The Arrival of Europeans Trade Companies in India

Sansar LochanHistory of India, UncategorizedLeave a Comment

There were trade and commerce relationship between India and Europe since ancient times. There was great demand for Indian spices like pepper, cardamom, ginger and many other spices in Europe. The trade relationship continued between India, Europe and other Asian countries even during middle ages. The Arab merchants carried the Asian merchandise into Constantinople of Eastern Roman (Byzantium) empire. Italian merchants would buy these goods and then sell in European countries. Like this, Constantinople was the center of international business and considered as the “Gate of European Trade”. While Arab merchants had gained monopoly over the trade in Asian countries, Italian traders had gained monopoly over trade in Europe. The merchandise from Asia had brought good profits to Italian merchants.

The fall of Constantinople

The trade and commerce between Asia and Europe was taking place through the city of Constantinople. In 1453, the Ottoman Turks captured the city of Constantinople. As a result, all the trade routes connecting the city of Constantinople came under the control of Turks. The Turks started levying too many taxes on the goods passing through these routes. Resultantly, the merchants felt that the trade was not profitable. Meanwhile, Spain and Portugal were attempting to break the monopoly of Italian traders. They started encouraging courageous sailors to find a sea route to India. The invention of Compass, Astrolabes and Gunpowder provided further impetus to this venture.

A new sea route to India 

Vaso da Gama, the Portuguese sailor who left Lisbon and reached Kappadu near Calicut on the East coast of India in 1498. By this, he was successful in discovering a new sea route to India. This route continued to be the route of trade between India and Europe for many years. Like this Portuguese were the first to re-establish trade between India and Europe.

Know this :

In 1869, a huge canal was built in Egypt to connect the Red Sea and Mediterranean Sea and it is called Suez Canal. Until the building of Suez canal, the sea route discovered by Vasco da Gama was the route used for the between India and Europe. The ships has to pass the Cape of Good Hope, the southernmost tip of Africa to reach India. The distance between Mumbai and London through Cape of Good Hope is 10,800 nautical miles (1 NM=1.85 KM), it is only 6,200 nautical miles through Suez canal. The journey is reduced to half of distance.

European Trade Companies

With success of Portuguese, many Dutch, French and English arrived at India for trade. This development not only changed the history of India, it also changed the history of European countries.


Portuguese were the first to arrive at India for the trade and were also the last to leave India on the sea route. After Vasco da Gama, Francisco de Almeida arrived in India as the Viceroy of Portuguese. He implemented “Blue Water Policy” in order to establish the supremacy over the Sea instead of supremacy over lands. Alfonso de Albuquerque, who came after Almeida, is considered as the real founder of Portuguese Empire in India. He waged a battle against the Sultan of Bijapur in 1510 and won Goa. Goa became the administrative centre of Portuguese administration in India. The Portuguese has absolute monopoly over trade with India for almost a century and their power declined with the arrival of English and French in India.


Dutch are from Holland or Netherlands. They established United East India Company in 1602 with the aim of doing business with eastern countries and entered countries like India, Java, Sumatra, Indonesia and spices rich islands. They established warehouses in Surat, Broach, Kambe, Kochin, Nagapatanim, Masulipatanam and Chinsor and other places in India. With this they broke the monopoly of Portuguese in India. Later, unable to face competition from English an French, Dutch limited themselves to spice rich islands.

Know this :

The Warehouses were the places of storing merchandise. Huge walls were built around these warehouses to provide protection.


In 1600, December 31, Queen Elizabeth issued a royal charter authorizing East India Company to trade with Eastern countries for fifteen years. The company started the business formally in 1613. The Mughal emperor Jahangir issued a royal permission to English to establish their first warehouse of factory at Surat. In 1617, Sir Thomas Roe arrived at the court of Jahangir as the royal ambassador from the court of James I. He sought permission from Jahangir to establish factories in other places of Mughal Empire. English established factories in Agra, Ahmedabad and Broach. In 1639, English took Madras from the King of Chandragiri and established a strong fort named St. George Fort. Later Charles II, the Prince of England, gave Bombay as an annual rent of ten pounds a year to East India Company in 1668. In 1690, the English purchased three villages namely Sutanauti, Kalikata and Govindapura on the banks of Hugli River and built Fort William. The city of Calcutta grew around this fort. By 17th century, the English had established Bombay, Madras and Calcutta as the centres of their Presidencies. By the later part of Eighteenth century, the English made Calcutta as their capital city. They implemented their own Civil and Criminal Procedure Codes in the areas that were under their control.


French East India Company started as a government owned company in 1664. It started its first factory in Surat in the year 1668. Later they established its factories in Machalipatanam, Chandranagara, Mahe, Karaikallu, Cossimbazar, Balasur. In 1674, the French took Valikandapuram from local Muslim official and developed it as a major trade centre. That centre is Puducherry or Pondicherry. Dupleix, who arrived in Pondicherry as the Governor General of French had the high ambitions of establishing French as the major power in South India. This ambition led to Carnatic wars with English.

The Competition between English and French 

The Portuguese and Dutch had withdrawn from India unable withstand the competition from French and English by 18th century. Finally, French and English restored to show strength in order to establish their political supremacy over India. Meanwhile, political volatility aroused in the regions of Hyderabad and Carnatic (Eastern part of Tamilnadu) and both the English and French tried to exploit the situation in their favour. This led to three Carnatic Wars.

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