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20 Facts About The East India Company

20 Facts About The East India Company

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The East India Company (EIC) is one of the most infamous corporations in history. From a office in Leadenhall Street in London, the company conquered a subcontinent.

Here are 20 facts about the East India Company.

1. The EIC was established in 1600

The “Governor and Company of Merchants of London trading to the East Indies” as it was called at the time, was granted a royal charter by Queen Elizabeth I on 31 December 1600.

The charter granted the Company a monopoly on all trade east of the Cape of Good Hope and, ominously, the right to “wage war” in the territories in which it operated.

2. It was one of the first joint stock companies in the world

The idea that random investors could buy shares of a company’s stock was a revolutionary new idea in the late Tudor period. It would transform the British economy.

The world’s first chartered joint-stock company was the Muscovy Company trading between London and Moscow from 1553, but the EIC followed close behind it and operated on a far larger scale.

Orlando Figes talks to Dan about social and technological developments and their relationship to cultural changes in the 19th century.

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3. The Company’s first voyage made them a 300% profit…

The first voyage got under way just two months after the East India Company received its charter, when the Red Dragon – a repurposed pirate ship from the Caribbean – set sail for Indonesia in February 1601.

The crew traded with the Sultan at Acheh, raided a Portuguese ship and returned with 900 tonnes of spices, including pepper, cinnamon and cloves. This exotic produce earned a fortune for the company’s shareholders.

4. …but they lost out to the Dutch East India Company

The Dutch East India Company or VOC was founded just two years after the EIC. However, it raised far more money than its British counterpart and seized control of the lucrative spice islands of Java.

During the 17th Century the Dutch established trading posts in South Africa, Persia, Sri Lanka and India. By 1669 the VOC was the richest private company the world had ever seen.

Dutch ships return from Indonesia, laden with riches.

It was due to Dutch dominance in the spice trade, that the EIC turned to India in search of wealth from textiles.

5. The EIC founded Mumbai, Kolkata and Chennai

While the areas were inhabited before the arrival of the British, EIC merchants founded these cities in their modern incarnation. They were the first three large settlements by the British in India.

All three were used as fortified factories for the British – storing, processing and protecting goods that they had traded with the Mughal rulers of India.

6. The EIC fiercely competed with the French in India

The French Compagnie des Indes competed with the EIC for commercial supremacy in India.

Both had their own private armies and the two companies fought a series of wars in India as part of a wider Anglo-French conflict throughout the 18th Century, which spanned the globe.

On 13 September 1759, on the Plains of Abraham near the city of Quebec, an outnumbered British army fought a battle that would change the history of the world: the Battle of Quebec.

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7. British civilians died in the Black Hole of Calcutta

The Nawab (viceroy) of Bengal, Siraj-ud-Daulah could see that the East India Company was developing into a colonial power, expanding from its commercial origins to become a political and military force in India.

He told the EIC not to re-fortify Kolkata, and when they ignored his threat, the Nawab made a move on the city, capturing their fort and factory there.

British captives were held in a small dungeon known as the Black Hole of Calcutta. Conditions were so awful in the prison that 43 of the 64 prisoners kept there died overnight.

8. Robert Clive won the Battle of Plassey

Robert Clive was the Governor of Bengal at the time, and led a successful relief expedition, which recaptured Kolkata.

The conflict between the Siraj-ud-Daula and the EIC came to a head in the mangroves of Plassey, where the two armies met in 1757. Robert Clive’s army of 3,000 soldiers was dwarfed by the Nawab’s force of 50,000 soldiers and 10 war elephants.

However, Clive had bribed the commander-in-chief of the Siraj-ud-Daulah’s army, Mir Jafar, and promised to make him Nawab of Bengal if the British won the battle.

When Mir Jafar withdrew in the heat of the battle, the discipline of the Mughal army collapsed. The EIC soldiers routed them.

Robert Clive meets Mir Jafar in the aftermath of the Battle of Plassey.

9. The EIC administered Bengal

The Treaty of Allahabad in August 1765 granted the EIC the right to run the finances of Bengal. Robert Clive was appointed as the new governor of Bengal and the EIC took over the tax-collection in the region.

The Company could now use the taxes of the people of Bengal, to fund their expansion across the rest of India. This is the moment that the EIC transitioned from a commercial to a colonial power.

Robert Clive is appointed as governor of Bengal.

10. It was EIC tea that was dumped into the harbour during the Boston Tea Party

In May 1773, a group of American Patriots boarded British ships and dumped 90,000 lbs of tea into Boston Harbour.

The stunt was done to protest taxes imposed on the American colonies by the British state. The Patriots famously campaigned for

“No taxation without representation.”

The Boston Tea Party was a crucial milestone on the road to the American Revolutionary War which would break out just two years later.

Susan Schulten presents a selection of maps from the fascinating collection of maps that feature in her book 'A History of America in 100 Maps'.

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11. The EIC’s private military force was twice the size of the British Army

By the time the East India Company occupied the capital of Mughal India in 1803, it controlled a private army of about 200,000 soldiers – double the number that the British Army could call upon.

12. It was run out of an office just five windows wide

Although the EIC governed around 60 million people in India, it operated out of a small building on Leadenhall Street called East India House, just five windows wide.

The site is now under the Lloyd’s building in London.

East India House – the office of the East India Company on Leadenhall Street.

13. The East India Company built a large part of the London Docklands

In 1803 the East India docks were built in Blackwall, East London. Up to 250 ships could be moored at any given moment, which boosted London’s commercial potential.

14. The annual expenditure of the EIC amounted to a quarter of the total spending of the British Government

The EIC spent £8.5 million annually in Britain, although their revenues totalled an extraordinary £13 million a year. The latter is equivalent to £225.3 million in today’s money.

15. The EIC seized Hong Kong from China

The Company was making a fortune growing opium in India, shipping it to China and selling it in there.

