In the history of the world there is no more wonderful story than that of the advent of the British Empire in India. It was not the consequence of deliberate design. The early English settlers on the coasts of India thought only of protecting the small tracts of territory passed over to them against hostility from native princes and European rivals. For a long time they never dreamt even of questioning the sovereign rights of the native princes who exercised authority in the territories nearest to their ownerships. The instructions, which the agents received on the spot from the directors of the parent Company at home, suggested, that their business was to trade. And to trade advantageously, it was necessary to humour the native princes, to exhibit courteousness and civility, to put away from them all thoughts of aggression. The purpose of the Company was to pay good dividends. Such a result could only be obtained by the maturation of peaceful enterprise.

Suddenly, there came a change in the action of the English agents on the Coromandel Coast. The English had been the third European nation which had sought to open a money-making trade with India, and which, for that purpose, had secured lodgings on her coasts. Of the two nations, which had anteceded them, the Portuguese had declined; the Dutch were declining. The vigour and energy of the race, which inhabits England, was producing, in the rapid increase of the trade, the results, which invariably follow the development of those qualities. A fourth power France, the hereditary rival of England in Europe, however began, under the influence of MM. Dumas and Dupleix, to develop, in an extraordinary manner, the resources of a settlement under very difficult circumstances, on the same coast.

Two years later the position of the two principal European powers on the Coromandel Coast was inverted. The English squadron was absent; the French squadron was on the spot. Dupleix then prepared for his rivals the fate with which they had threatened him. In vain did the English appeal to the Nawab of the Karnatik. That prince, benefited by Dupleix, refused to interfere in the quarrel between the settlers. The result was that, on September 21, 1746, Madras surrendered to the French, and was rapidly occupied by a garrison composed of French troops and of sipahis (soldiers) trained by French officers.

The capture of Madras by the French is an important event in the history of the connection of France and England with India. The effect of the battle was momentous. Never was there fought a more decisive battle, a battle more fraught with consequences.

There can be no doubt but that the result of the battle gave birth in the mind of Dupleix to ideas of conquest, of supremacy, even of empire, in Southern India. After the lapse of a few years the European nation which inaugurated the new system was completely vanquished by its rival. But before that could be accomplished the system had taken a firm hold of that rival. When, in 1756, Robert Clive set out from Madras to recover Calcutta from the hands of Siraj-ud-daulah, he took with him, in addition to his 900 Europeans, 1200 sipahis, natives of Southern India, armed and drilled in the European system. These men formed the core of that glorious native army which, led by European officers, helped their English masters to win Bengal and Bihar from the satraps of the Mughals; to wrest Benaras and the delta of the Ganges from the Nawab Wazir of Oudh; to kick out the Marathas from the North-west Provinces; to establish a frontier on the Satluj; to invade Afghanistan; and, finally, to acquire Punjab. The first flames of the British in India was seen through the eyes of the East India Company, which slowly, but steadily settled in the country with their primary intension to do business with Indian empires.

East India Company was unique as it started its humble beginning as the mere trading company and later took over political interest and changed to the ruler of the entire country. The Honourable East India Company was often colloquially termed as `John Company`. Earlier it was a joint-stock company associated with the Dutch East Indian Company. Queen Elizabeth I granted the Company English Royal Charter on December 31, 1600. The aim of the company was to gain monopoly on entire trading in East Indies. Gradually the Company transformed from a commercial trading association to one that virtually ruled Indian subcontinent and acquired auxiliary governmental and military function until the establishment dissolved in 1858.

The East India Company was in fact the venture of some of the influential businessmen of London who acquired the Crown`s charter for special permission to trade in spices in the East Indies (presently South Asia) and the permission was granted for a period of fifteen years.

The East India Company started with a capital of 72,000 pounds and had 125 shareholders. One Governor and twenty-four directors who constituted the Court of Directors led it. For hundreds of years, the valuable spice trade with the East Indies relied on land routes through Asia and the Middle East. But within the sixteenth century, the advanced navigational technology and skills of the Portuguese enabled Europeans to make a foray in the trade of spices in the East Indies. The Spanish and Portuguese had a monopoly of the East Indies spice trade until the destruction of the Spanish Aramada in 1588, which allowed the British to have a lion`s share in the spice trade side by side with the Dutch.

There is a very interesting history behind the British East India Company`s strengthening its foothold in India. Initially, the British traders had enmities with their Dutch and Portuguese counterparts in the Indian Ocean. The victory of the company over the Portuguese in the Battle of Swally in 1612 brought them in favour with the Mughal Emperor Jahangir. Probably comprehending the pointlessness of waging trade wars in distant seas, the English decided to look into options for gaining a grip in mainland India, with the authorized sanction of both countries i.e. Britain and India. The company appealed to the Crown to launch a diplomatic mission.

