History Optional Paper-1 Solution – 1989: Q.5 (c)

Q.5 (c) Write a short essay on: “The Mughals and the European trading companies.”


The Mughals and the Indian rulers were interested in the development of India’s overseas trade. They wanted it as it would have increased their revenue resources. Therefore, in spite of all odds, the Mughal Emperors and the local Indian rulers, in general, welcomed foreign merchants. However, the Mughals and other Indian rulers were weak on the seas. To ensure smooth sailing of the Indian ships it was necessary for them to align with one or the other powerful European power who were masters of the seas.

So long as the Mughals were strong, the European merchants followed the policy of seeking concessions’through petitions and presents. The Companies also combined trade and diplomacy with war and control of the territory where their factories were situated. With the weakening of the Mughal power, the European Companies started imposing their will on the Indian rulers to get monopolies and concessions. They also took full advantage of the internal conflicts.

The Dutch

The Dutch got favourable response from the rulers of Golkunda. They granted them concessions and exemptions in trade.

The chief feature of the Company’s relation with the Indian rulers was that in spite of getting concessions from the Indian rulers, the local officials constantly used their power to evade the orders and imposed duties on Company’s trade. It frequently resulted in clashes with the local officials.

For trade along the west coast, the Dutch succeeded in getting farman from the Mughal Emperor Jahangir. They were exempted from tolls from Burhanpur to Cambay and Ahmedabad. Shah Jahan also issued two farmans granting them permission to trade in Bengal (1635) and at Surat. In 1638, the Company got another farman from Shah Jahan to trade in saltpetre as well. In 1642, Shah Jahan exempted the Dutch from the payment of transit duties along the Pipli-Agra route. In 1662 Aurangzeb confirmed all the privileges granted by Shah Jahan to the Dutch in Bengal. This was followed by another farman in 1689 by which Aurangzeb permitted all the concessions enjoyed by the Dutch in Golkonda which was shortly occupied by the Mughals. Shah Alam (1709) even reduced customs duty at Swat and Hugli. He also granted total exemption to the Company from paying transit dues throughout the Mughal Empire. But, owing to the hinderances posed by the local officials, the Dutch factors sometimes could not avail of the rahdari exemptions. Similarly, to oblige the local officials, they had to spend a handsome sum. But the Company often misused their privilege of carrying duty-free goods. Instead of carrying their own goods, the Company often helped Indian merchants in evading customs at Hugli. In 1712, Jahandar Shah confirmed all the privileges granted by Aurangzeb in Coromandal. However, the local authorities were not ready to surrender the privileges granted by Jahandar Shah. A major conflict broke out at Palakottu and Drakshavaram in 1725-30, and the Dutch factory was attacked and plundered (1728).

The English

It was during Jahangir’s reign that the first English envoy reached the Mughal court and received a royal farman in 1607. In 1608, when the English established their first factory at Surat. Captain Hawkins was sent to Jahangir’s court for securing trading concessions. Jahangir, initially, welcomed the English envoy and a mansah of 400 zat was bestowed on him by the Emperor. Though in 1611 Hawkins got permission to open trade at Surat, later, under the Portuguese influence, he was expelled from Agra.

The English realised that if they wanted any concessions from the Mughal court, they had to counter the Portuguese influence. It resulted in armed conflict between the two at Swally near Swat (1612, 1614). It bore fruits. The Mughals wanted to counter the Portuguese naval might by joining hands with the English. Besides, they also wanted benefits for Indian merchants who could aspire to gain better profits in case of competition between the foreign merchants. Soon, Captain Best succeeded in getting a royal farman (January, 1613) to open factories in the west coast–Swat, Cambay, Ahmedabad and Goga.

In 1615, Sir Thomas Roe was sent to Jahangir’s court. He tried to take advantage of the naval weakness of Indian rulers. They harassed the Indian traders and ships. These pressures resulted in the issue of another farman by which the English merchants got the right to open factories in all parts of the Mughal Empire. The English success led to an English-Portuguese conflict from 1620 to 1630 to the advantage of the English. After that, the Portuguese gradually lost almost all of their Indian possessions except Goa, Daman and Diu. In 1662, they gave the island of Bombay to king Charles II of England in dowry.