The Qing dynasty fought the First Opium War in an attempt to ban the opium trade, but when the British won the war, they gained Hong Kong Island in the peace treaty that followed.

Scene from the Second Battle of Chuenpi, during the First Opium War.

16. They bribed many MPs in Parliament

An investigation by parliament in 1693 discovered that the EIC was spending £1,200 a year lobbying ministers and MPs. The corruption went both ways, as nearly a quarter of all MPs held shares in the East India Company.

17. The Company was responsible for the Bengal Famine

In 1770, Bengal suffered a catastrophic famine in which about 1.2 million people died; one fifth of the population.

While famines are not uncommon in the Indian subcontinent, it was the policies of the EIC that led to suffering on that incredible scale.

The Company maintained the same levels of taxation and in some cases even raised them by 10%. No comprehensive famine relief programmes, like the ones previously implemented by the Mughal rulers were put in place. Rice was only stockpiled for company soldiers.

The EIC was a corporation, after all, whose first responsibility was to maximise its profits. They did this at an extraordinary human cost for the Indian people.

18. In 1857, the EIC’s own army rose up in revolt

After sepoys in a town called Meerut mutinied against their British officers, a full-scale rebellion broke out across the country.

The sepoy revolt in Meerut – from the London Illustrated News, 1857.

800,000 Indians and around 6,000 British people died in the conflict that followed. The revolt was savagely suppressed by the Company, in what was one of the most brutal episodes of colonial history.

19. The Crown disbanded the EIC and created the British Raj

The British Government reacted by essentially nationalising the East India Company. The company was liquidated, its soldiers were absorbed into the British army and the Crown would henceforth run the administrative machinery of India.

From 1858, it was Queen Victoria who would rule the Indian subcontinent.

20. In 2005, the EIC was bought by an Indian businessman

The name of the East India Company lived on after 1858, as a small tea business – a shadow of the imperial behemoth it had been before.

More recently, however, Sanjiv Mehta has transformed the company into a luxury brand selling tea, chocolates and even pure-gold replicas of East India Company coins costing upwards of £600.

In a stark contrast to their predecessor, the new East India Company is a member of the Ethical Tea Partnership.


The East India Company began as a joint-stock enterprise incorporated by royal charter established a trading monopoly with East Asia, Southeast Asia, and India and became progressively involved in both domestic and international politics. It played a vital role in securing Britain's hegemony over maritime shipping and was instrumental in the foundation of the British Empire in India. With settlements in the Indian coastal cities of Bombay, Surat, Calcutta, and Madras, the Company exported cotton and silk piece goods, indigo, saltpeter, and spices in exchange for bullion, eventually expanding its trade to the Persian Gulf, parts of Southeast Asia, and East Asia, including China, in the nineteenth century. Merging in 1708 with its main competitor to form an exclusive monopoly, the Company was run by twenty-four directors elected annually by a Court of Proprietors, who also exerted powerful influence in the British Parliament.

In India the Company obtained a Mughal charter of duty-free trade (1717), and invested heavily in local manufacture, especially textiles, operating from Fort William, Calcutta, and Fort Saint George, Madras, on the eastern seaboard. Company servants became involved in lucrative internal and coastal trade for their own private investments, leading to friction with local authorities. In Bengal, private trade in salt, betel nut, tobacco, and saltpeter the fortification of Calcutta and connections with indigenous traders ill-disposed toward the Nawab (Sirajud-Dawlah, c. 1729–1757) resulted in conflict, Robert Clive's (1725–1774) victory at the Battle of Plassey (1757), and the installation of "puppet" rulers. One of them, Mir Kasim, (r. 1760–1763) protested the flagrant abuse of trading privileges by Company servants, which led to the decisive Battle of Baksar (1764) in which Kasim, the Nawab of Awadh, and the Mughal emperor Shah Alam II (r. 1759–1806) joined forces, only to be routed by the Company's superior Bengal Native Army. The Mughal emperor, in exchange for a yearly tribute, made the Company the collector (Diwan) of revenues of Bengal, Bihar, and Orissa, an annual gain of approximately £6 million, which solved its investment and currency problems. However, revenue collection proved difficult and administrative negligence coupled with drought led to crop failure and the famine of 1770, in which millions perished.

In southern India the East India Company was involved in a protracted military and diplomatic contest with the Marathas, the Nizam's dominion of Hyderabad, kingdom of Mysore ruled by Hyder Ali (1722–1782), and the French. The Company was successful in stalling the French, who were led by François Dupleix (1697–1763), but the conflict escalated during the Seven Years' War (1756–1763) leading eventually to an end of the French challenge at Wandiwash (1760). Soon after, both Arcot and Tanjore came under indirect British rule. Mysore provided stiff resistance until the defeat of Tippu Sultan (1749–1799) in 1799. The Marathas, divided into various ruling houses, their forces depleted by the confrontation with the Afghans (1761), finally succumbed to the British after 1803. The Sikhs of Punjab were humbled in the 1840s and other princely states accepted the suzerainty of the Company, which had emerged as the most formidable fiscal-military state in the subcontinent.

Company affairs, especially mismanagement in Bengal, led to parliamentary inquiry into Indian affairs. Through the Regulating Act (1773) and Pitt's India Act (1784) a Board of Control responsible to Parliament was established, ending the undue influence of shareholders in Indian policy. Warren Hastings (1732–1818), the first governor-general of India (1772–1785), sought to restructure the fiscal and military affairs of the Company, but was charged with corruption by Parliament (led by Edmund Burke [1729–1797]), impeached (1788), and much later acquitted. Significant changes took place in British India by the early nineteenth century: the revenue system was restructured with new property rights vested in land marketplaces, custom, and police were overhauled an extensive cartographic survey of India was initiated a new civil service trained at Haileybury College was put in place strict limits were placed on all concourse between Britons and Indians English education was gradually promoted and modern technologies, including railways, steamships, and the telegraph, were selectively introduced.

