battle of Panipat shattered the dreams of the Marathas to rule India from Delhi. It also led to the division of Maratha confederacy. Four chiefs ruled from four centres under a Peshwa based in Pune.

Subsidiary Alliance: A policy introduced by Lord Wellesley through which Indian states were to accept a British resident and had to disband their army. East India Company deployed its troops and their maintenance was borne by Indian rulers.

The doctrine of Lapse: A law introduced by Lord Dalhousie which stated that if any ruler of a subsidiary state dies without having a natural heir, his state would lapse into East India Company empire. The states annexed were Satara, Sambhalpur, Udaipur, Nagpur and Jhansi.

The British power began to emerge in India from the second half of the 18th century.

The British originally came to India as a small trading company and were reluctant to acquire territories. Ultimately, they became the masters of the vast territory. This did not happen overnight. It took a long time.

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.

The Royal Charter, however, could not prevent other European powers from entering the eastern markets. The Portuguese established their presence in the western coast of India and got their base in Goa. By the early 17th century, the Dutch too were exploring the possibilities of trade in the Indian Ocean. Soon, the French traders arrived.

All the companies wanted to buy the same things such as fine qualities of cotton, silk, pepper, cloves, cardamom and cinnamon from the Indian market.

Competition amongst the companies pushed up the prices at which these goods could be purchased and this reduced the profits that could be earned. The only way trading companies could flourish was by eliminating rival competitors.


The first English factory was set up on the banks of the river Hugli in 1651. Soon, the trade expanded and the East India Company persuaded merchants and traders to come and settle near the factory.

By .1696 it began building^a fort around the settlement. It also bribed Mughal officials into giving the company zamindari rights over three villages. One of these was Kalikata which later became the city of Calcutta or Kolkata as it is now called.

It also persuaded the Mughal emperor Aurangzeb to issue a farman granting the company the right to trade duty-free.

The officials of the Company who were carrying on private trade, were expected to pay duty. But they refused to pay which angered the Nawab of Bengal, Murshid Quli Khan. This led to fierce battles.

After the death of Aurangzeb, the Bengal Nawabs (Murshid Quli Khan, Alivardi Khan and Sirajuddaulah) one after another refused to grant concessions to the Company.

In such a situation the Company began to think about replacing Sirajuddaulah with a puppet ruler who would willingly give trade concessions and other privileges. They began helping one of Sirajuddaulah’s rivals become the Nawab. Sirajuddaulah got infuriated. This finally led to the Battle of Plassey in which Sirajuddaulah got defeated.

One of the main reasons for the defeat of the Nawab was that the forces led by Mir Jafar, one of Sirajuddaulah’s commanders, never fought the battle.

For the Company, it was the first victory in India.

Mir Jafar who had deceived Sirajuddaulah was made the new Nawab of Bengal.

But Mir Jafar could not prove himself a puppet ruler for a long time. Hence, the Company deposed him and installed Mir Qasirifi in his place. When Mir Qasim complained, he in turn was defeated in the Battle of Buxar in 1764, driven out of Bengal and Mir Jafar was reinstalled, who died the next year, i.e. 1765. In the same year the Mughal emperor appointed the Company as the Diwan of the provinces of Bengal. The Company now began to exploit the vast revenue resources of Bengal.

After the Battle of Buxar the Company appointed Residents in Indian states. These Residents were political or commercial agents and their job was to serve and further the interests of the company. Through the Residents, the Company began interfering in the internal matters of Indian states. Soon the Company forced the states into a subsidiary alliance. According to the terms of this alliance, Indian rulers were not allowed to have their independent armed forces.

They were to be protected by the company, but had to pay for the ‘subsidiary forces’ that the Company was supposed to maintain for the purpose of this protection. If the Indian rulers failed to make the payment, the part of their territory was taken away. Awadh and Hyderabad, for example, were forced to cede territories on this ground.

Whenever the Company saw a threat to its political or economic interests, it resorted to direct military confrontation. In this regard we can give example of Mysore.

Mysore had become powerful under rulers like Haider Ali and his son Tipu Sultan.

Mysore controlled the profitable trade of the Malabar coast where the company purchased pepper and cardamom. In 1785. Tipu Sultan stopped the export of Sandalwood, pepper and cardamom through the parts of his kingdom, and disallowed local merchants from trading with the Company. This infuriated the Company.

The Company, for this reason, fought four wars with Mysore. Only in the last the Battle of Seringapatam did the company ultimately win a victory. Tipu Sultan was killed defending his capital Seringapatam.

The Company also subdued the Marathas in a series of wars.

From the early 19th century the Company pursued an aggressive policy of territorial expansion.

Under Governor-General Lord Hastings (1813-1823) a new policy of paramountcy was initiated. The Company now claimed that its authority was paramount or supreme. Following this policy, the Company annexed several states.

Under Governor-General Lord Dalhousie annexations were at the peak. He devised a policy that came to be known as the Doctrine of Lapse. The doctrine declared that if an Indian ruler died without a male heir his kingdom would become the part of Company territory.

Satara, Sambalpur, Udaipur, Nagpur and Jhansi were annexed by applying this doctrine.

In 1856, the Company also took over Awadh.

When Warren Hastings became the first Governor-General of India he introduced several administrative reforms, especially in the sphere of justice.

In the early 19th century, the British developed a uniform military culture. Soldiers were increasingly subjected to European-style training, drill and discipline that regulated their life for more than before.

Thus, the East India Company was transformed from a trading company to territorial colonial power.

Mercantile: The word refers to a business enterprise that makes profit primarily through trade, buying goods cheap and selling them at higher prices.

Factor: The Company traders were known at that time as factors.

Farman: A royal order during the Mughal period.

Puppet: The term here is used to refer to a person who is controlled by someone else.

Negotiation: A formal discussion between people in order to find a solution.

Charter: An official order or resolution.

Nabob: The British called the nawab as nabob, who was the symbol of power and authority.

Subsidiary alliance: As per the terms of this alliance, Indian rulers were not allowed to have their independent armed forces. They were to be protected by the company.

Injunction: Instruction.

Subservience: The act of being submissive.

Confederacy: Alliance.

Paramountcy: Being paramount or supreme.

The Doctrine of Lapse: This was a policy of the Company to annex kingdoms. As per this policy if an Indian ruler died without a male heir, his kingdom would become the part of the Company territory.

Qazi: A judge.

Mufti: A jurist of the Muslim community responsible for expounding the law that the Qazi would administer.

Impeachment: A trial by the House of Lords in England on charges of misconduct brought against a person in the House of Commons.

Sawar: Men on horses.

Dharmashastra: Sanskrit texts prescribing social rules and codes of behaviour. These were begun to compose from C. 500 BCE onwards.

Musket: A heavy gun u§ed by infantry soldiers.

Matchlock: An early type of gun in which the powder was ignited by a match.

1498 – Vasco da Gama, a Portuguese explorer, discovered the sea-route to India.

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.

1651 – The first English factory was set up on the banks of the river Hugli.

1696 – The Company began building a fort around the settlement.

1756 – Alivardi Khan died and Sirajuddaulah became the Nawab of Bengal.

1757 – The Battle of Plassey took place.

1764 – The Battle of Buxar took place.

1765 – The Mughal Emperor appointed the Company as the Diwan of the provinces of Bengal.

1782-99 – Tipu Sultan was the ruler of Mysore.

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