During the closing years of Jahangir’s reign when the English Company tried to fortify their factory at Surat, they were imprisoned by the Mughal officers. When the Company’s rival group of English merchant attacked Mughal ships, the President of the Company at Surat was imprisoned by the Mughals and could only be released on payment of  £ 1,80,00.

In 1651, the English East India Company got a nishan from Sultan Shuja, the son of Shah Jahan, the then governor of Bengal. By this nishan they received trading privileges in return for a fixed annual payment of Rs. 3000. By another nishan in 1656 the English Company was exempted from custom dues. However, after Shuja’s withdrawal from Bengal his successors ignored his orders for the obvious reason that it affected the treasury. But later Shaista Khan (1672) and Emperor Aurangzeb’s farman finally ensured a custom-free English trade.

During Aurangzeb’s reign, there were some changes in the Mughal-English Company’s relations. By this time the English Company with fortified settlements at Madras and Bombay felt more strong. Aurangzeb himself was busy in his Deccan campaigns. Now they could well think of abandoning their role as humble petitioners. By the use of force they could now dictate prices and acquire a free hand in trade. They were planning to establish trade monopoly by gradually driving out all other European powers from competition..

In 1686, the English declared war against the Mughal Emperor and sacked Hugli. However, they were highly mistaken in assessing the Mughal might. Unlike their counterparts in South India, the Mughals were more than a match to a small trading Company. It resulted in the latter’s humiliation. They had to lose all their possessions in Bengal. Their factories at Surat, Masulipatam and Vishakhapatam were seized and their fort at Bombay was besieged. Realising the Mughal might they again went back to their old policy of “petition and diplomacy”. They again turned humble petitioners and agreed to trade under the protection of the Indian rulers.

Soon, the Mughals pardoned them considering the advantage of increasing foreign trade. Aurangzeb granted them permission to trade on payment of Rs. 1,50,000 as compensation. In 1691, the English Company succeeded in getting exemption from the grant of custom duties in Bengal on an annual payment of Rs. 3000.

In 1698, the English king sent a special envoy Sir William Noris to Aurangzeb’s court to secure the formal grant of the trading concessions and the right to exercise full English jurisdiction over the English settlements.

In 1714-17 another mission was sent under Surman who was able to procure three farmans from Farukh Siyar that exempted them from paying custom dues in Gujarat and Deccan as well.

In Bengal so long as Murshid Quli Khan and Ali Vardi Khan remained on the scene, they strictly checked the corruption of any of the privileges granted to the Company. But immediately after their departure (1750s), the Company got an opportunity to intrigue and soon succeeded in defeating the Nawab of Bengal in 1757 at the battle of Plassey.

The French

The French had to face the wrath of the Marathas (Shivaji) as early as 1677. French commander (later Director General of French affairs in India) Martin readily acknowledged the authority of Shivaji and agreed to pay him an amount in lieu of a licence to trade in his dominions. In 1689, the French got the permission to fortify Pondicherry (from Bambhaji).

The French also succeeded in getting a farman from Aurangzeb as early as 1667 to open their factory at Surat. In 1688 the Mughal Emperor Aurangzeb, ceded Chandranagore village to the French. The French maintained close ties with Dost-Ali the Nawab of Carnatic. On the basis of a strong recommendation by him the Mughal Emperor Muhammad Shah issued a farman granting permission to the French to mint and issue gold and silver currency bearing the stamp of the Mughal Emperor and the name of the place of minting.

A change in the political situation in South provided the French with an opportunity to interfere in the internal affairs of Indian rulers. Chanda Sahib, (son-in-law of Dost-Ali, Nawab of Carnatic) had to face the wrath of the Marathas which compelled him to seek the French help. Mughal Emperor Muhammad Shah on hearing about the successful French resistance to Marathas, granted M. Dumas the title of Nawab and bestowed upon him a mansabs of 450012000. The French involvement in the affairs of the principalities of South India ultimately resulted in Carnatic wars and the defeat of the French.

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