In the aftermath of the loss of the American colonies, India under Company rule had emerged as a cornerstone of imperial Britain, although as a dependency and not a settler colony, a fact that possibly restricted the direct impact of the Indian imperial venture on British domestic politics. Under the Company Raj, Indian manufacturers declined in the nineteenth century, making way for a vast, largely dependent market for Britain's industrial output. In 1813 the Company forfeited its commercial monopoly, although it remained as the administrative agent in India till the Sepoy Mutiny and popular uprisings of 1857: a brief debacle for British rule in India that set the stage for direct Crown Rule.


The Dutch and English East India Companies followed in the footsteps of the Portuguese merchants in Asia and learned from their experiences. Adopting the model that the Portuguese had successfully pioneered, the VOC created a string of "factories," fortified trading posts defended by garrisons, from Java to Japan and from Persia to Siam. These posts were linked by a regular exchange of information and commodities. The EIC established its own factories across a more limited area.

The EIC and VOC were not the first companies to enjoy national monopolies, but as chartered companies they did display some novel features. Investment in long-distance trade was no longer limited to overseas traders, as had been the case with regulated companies such as the Turkey Company, but the charters allowed domestic merchants to take part as well. What is more, the chartered companies evolved into joint-stock companies. This meant that shares were freely alienable and merchants no longer raised capital for one voyage, but created a permanent capital committed to the enterprise. Long-term considerations thus determined marketing policies. Nor was the working capital of the companies limited to their capital stock, since both resorted to the capital market to finance their operations.

A sound commercial policy underlay the VOC's remarkable performance. By minimizing its dependence on markets that it did not control, and becoming the largest buyer and seller, the company drastically reduced its risk. Success did not come overnight, but took decades to achieve. The company benefited from the general commercial crisis rocking Southeast Asia in the mid-seventeenth century, just as the Dutch partly owed their commercial hegemony in Europe to the prevailing regional political and economic crises. Yet the VOC was not universally successful. Its huge overhead costs proved detrimental when competing with Indian traders who operated at low cost and could accept a lower profit margin.

Military expenditures were one factor that raised overhead costs. From the outset, the VOC used force to further its objectives vis- à -vis Moluccan natives, Indian merchants, and Portuguese and English rivals to secure footholds, preempt foreign European settlement, and obtain spice monopolies. Superior military strength enabled the Dutch to conquer the spice islands, seize Portuguese forts, and oust the EIC from the Indonesian archipelago around 1623, the year in which the Dutch governor had ten English nationals tortured and executed. This "Amboina massacre" was a popular English propaganda tool against the Dutch in the years to come. Other noneconomic means helped the VOC to achieve near-total control of the production and marketing of nutmeg, mace, and cloves by the late 1660s. Clove production was, for instance, restricted to the island of Amboina, and trees and surplus stocks were destroyed. The spice monopsony, which enabled the VOC to fix prices, left the company with huge profits. By contrast, pepper remained elusive, since it was cultivated over a vast area. Besides, local princes did not always honor their agreements.

For lack of sufficient financial means, the EIC operated in the shadow of its Dutch counterpart for most of the seventeenth century. Its directors, however, made the best of the EIC's removal from the Spice Islands by concentrating operations on India, where the VOC's presence was small. While the VOC achieved some of its original aims, the EIC proved masterful in reinventing itself. In the eighteenth century, it discovered the marketability in Europe of Indian cloth and Chinese tea. In military matters, the EIC underwent a similar metamorphosis. Founded not as a war instrument like its Dutch rival, its fleets were relatively poorly equipped and offensive actions against Asians or Europeans virtually impossible. However, the company's new charter of 1661 stipulated that it could make war or peace with non-Christian princes or people, and very gradually, a more assertive line was adopted, in particular on the Indian subcontinent. By the 1760s, the EIC may be said to have assumed the role of a nation-state in India. It is debatable whether this expansion was based on a master plan, or whether the company was sucked into local power politics. The theory of reluctant imperialism has also been applied to the VOC, which was unable to achieve its objectives on Java without involving itself in a complex indigenous power struggle.

Wherever the chartered companies conducted a profitable trade, fellow nationals tried to benefit as interlopers. Exchanging goods from one part of Asia in another, EIC factors and private individuals carved out a niche for themselves. Although the EIC initially forbade such trade, considering those involved as rivals of its own intra-Asian trade, the costs that it entailed made the company withdraw from the trade, and its attitude toward the inter-lopers changed accordingly. "Free" merchants could begin to settle in port cities under English rule, after the EIC issued a series of indulgences, starting in 1667. Subsequent English commercial success in Asia cannot be understood without taking into account private "country trade." The VOC showed no such lenience, despite a statement by the secretary of its largest regional body, the Amsterdam Chamber, in the 1650s that intra-Asian trade were better left to private traders, whose overhead costs were modest compared with the company's, with its heavily armed ships. Not until 1742 did the VOC allow breaches in its monopoly. On the other hand, company employees enriched themselves by conducting private trade side by side with official company trade. Fraud and corruption were rampant in the Dutch factories.

In intra-Asian trade, the Portuguese had shown the way. Their country trade was more important than their trade to Europe. Like the Portuguese and the English private merchants, the VOC became active in this trade. Between 1640 and 1688 the Dutch company procured substantial amounts of Japanese silver and Taiwanese gold for the purchase of Indian textiles, which were then exchanged for Indonesian pepper and other spices, although some were sent to Europe. Most pepper and other spices were also sold in Europe, but a certain percentage was invested in Persia, India, Taiwan, and Japan. The profits made in the intra-Asian trade paid for Asian products, the sales of which in Europe yielded more than the dividend that the VOC paid to its shareholders in this period. The company's role in intra-Asian trade was eroded in the last quarter of the seventeenth century, when Indian merchants emerged as serious rivals in the trade to Java, Sumatra, and the Malay Peninsula. In addition, Japanese authorities curbed Dutch trade, effectively ending the VOC's role as chief supplier of precious metals in various Asian markets. Still, while the English became the main nation involved, the VOC easily remained the leading European company participating in intra-Asian trade.

