What Was the British East India Company?

British merchant ships in Calcutta Harbor, probably loading cotton, silks, and spices.
British Ships in Calcutta Harbor, c. 1860. Hulton Archive / Getty Images

Question: What Was the British East India Company?


The British East India Company (BEIC) was a chartered, joint-stock company based in London. British merchants and investors formed the company in order to enter the spice trade in the East Indies (now Indonesia), but actually ended up concentrating its efforts on the Indian subcontinent. Queen Elizabeth I granted the BEIC charter in 1600; it continued to exist until 1874, although it lost power over the British Raj in India in 1858.

The BEIC began as a simple investment mechanism through which merchants and members of the nobility could pool their money and send ships to Asia in search of valuable cargoes of spices, silk, tea, and other goods. Over time, it developed into a quasi-governmental entity in its own right, with control over a large area and a large private army.

The BEIC's ascent to power wasn't entirely smooth. In 1689, the Mughal emperor Aurangzeb sent a fleet to attack the Company's base at Bombay after trade negotiations between the parties broke down. The Mughals sacked the BEIC fort, and in 1690, British envoys had to prostrate themselves before the Emperor and beg his forgiveness for their trespasses so that the BEIC could continue to operate in India.

On June 23, 1757, the British East India Company's army defeated a joint force of the French and the Nawab of Bengal's troops at the Battle of Plassey (Palashi).

The battle effectively ended French efforts to establish trade in India. This victory marked the beginning of direct Company rule in Bengal, which expanded to cover much of the Indian subcontinent over the following century. In some areas, the British formed alliances with local leaders or appointed puppet rulers; in others, Company officials ruled directly.

Some local rulers put up effective resistance to the BEIC's armies. Among the last and most successful were Hyder Ali and his son Tipu Sultan, the Tiger of Mysore, who resisted through four Anglo-Mysore Wars. Mysorean independence finally ended in 1799, when Tipu Sultan was killed in battle.

In the end, Indian soldiers within the BEIC army (called "sepoys") brought down the mighty Company. Sparked by rumors that the new rifle cartridges issued to them contained pork and beef tallow, an affront to both Hindus and Muslims, the Indian soldiers rose up in the Indian Revolt of 1857, which soon spread across India.

Although the BEIC eventually crushed the uprising and exiled the last Mughal emperor to Burma, the unrest was too much for the Home Government in London. In the "Government of India Act 1858," the British Crown assumed control of the Indian subcontinent and the BEIC's armies. Queen Victoria became Empress of India. The Company was relegated to managing the tea trade until 1874, when it was dissolved entirely.