September 30, 2020

The East India Company V. The British Raj

Ravinder Deol
Reading Time: 5 Minutes

We often get led to believe that the East India Company and the British Raj were the same entity. Though the East India Company and the British Raj were British through and through, they were not similar. One was a private company, and the other was direct rule by the British Crown. Because of complete anarchy, the East India Company - a powerful and private profit-making corporation which built up a private army, paved the way for direct rule by the British Crown. The British Raj transitioned India from one of commercial power to colonial power.

The East India Company (formally registered - Governor and Company of Merchants of London Trading into the East Indies), was a private company founded by John Watts in December 1600. At that time, there were competing East India Companies, notably Netherland's Dutch East India Company. Queen Elizabeth I, granted the East India Company a royal charter - this allowed it to use military power to protect itself from competitors. And, undertake expeditions to the Indian subcontinent. She also granted over two-hundred other companies similar privileges. In 1708, the East India Company merged with a rival to create the United Company of Merchants of England Trading to the East Indies.

The role of the East India Company in India was one of commerce and conquest. In 1640, the East India Company built a trading centre in Madras. It was during this period that they realised that they couldn't compete with the Dutch East India Company in the spice trade. As a result, they diverted their attention to textiles. By 1688, the East India Company had established factories in Goa, Chittagong, Bombay, Madras and three small villages in the East of India. By the 1700s, the East India Company dominated the global textile trade, in the process, amassing a private army to protect its interests. India's wealth rapidly drained into Britain and into Robert Clive's pocket, who after winning the Battle of Plassey in 1757, become the master of Bengal.

By 1785, the East India Company controlled a monstrous empire with a staff of only 159. The rise of the East India Company was in part due to the decline of the Mughals. After the East India Company's victories in the Battle of Plassey (1757) and Buxar (1764), it got granted the Diwani of Bengal - the right to collect taxes. It was at this point, where the East India Company transitioned from being one of brutal commercial power to an impromptu imperial power. Exploiting this power, by 1803, the East India Company had captured Delhi.

The East India Company operated from a small office in London, yet it governed approximately sixty million people. The East India Company founded the cities of Mumbai, Kolkata and Chennai in their modern interpretation. Building upon their victories, the East India Company drove the French and Dutch out of the Indian subcontinent. And, within less than a decade, rerouted the wealth in the East, westward. To protect this monopoly, Sir Josiah Child - governor of the East India Company, conceived the idea to create a private army. At its peak, it had more troops than the British Army - this turned the East India Company into a ferocious authority, governing over India.

The East India Company's demise was engineered by itself. Because of its sociopathic behaviour (parliament called it repressive), the East India Company's commercial monopoly got broken in 1813. The East India Company's army played a prominent role in the unsuccessful Indian Uprising (1857-1858), where Indian soldiers led an armed revolt against their British counterparts. The Indian Uprising gained popularity as a war for Indian independence. Soon after, in 1858, the East India Company was nationalised by the British Crown - the dawn of the British Raj - this was the beginning of the direct colonial rule of India.

After 1858, Great Britain officially ruled India. As a result, Queen Elizabeth became the Empress of India. The control of India got administered by a Viceroy and Governor-General - the first Viceroy and Governor-General of India was Viscount Canning. The Viceroy and Governor-General managed India's affairs from Calcutta until the capital got moved to Delhi in 1912. The British also established Lieutenant-Governor's in each of the provinces to administer more local matters. Affairs of which got acted upon on behalf of the British Monarchy, parliament and controlled British interests.

Queen Victoria had promised that the British government would work to better the lives of Indian citizens. The British gave India railways (tracks increased to 10,000 miles between 1860-1880), tea, cricket and the English language (as of 2020 India is the second-largest English speaking country) - albeit, unintentionally. Yet, famine still ran rampant, killing millions of Indians. The British Raj had intended to increase Indian participation in governance. But, the development of India was not to be at the expense of Great Britain.

The British Crown ruled over the Indian subcontinent until 1947. The British ruled over India throughout World War I and World War II. India contributed much to the British effort. Many of the soldiers recruited for the Indian Army were Sikhs from Punjab. Due to their loyalty, the Sikhs had hoped that they would get the chance to carve out their own country, but history shows otherwise. Some historians claim that the British rule of India was made possible because of how divided Indian society was. The opposing party highlight that it was Britain that fostered those divisions. Across India, Britain forged alliances with local princes. Princes gained from their loyalty to the Crown.

It gets assumed that the British Raj ruled the entire Indian subcontinent. However, the British Raj compromised of two-thirds of modern India. Other areas were under the control of local princes. Research suggests that from 1870-1930, Britain took approximately one per-cent of India's wealth annually - this is less than the French, Dutch and Germans took. And, unlike other rulers, public health and life expectancy did improve under the British Raj. But, as mentioned, famine still ravaged. To continue to govern India, the British needed an efficient civil service. Hence, they invested in education. The British had hoped, in years to come, that these students would govern India for them.

The final period of the British Raj got filled with violence between Hindus and Muslims. The rising tide of violence made administering India challenging, particularly after World War II. One of India's most influential figures, Mahatma Gandhi, played a fundamental role in India's independence. In 1915, before arriving in India, Gandhi had helped lead an Indian nationalist movement in South Africa. By 1920, Gandhi was the leader of the Indian National Congress, calling for independence. In July 1947, Britain's parliament passed the Indian Independence Act. Less than one month later, the India-Pakistan border was to come into effect. This shockingly managed hand-over, resulted in one of the most significant forced migrations of the 20th century, resulting in 200,000 - 2,000,000 deaths. Sikhs suffered the most relative to their numbers.

Often, the picture painted of the East India Company is one of a nonpartisan organisation, which had trading rights with the Mughal and Maratha Empires. But, it's clear to see that tyranny got embedded into its founding. The East India Company showed for the first time in history, and hopefully last that a private company can rule a country. Though the British Raj was far from perfect, it had a better intent. But, even the British Raj, with its vast colonial empire, could not wholly control a country as complex and diverse as India.

We are now in a world where the wealth of the West is drifting East. Today, India is home to many of the world's billionaires. Many of whose fortunes have gotten made through manipulation and influence, not much different from the behaviour of the East India Company. Fortunately, the East India Company has no modern equivalent. The East India Company remains history's most petrifying lesson about the abuse of corporate power - one which is very appropriate to heed lessons from in this era.

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