What was the relationship between private trading companies and the home governments? Local magistrates were closely connected to VOC affairs in the United Provinces. They elected the directors of the regional chambers from among the principal investors. The States-General, for its part, had not only delegated sovereign powers to the VOC at the company's inception, but financially supported it afterward in time of need. This aid proved crucial in the VOC's early years, enabling the struggling company to make long-term investments in infrastructure and in military, maritime, and commercial affairs, which eventually paid off. The British government, on the other hand, arbitrarily exploited the financial resources of the EIC on several occasions. At the same time, it grew increasingly alarmed about the way the EIC conducted itself in India. Concluding alliances and treaties with native princes, and leading territorial expansion, the company resembled more a sovereign state than a trading company. Warfare was also thought to cut into profits from Asian trade, which was supposedly the company's chief business. The Dutch also debated the advantages of territorial expansion, but here it was the VOC's central board, not the States-General, that challenged the wisdom of company employees on the ground in Java.

Both companies contributed to national prosperity by employing thousands, stimulating the domestic shipbuilding and textile industries, and offering investment outlets. British financial leaders became involved in the EIC, while company men advised the British government on financial affairs. No such systematic crossovers occurred in the Dutch Republic, not even when the VOC faced serious financial problems in the second half of the eighteenth century. The fourth Anglo-Dutch War (1780 – 1784), in particular, had disastrous financial consequences. The curtain finally came down for the VOC following the French invasion of the Dutch Republic (1795). On 1 March 1796 a Committee of East Indian Trade and Possessions replaced the company directors. The EIC did not emerge as the great beneficiary of its rival's demise. Not only had the French and Danish East India Companies emerged as competitors, the home front grew increasingly critical of the company's moral and economic record. In 1813 the British government stripped the EIC of all its monopolies, except for the tea trade with Canton, and in 1833 all company trade ceased. After the Great Rebellion in India (1857 – 1858), the British state assumed the company's affairs.

British Influence Spread Across India in the 1700s

In the early 1700s the Mogul Empire was collapsing, and various invaders, including Persians and Afghans, entered India. But the major threat to British interests came from the French, who began seizing British trading posts.

At the Battle of Plassey, in 1757, forces of the East India Company, though greatly outnumbered, defeated Indian forces backed by the French. The British, led by Robert Clive, had successfully checked the French incursions. And the company took possession of Bengal, an important region of northeastern India, which greatly increased the company's holdings.

In the late 1700s, company officials became notorious for returning to England and showing off the enormous wealth they had accumulated while in India. They were referred to as "nabobs," which was the English pronunciation of nawab, the word for a Mogul leader.

Alarmed by reports of enormous corruption in India, the British government began to take some control over company affairs. The government began appointing the company's highest official, the governor-general.

The first man to hold the governor-general position, Warren Hastings, was eventually impeached when members of Parliament became resentful at the economic excesses of the nabobs.

The East India Company starts causing trouble

Written into the East India Company's charter was a provision that allowed it to mint its own money (pictured above), acquire territory, build forts and castles, raise armies, and "wage war" if it was in the interests of Britain and the Company. And naturally, that was all deemed to be in the interests of Britain and the Company, so it's not like its officers were especially shy about using the tools that the crown had given them.

According to History Today, in the early days of the Company, India was ruled by the Mughals, a fabulously wealthy dynasty that was open to trade but had all these pesky ideas about taxation, trading with non-Company traders, and you know, having authority in their own lands. So in 1686, the Company got permission from James II to sail 19 ships from London to India and show the Mughals who was boss. They ended up stuck in a four-year war that ended with an embarrassing defeat. The fleet was scattered, officers and soldiers were taken prisoner, and an army of Mughal soldiers large enough "to have eaten up all the Company's soldiers for breakfast" poured into the Company's Bombay fort. But then, inexplicably, the Mughals decided to let the British stay in India because, you know, they were subdued now and might one day become allies. Ha.

East Indies Trade Fueled Consumer Culture 

Before the East India Company, most clothes in England were made out of wool and designed for durability, not fashion. But that began to change as British markets were flooded with inexpensive, beautifully woven cotton textiles from India, where each region of the country produced cloth in different colors and patterns. When a new pattern arrived, it would suddenly become all the rage on the streets of London.

“There’s this possibility of being ‘in the right style’ that hadn’t existed before,” says Erikson. 𠇊 lot of historians think this is the beginning of consumer culture in England. Once they brought over the cotton goods, it introduced this new volatility in what was popular.”

The East India Company and its legacy

The East India Company was in existence for over 250 years – from 1600-1858. It was the biggest corporation in world history.

Largely forgotten in the UK, it was responsible for the opium wars with China, it contributed to devastating famines in India, and was a perpetrator of cruel employment practices in Bangladesh and other British colonies.

Not suprising then, that the memory of the East India Company is very much alive throughout India and the far east, where it is a byword for exploitation and oppression. Its story holds important lessons about the dangers of the overweening power of large corporations.

In this podcast, Nick Robins, author of The Corporation That Changed the World: How the East India Company Shaped the Modern Multinational talks to Jane Trowell of Platform, an organisation that uses art, activism, education and research to work for social and ecological justice. They have been working together on projects around the legacy of empire for Britain in the 21 st century.

They met up in the National Maritime Museum in London, where the Trader’s gallery focuses on the history of the East India Company. Jane started by asking Nick to describe how he first came to take an interest in the East India company.

Nick Robins: It is an interesting journey. I have been working in India and Bangladesh, working on issues around fair trade and ethical trade in the textile industry and coming to learn there about the impact of the East India Company particularly on Bengal’s textile industry.