In 1615, Sir Thomas Roe was sent by James I to visit the Mughal Emperor Jahangir (who ruled over most of the subcontinent, along with Afghanistan). The reason for this mission was to make arrangements for a commercial treaty, which would give the British East India Company special rights to reside and build factories in Surat and other areas. In return, the Company agreed to provide the emperor with goods and rarities from the European market. This mission succeeded very well.

In course of time ships belonging to the British East India Company arrived in India and docked at Surat, finally establishing it as a shipping spot in 1608. Within the next two years, the company was able to build its first factory in the town of Machilipatnam on the Coromandel Coast of the Bay of Bengal. The lofty profits earned by the Company in the beginning encouraged King James I to grant subsidiary licenses to other trading companies in England. But, in 1609, he extended the charter given to the Company for an indefinite time. Moreover, there was a clause, which stated that the charter would cease by force if the trade became unbeneficial for three successive years. Attempts to set up a factory on the Hooghly River commenced in 1640, but were ineffective until 1690. This settlement later developed into the city of Calcutta.

Within the year 1652 there were around 23 English factories in India. The main factories became the walled forts of Fort William in Bengal, Fort St George in Madras and the Bombay Castle. In 1634, the Mughal Emperor extended his hospitality to the English traders to the region of Bengal (and in 1717 completely removed customs duties for the trade). The company`s core businesses were by now in cotton, silk, indigo dye, saltpetre and tea. Bombay (now Mumbai) came under the possession of the British crown in 1662, and was handed over to the East India Company for 10 pounds a year in 1668. The company had frequent conflicts with foreign contenders. Therefore, as a safeguard, it ultimately accumulated its own military and administrative departments, thereby becoming a regal power in its own right. By 1689, the Company debatably acquired the status of a "nation" in the Indian mainland, autonomously governing the vast presidencies of Bengal, Madras and Bombay.

From 1698 the East India Company acted with the motto to serve under the patronage of the King and the Parliament of England. The employees of the East India Company became so affluent that they established themselves very well on returning to Britain and earned political power too. As a result, the Company developed for itself a lobby in the English parliament. Deregulating act was passed on 1694 to establish the private business of the former employee of the Company in the Land of India. This permitted any English firm to trade with India, unless specifically forbidden by an act of parliament, thereby calling off the charter that was in force for almost 100 years. By an act in 1698, a new "parallel" East India Company was established though it failed to provide any competition for the original company. Both the companies were merged in 1702.

In the subsequent decades there was continuous arguments between the Company lobby and the parliament. The Company sought a permanent establishment, while the Parliament refused to provide it with greater sovereignty. But at this time the battle with France took all the attention away from the business. The war also occurred on Indian soil, between the Company troops and the French forces. Roughly about the same time, the Industrial Revolution took place in Britain. Demand for Indian commodities was heightened by the need to maintain the troops and the financial system during the war. The British East India Company became the single most prominent performer in the British global market, and reserved for itself an unquestionable position in the administrative procedures of the Government. The British victory in the Battle of Plassey in 1757 brought Bengal, and gradually the whole of India under the control of the company. Thus, the East India Company changed its role and became the ruling Authority in India.

Gradually the colonial monopoly of the British East India Company was established in various ways. One of them was the opium trade, especially in Bengal. The colonial monopoly of the British East India Company started with Robert Clive becoming the first British Governor of Bengal. British won over the French in many wars and French were confined only to a few areas. After that no other European rivals could succeed over the British.

However, the British East India Company faced a lot of resistance from the local rulers. The victory of Robert Clive against Siraj Ud Daulah at the Battle of Plassey in 1757 got rid of the last trace of resistance in Bengal. This victory alienated the British and the Mughals, since Siraj had effectively been a Mughal liege ally. But the Mughal Empire was already on the decline after the demise of Aurangzeb, and was collapsing into fragments and enclaves. After the Battle of Buxar, Shah Alam II, the ruling emperor, gave up the governmental rights over Bengal, Bihar, and Orissa. Haidar Ali and Tipu Sultan, the famous rulers of Mysore, also posed a great treat to the British forces. Having sided with the French during the war, the rulers of Mysore sustained their struggle against the Company with the four Anglo-Mysore Wars. Mysore ultimately fell in the hands of the Company forces in 1799, with the killing of Tipu Sultan. With the gradual deteriorating of the Maratha Empire as an outcome of the three Anglo-Maratha wars, the British also got hold of Bombay and the adjacent areas. Thus the British had control over almost all the parts of India except the Mughal Empire, which was also achieved during Sepoy Mutiny of 1857, hundred years later from the battle of Plassey.

There were many acts passed in relation with East India Company like East India Company Act 1773, Pitt`s India Act on 1784, Act of 1786, Charter Act of 1813,1833 and 1853. In the year 1858, the East India Company was dissolved and the British Government took the responsibility of administration of India.