The Charter Act of 1813

• The East India Company Act 1813′, also known as the Charter Act of 1813, was an Act of the Parliament of the United Kingdom which renewed the charter issued to the British East India Company, and continued the Company’s rule in India.
• Company’s trade monopoly was continued for a further 20 years. The Company’s charter was next renewed by the Charter Act of 1833.

Background of the Charter Act of 1813:

• The extent of the Company’s territories in India had so much expanded that it was considered to be well-nigh impossible for it to continue as both a commercial and a political functionary.
• Englishmen demanded a share in the trade with India in view of the new economic theories of laissez faire and the Continental System introduced by Napoleon which had closed the European ports to British trade. Hence they demanded the termination of the commercial monopoly of the Company.
  • Napoleon Bonaparte had put in place the Berlin decree of 1806 & Milan Decree of 1807 forbade the import of British goods into European countries allied with or dependent upon France, and installed the Continental System in Europe.
    • These circumstances posed hardships to British traders, and they demanded entry to the ports of Asia and dissolve the monopoly of the East India Company.
  • The free traders had become dominant in British politics and were demanding free access to India.
    • They argued that this would bring capital and skills, and with the establishment of industries and introduction of new agricultural techniques, it would result in development and improvement for India.
• But the East India Company clamored that its political authority and commercial privileges cannot be separated. The controversy was later resolved by allowing all the British merchants to trade with India under a strict license system.
• In 1808 the House of Commons appointed a committee of investigation, which submitted its report in 1812.
• The Bentharnite reformists and the Evangelicals too tried to influence British politics and British policies in India and they gained a decisive voice when the Evangelist Charles Grant was elected to the Court of Directors.
• The Charter Act of 1813 incorporated in a significant way all these aspirations for change in Britain’s India policy.

Provisions of the Act:

• The Act renewed the Company’s charter for twenty years, and during that period it was allowed to have the territorial possessions and revenues.
  • But at the same time the act asserted the “undoubted sovereignty of the Crown of the United Kingdom” over the Indian territories.
  • Thus, the charter act of 1813, for the first time explicitly defined the constitutional position of the British territories in India.
• This act regulated the company’s territorial revenues and commercial profits.
  • The company debt was to be reduced and dividend was fixed @10.5% per annum.
• This act also empowered the local governments to impose taxes on the persons subject to the jurisdiction of the Supreme Court.
• The Company was deprived of its monopoly of trade with India, although its monopoly of China trade and tea trade was left untouched for another twenty years.
  • Subject to these restrictions, the Indian trade was thrown open to all Englishmen.
  • The shareholders of the Company opposed this move though they did not stand to lose much as they were granted a dividend of 10.5% out of the revenue of India.
• The power and superintendence and direction of the Board of Control was not only defined but also enlarged.
• The power of the provincial governments and courts in India over European British subjects was also strengthened.
• Financial provision was made to encourage a revival in Indian literature and for the promotion of science.
  • A sum of Rs. 1 Lakh was to be set apart annually and applied to the revival and improvement of literature and the encouragement of the learned natives of India and for introduction and promotion of a knowledge of the sciences among the inhabitants of the British territories in India.
• This act made provisions to grant permission to the persons who wished to go to India for promoting moral and religious improvements. (Christian Missionaries)
  • Christian missionaries were henceforth to be allowed to enter India, subject only to obtaining a licence either from the Court of Directors or the Board of Control.”
• The Charter Act of 1813 was thus an important benchmark in the push towards westernisation of India.

Lord Minto retired in 1813. He was succeeded by Lord Hastings also known as Lord Moira.