I subsequently came to work in the City[of London], working in socially responsible investment. And I went to find the location of the headquarters of the East India Company on Leadenhall Street. That is where the Lloyd’s Building is now, the glamorous steel and glass building. I was expecting to see some form of plaque saying ‘Here was the site of the East India Company, 1600-1858’. But there was nothing there. We have so many plaques around the city, such an emphasis on heritage for very minor things. In fact, on the site there was a plaque to a postage stamp. And it just struck me as something odd, that there is the biggest corporation in world history, and it has somehow disappeared. So I started doing some research into it, particularly looking at how it was seen at the time, and from that the book came along.

Jane Trowell: For those who do not know that much about the East India Company, why is it such an extremely important fact of life – such an extremely important piece of our business history?

NR: It was founded in 1600. It was a company with shareholders, which had a charter for all the trade between England and Asia. At that time England, in particular, was very much the poor cousin compared with Asia. Traditionally, wealth has flown from west to east in the global economy. Even in the Roman Empire, there were complaints of the flood of bullion to pay for peppers and textiles from the East. Britain was in a very, very poor place and the reason the East India Company was set up was to gain access for this very marginal maritime kingdom of England into the luxury markets of Asia, to get access to spices in particular. So it was very much the supplicant. Very, very small, struggling to get into these big markets, particularly the Moghul empire of India.

And then, gradually over the years, particularly over the eighteenth century through the use of its private armies, it started actually taking control of key parts of India, particularly Bengal. It became a power behind the throne and was not just trading but was engaged in real conquest, in battles. It started with dominating the markets in India, got involved in the opium trade, smuggling opium into China in the first half of the nineteenth century.

It became more and more of a ‘public-private partnership’. It was still a private operation, it still had shareholders, was still paying dividends to its shareholders but was increasingly doing the job of the British state who were standing behind it. Eventually it was wound up in 1858 after what was called the ‘Indian Mutiny’ or the ‘Great Rebellion against the East India Company’.

But one of the things that is interesting about the company is that it continued to pay out dividends for another twenty years or so. So, its actual corporate form extended much longer than its operational life. It paid its last dividend, drawing on the taxes in India, in April 1874.

So it had a very, very long existence from 1600 to 1874, and many incarnations along the route. But probably all the way through its primary purpose was to generate profits for its shareholders and executives.

In that picture it seems like – or could come across as – a great English or British success story. But in fact your book ‘The Corporation that Changed the World’ is a brutal dissection of the company, looking at it from an ethical standpoint, looking at it from a human rights standpoint, and looking at how its own private army was used in the absolute suppression of local democratic control.

NR: If you look back at the company’s record, there are some examples of some really outrageous negligence and oppression, particularly once it had gained a real foothold in India, dominating markets and driving prices down for its goods.

For example, when it controlled Bengal, there was a drought and the company did not intervene. In fact its executives intervened to buy the grain that remained on the market, so driving up the prices. Drought led to famine. It was probably one of the biggest corporate disasters in world history, anything up to seven million people died in that famine.

The Opium War we’ve touched on. The company was the monopoly administrator of opium production in India and smuggled that deliberately, against Chinese laws, into China. So, there’s some fairly extreme examples of corporate malpractice.

As I was writing the book I was conscious and wary of implying twenty-first century values – saying, ‘they do look outrageous to us, but maybe they were not seen as as bad at the time, because of different values and so on’. But what really impelled me to write the book was how contemporaries, particularly back here in England, saw the company’s behaviour and actually did react with outrage and in many ways in disgust to some of the company’s behaviour. So in the book, I try and draw on that, in terms of the poems and the plays and the caricatures that were generated by the culture at the time, in reaction to the company’s behaviour. So, while the company was certainly powerful and a part of the establishment, it was also the subject of cultural criticism at the time. This gave me the confidence to look into it. It was not just looking back at this historical object through twenty-first century eyes but actually drawing on the critique at the time – when some people were saying ‘In future times, people will look back in horror at the East India Company’.

JT: There is, in this country, wilful ignorance about the legacy of that particular company. Unlike some of the slave trade companies, which have been held up for scrutiny in much more rigorous manner. But of course in your travels in China and in India and Bangladesh, you came across a very different story. Because in effect, this is a corporation that ended up ruling a large chunk of the Indian sub-continent.

NR: In India, I think you talk to pretty much anyone about the East India Company’s role – coming to trade but eventually conquering – and it is part of standard education. So everybody will know about it. And when I was talking to textile workers in Bangladesh and mentioned the East India Company, people would say ‘Oh yes, yes. These are the people who chopped off our weavers’ thumbs.’ There was immediately a recognition of the company after they had taken over control of Bengal, and that they were so oppressive, that they chopped off the weavers’ thumbs. I could not find evidence of that in my research, but I found evidence of something probably even more horrific – the weavers chopped off their own thumbs, so they would not actually be forced to weave under the company’s orders.

So this is very close to the surface in India. This year, in 2012, India has passed new laws liberalising the retail sector to allow multinational companies to come in and take majority stakes in retail companies. And immediately, the gut reaction in Indian society is that people were opposing at is to say it is the return of the East India Company. So, it is the motif for talking about companies, the wrong companies.

And in China, in the opium museum in modern Guandong you have the East India Company portrayed there, very powerfully. They have these fantastic full-life tableaux of the company, these opium chests, its logo or chop-mark there, and it is seen that is was the institution which was the driving force behind the opium trade which resulted in the humiliation and the loss of power, the secession of Hong Kong, it is seen that that went on for essentially a hundred years until 1949. So again, when I talked to most people in China about the East India Company and immediately there would be some reaction. Whereas I think in Britain it will be somewhat fuzzy. And if at all, it will probably be linked to consumer articles, to some nice set of teas or whatever.

JT: If you go to the very touristy Twining’s shop on the Strand, which is the original Twining’s tea building, with a very, very small frontage, it is only about three meters across, it is not a wide building, with two, in inverted commas, ‘Chinamen’, reclining on the pediment as if in total happiness with the tea trade, with Britain. These representations, like thousands of others, dominate the landscape. Before we even get into the Foreign and Commonwealth Office and look at the marvellous painting, that you describe in the book, of Britannia receiving riches… what is the exact title of ‘Britannia receiving the riches of the East’

Britannia receiving the riches of the East

NR: Yes, what a picture. Britannia very much in a position of hierarchy and receiving essentially tribute from Indians and Chinese and so on.

JT: And certainly in the context of England and Britain the amnesia about the company is well observed.

Except…. when we were doing our walks and talks and things in Tower Hamlets in East London, where there is a predominantly Bangladeshi community. Because of course, when we talk about Britain we have to talk about who in Britain is conveniently forgetting. And we had some extremely interesting encounters with young people and older people in Tower Hamlets, whose political understanding of their current situation and the situation in Bangladesh was deeply informed by an understanding of what had happened in Bengal, the bread basket of the world at that time under the East India Company.

So again, it is a question, it is a very interesting question, of who we are talking to about this company. Because I remember one young man, I’m not sure I was with you on that occasion, who was thumping the table with grim delight that anybody was trying to talk about this in a political way that was relevant to now. He was an eighteen or nineteen year old, dealing with racism, dealing with unequal opportunity, dealing with family back in Sylhet. It is an interesting contrast between museological world, the white-dominated world of museums, the heritage world that wants to shut it down and the business world, which may want to shut it down – and on the other hand other communities, for whom it is a vital part of reclaiming their history.

NR: Yes, and I think it is one of the interesting things which has happened over the last five years. The history of the East India Company has not changed, it is in the past, it is there. But I think what has changed, certainly in Britain, is the ways in which different communities have encountered that legacy. So, there is a very interesting community organisation in East London, the Brick Lane Circle, which has been working to get young people of all communities and backgrounds and races to actually think about what this legacy of the East India Company means. And actually, in many ways, how you can through encountering it, through confronting it and challenging it, you can actually maybe develop a sense of a shared culture, that is not exclusive. Its not about people with a Bangladesh background having to be interested or share a certain view. But it is a way of saying that because of this company we have a lot of things in common which we have not quite explored. So that is a very interesting thing, a very live thing. A current project of the Brick Lane circle is about how Bengal dressed Britain through it textiles . o again, very good ways of bringing this history to life and showing how these historical connections formed the way we are today.

JT: It has been very interesting, hasn’t it, over the past twelve years or so that we have been working on this on and off together and sometimes separately, to see how different museums and galleries, let’s say in London, have changed or have struggled with how to interpret these histories of trade in Asia – and we could even talk about slavery, even if it is a different subject it is a related subject because those two things are very interwoven economically. Is there anything new – particular moments, particular exhibitions you have seen or have been involved with – where you have seen a shift in thinking?

NR: Yes, certainly in a cultural sense. There have been three exhibitions over the last decade which I think, do pinpoint three different moments for how British society is trying to come to terms with this.

The first was an exhibition in the British Library back in 2000 for the 400 th anniversary of the Company. It was a very romanticised view and in fact, had totally omitted any reference to the opium trade. So you had community protest from the Chinese community here in Britain, very strong, to introduce a proper explanation of the company’s role in the opium trade.

Secondly, the Encounters Exhibition in the Victoria and Albert Museum. I think that had the beginnings of a recognition of the balance of the story.

And now finally here, in the National Maritime Museum, the new permanent exhibition on the East India Company which, I think, is a very good attempt to explain in a popular way the full account of the East India Company – to explain that it was a company and certain parts of it appear properly, maybe for the first hundred years, to be trading and bringing benefit. That it was bringing the benefit of stimulating demand for goods in India, bringing in tax revenues in Britain and so forth. But there was another big part of the story, which was bringing oppression and domination. And I think that the gallery here has attempted ato bring that richness without being too didactic. Hopefully, it leaves the viewer to make up their own mind. But I think it lays out this was a very complex story and the company had strengths in parts of the earlier period, where it did not have this overweening power, but then began overturning existing cultures and really changing the course of economic history so that wealth would flow from East to West, changing that historical flow from West to East.

So I think those are interesting moments, and within only a decade. They show the assertiveness of once immigrant communities now playing their part in the shaping of the public memory of Britain as a whole, particularly the Bangladeshi and Chinese community. It means we have a much richer, more honest, representation of this peculiar institution.

JT: So, we have talked a bit about different communities’ memories.

Now let’s think about business. You know, one of the things about capitalism is it likes to forget (there is some very interesting writing about that in terms of capitalism). But you have deliberately subtitled your book ‘How the East India Company shapes the modern multinational’. Working in the City [of London], you understand the forces at work. How has this book gone down in business communities?

NR: One of the things again I did as I was going into the heart of the matter, was to look at the characters of that time and whose learnings and teachings we still draw on – people like Adam Smith, Edmund Burke, Karl Marx, very different people. Adam Smith was seen as the father of liberal economics, Edmund Burke as the father of political conservatism, Karl Marx leading the communist movement. All, in very different way,s encounter the company in a period from, let’s say, 1770 to 1858/1860. And all are critical, from quite different perspectives.

Adam Smith, was a supporter of free trade but very critical of corporations, particular their monopoly power – both because of the scale issue (he was interested in open markets, so he was obviously against that) but also he was particularly concerned about the shareholder listing point of that, and the tendency towards speculation and abuse. It is interesting going back through Adam Smith’s work and realising that when he wrote his third edition of the Wealth of Nations, he actually went back to his editor and said ‘Look, I want to add another section to the book about the behaviour of corporations because we have this egregious example of the East India Company.’

I suppose when you are talking to a modern business audience, drawing on the reality of Adam Smith and actually placing his views in his time, pointing out that this was one of the big things he was struggling with, then I think you get a more honest response.

Edmund Burk again, a conservative. His reaction to the East India Company, particularly the way it destabilised – threw into turmoil – Bengal society, was similar to his reaction to the French Revolution. He opposed the East India Company because it was revolutionary. It was this revolutionary power, going into India, overturning all the established relations and leading to oppression as a result.

So you have a conservative critique as well as a liberal-economic critique. And then there is Karl Marx. For his purposes the East India Company was an agent or a tool of the British ruling class, which had turned from being the trading class to what he called the ‘moneyocracy’.

So all very different perspectives but all ones that have resonance today. And it helps us to when we are looking at those figures and their ideas, to root them in their realities so they are not abstract.

JT: At the end of the second edition of the book, you itemise, like a manifesto, what could be done or what should be done in light of what we have learned from the East India Company. You give an analysis of what you call a ‘trilogy of design flaws’ – speculative temptations of executives and investors, the drive for monopoly control and absence of automatic calamity for corporate abuse.

You then make a series of recommendations and you talk about some progress one can see in the UK 2006 Companies Act. Can you talk a bit more about how you think those recommendations might play out?

NR: Yes, I think we are looking at the company and what it teaches us about the modern corporation. I looked at four factors.

Firstly, the company as an economic agent. How the financing of the corporation is a powerful factor in determining its behaviour. As we discussed with Adam Smith we need to be very careful about the dynamics of the stock market listing. It is not necessarily intrinsically a bad idea, but we do need to recognise that there are inherent problems about stock market listing and the tendency towards speculation.

Second is the issue of scale – again something brought up by Adam Smith. We have seen recently, in the discussion of too big to fail issues, the problem of the larger the organisation, when things go wrong, the more magnified the problems are.

The third, which we have not really discussed, is technology. How the company deployed its technology – in its case, the technology was particularly its military technology and shipping technology.

And a fourth is regulation. There was a collusion of state power and corporate power in the company’s case. So how can we avoid that, and how can regulation be used to ensure public accountability.

So the recommendations are really around mechanisms through which you can ensure that both shareholders and company management must have the public interest as part of their mandate. So it is not purely the seeking of private good.

You do then have the critical issue of company scale and company size, and a recognition that economic diversity is a value in itself – diversity of size, but also of form. When we look back at the history, Adam Smith was recognising that certain economic forms are useful for certain things. You can have the joint stock company, and there are also partnerships, co-operatives, state companies and so on. And they can all play different roles – so diversity of form and size is important.

And then finally, regulation. We have had a reform in the last few years of the Company Act. In a very British way, the focus of a company is to promote the interest of its members, its shareholders. But, in a reformist measure company directors were asked to consider to take into account the interests of employees and suppliers and communities and the wider environment. To consider but not act. And there, I suppose we have seen it is important that there is more of a recognition that companies need to have that positive requirement to act in the wider interest as well. Those would be three, I suppose, big recommendations around the business side in our times.

So there are many examples, I suppose, where the company was doing the first in so many of these failings of corporate form which for me again, thinking of the history of it, is that the issues that we are facing today are not accidents of circumstances I suppose. That they are things that are more structural and do have patterns through history, which I think means we can address them today with more confidence really.

So moving from the imperial gene to the ethical gene?

That’s right, that’s right. And some people call it the ‘civil corporation’. The company corporation can be a very useful institution, but we really need to think about its design so that it does serve the interest of society.

With thanks to Dianne Prosser at the National Maritime Museum for hosting this discussion.

The podcast was produced by Matthew Flatman and the transcript was prepared by Maarten van Schaik

How did the East India Company change the world?

What comes to mind when you hear the word "corporation?" Maybe a giant, faceless conglomerate? Ruthless captains of industry? Perhaps you think of corporate scandals like Enron and WorldCom. In fact, the unscrupulous plundering done by some modern-day corporations pales in comparison to the activities carried out by one of the world's first corporations: the British East India Company (EIC).

The concept of corporations was first established under ancient Roman law [source: University of Virginia]. But it wasn't until England emerged from the Middle Ages that it created what we recognize as the modern corporate structure. It all began on Dec. 31, 1600, when Queen Elizabeth I granted a charter to the British East India Corporation, naming the corporation "The Governor and Company of Merchants of London, trading with the East Indies." The corporation conducted business in the East Indies (land that we now consider India and the Middle East) at the behest of the queen.

The East India Company established a few major precedents for modern corporations. But it also shaped the world in countless other ways. With both the financial and military support of the Crown, the EIC served as an instrument of imperialism for England. The company had its own private army and raised soldiers in the areas it subjugated. Its expansionism spurred several wars that produced at least two sovereign nations. Among its many claims to fame (and notoriety), the EIC indirectly built Yale University, helped create two nations and was the world's largest drug-dealing operation in the 18th century.

The company was ruthless in its quest for profits. Parliament even called the EIC tyrannical. However, without the EIC, England may have never developed into the nation it is today.

Read on the next page how this giant global corporation was created.

The Creation of the East India Company

When the British East India Company (EIC) was formed in 1600, there were already other East India Companies operating on behalf of France, the Netherlands, Spain and Portugal. Thanks to the naval route that explorer Vasco Da Gama discovered, riches from the Orient were pouring into Europe. With other nations importing fortunes in goods and plunder, Queen Elizabeth decided England should get some, too. So she granted the charter for the East India Company.

Queen Elizabeth used more than just royal decree and coffers (treasury funds) to help merchants and explorers establish trade on behalf of England in the East. The charter she issued created the first official joint-stock corporation. A joint-stock corporation is composed of investors who are granted shares in a company. In return for their initial investments, shareholders are given dividends, or percentages, of the company's profits based on the number of shares the investor holds.

Shares and dividends were not new concepts in England. Twenty years prior to the EIC's charter, Queen Elizabeth was already a major stakeholder in Sir Francis Drake's ship, the Golden Hind. Although it's not certain how much she made from Drake's voyages to the New World, the captain himself made a 5,000 percent return on his initial investment [source: Hartmann].

So a joint-stock corporation like the one Queen Elizabeth formed in the East India Company wasn't much of a financial leap. But it was the first of its kind, and following the establishment of the EIC, its Dutch, French and other competitors followed suit. But granting charter to the EIC wasn't the only part of the prototype for modern corporations that Queen Elizabeth devised.

Under the auspices of her royal authority, Elizabeth also limited the liability of the EIC's investors -- including hers. This made the company the world's first limited liability corporation (abbreviated as LLC in the United States and Ltd. in the United Kingdom). Under an LLC, the investors in a corporation are granted protection from losing any more money than their initial investments in the venture. If the company goes under, the investors only lose the amount of money they put into the LLC. The company's outstanding debts aren't divvied up among its investors [source: IRS].

Queen Elizabeth covered any losses or debts owed by the East India Company with the royal coffers modern LLCs are subject to bankruptcy procedures, where creditors may be forced to take pennies on the dollar or nothing at all if a corporation goes under.

Although it took several decades for the East India Company to become truly profitable, once it did, the company rose to global domination -- both in business and in government. In a symbiotic way, as the company grew in power, so, too, did England. So it's no surprise that during its existence, the company was directly involved in major geopolitical changes: The EIC literally changed the course of history. Two nations, India and the United States, revolted against East India Company rule, which led to the establishment of their current political structures.

Read how the company inadvertently created the United States on the next page.

Dutch East India Company

What was the Dutch East India Company? What was this network that wove its way throughout history, had a hand in almost all 18th century wars, and passed seemingly unnoticed by all?


The Dutch East India Company was a charter trading company established in 1602. It is considered to be the first ever multinational company. It was a huge organization, with a foothold in almost every country, employing more than 200 ships and several thousand men. The Company was notorious for their power plays and harsh dealings.

In 1602 the Portuguese had the largest trade in the seas and, due to a political conflict, they cut off all trade with the Dutch. Soon after, the Portuguese began to have trouble supplying as much product as was needed, causing prices to skyrocket. During this time, Portugal became a good target for the Spanish government to attack. As the Portuguese fell into war, their trade fell, and the Dutch saw enormous opportunity to move in and take over their trade routes.

Dutch East India Company merchant ship
Public domain image

In the 1600’s, trading “companies” were nonexistent. Trading was an individual event at the time of each voyage. The goods brought home would be liquidated on the ship’s return.

These trips were risky to invest in because so many things could go wrong: piracy, shipwreck, disease, or any number of other things. When the Dutch took over, however, they founded an actual shipping company on a much larger scale than anything ever seen before. They purchased ships, signed contracts for long term captains and commodores, and searched for merchants to do their bidding.

The East Indies were more than happy to do business with them because it meant a good deal of money for their government. This Dutch East India Company was the beginning of something massive.

The British East India Company

Soon after, the British saw what the Dutch were doing and immediately recognized the profit to be made. Queen Elizabeth sent a letter to the Dutch government asking to get in on this deal. Another branch, the British East India Company, was created.


Two sides of a duit, a coin minted in 1735 by the VOC. Public domain image.

After joining with the British, the fledgling company decided that they didn’t want any competition and set out to destroy other trading groups. Since they had rapidly grown to be the largest trade on the sea, this was not hard to do.

They went to various governments with the proposition of handling their trade, and threatened them against doing business with anyone else, at the risk of the Vereenigde Oost-Indische Compagnie (or VOC, Dutch for Dutch East India Company] no longer working with them.

It didn’t take much to get a complete monopoly over sea trade. At this point, the VOC completely controlled all supplies in and out of every continent.

Rogue Nation

This much power needed protection, so they began to create their own private army. Living most of their lives on the sea, they realized they did not have to adhere to the laws of any land.

They built their army in all different parts of the world, so they were highly trained in many different fighting styles. They had only the finest war ships built and had their military accompany all their trading voyages to fight off pirates and anything else that might slow them down.

Next they built their own government. They appointed members of the company as their own committee of advisors to make decisions for the company.

Taking Over The World

The shipyard of the Dutch East India Company in Amsterdam, circa 1750. Public domain image.

As time went on their lust for power and money grew. Under the guise of a simple trading company, their empire on the sea went virtually unnoticed as a threat, so no one ever tried to stop them. They got involved in more than one battle, helped shape governments, had a hand in building Cambridge University, and helped create more than one nation, including America, while supposedly working for the British.

How’s that for double dealing?

During their trading, they employed many private tradesmen as well. If any of them double-crossed them, or was even suspected of stealing, the Dutch East India Company was notorious for inflicting unspeakable tortures. They did not quit until they had everything back they had lost, then killed them.

If any country thought about stopping business with them, supplies to that country would cease. Likewise, if anyone tried to open a private trade, the VOC would either prevent everyone from doing business with them via blackmail and threats, or (they were only suspected of doing this) would act as pirates and vandalize their ships and destroy the goods.

As they travelled around the world getting richer and more powerful, they had private spies that were employed to collect damaging information about various countries’ leaders. The VOC would then simply sit on it if they needed leverage later.

They laced themselves throughout all the major wars of their time, masquerading as an innocent trading company, passing unnoticed by all as they spun their web of information, power, and money.


The VOC was in business from 1602 to some point in the early 1800s. In 1796, they began to collect debt and the Dutch government, who had been backing them before, could not pay it off. They finally went bankrupt in 1800, and the Dutch government collected all of the excess debt they left behind.

There has never been a trade empire like the Dutch East India Company since. Some countries, such as South Africa, are still struggling to rid themselves of the violent, cruel legacy they left behind.

East India Company

At the Express Adda in Delhi last week, writer William Dalrymple spoke about the rise of the right wing across the world, how India has benefited from immigration, the importance of teaching history and his latest book on the East India Company.

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