Created in 1600 by Royal Charter to further British interests in the region, the British East India Company encountered fierce competition with Dutch, French and Portuguese commercial interests, which occasionally resulted in outright war between the countries. The company could only achieve success through the elimination of competition from the other European nations. Ambassadors were sent to the Indian rulers to try to acquire agreements for sole trading rights (known as a ‘farman’), but when they were unsuccessful, the execution of power by land and sea became the name of the game. The creation of a network of strategically positioned fortifications started by the Portuguese was continued by the British; a typical example was at Madras (now Chennai), which was taken in 1640 and the four square Fort St George built.
All this, together with the existence of many pirates in these waters, led to the building of a class of powerful ships (known as the East Indiamen) that were operated by the companies. These became the most powerful ships on the high seas for over two centuries.
The Mughal Emperor Farrukhsiyar finally granted a farman to the British in 1716. It greatly assisted the British in taking complete control of India by providing a host of privileges and direct contact with the Emperor. Crucially, it legitimised strong action against anyone who infringed its terms, notably the French who, for a time, competed with the British for political control of India. The French, with their own ‘Compagnie des Indes’ were established at Pondicherry on the Coromandel Coast. Matters came to a head when England and France went to war in 1756. The farman was the justification that Clive needed to embark upon action against the French that secured Calcutta, which had been temporarily lost by the British. It also led to the Battle of Plassey in 1757, a victory that firmly established the British East India Company as the governing authority in Bengal and led to the ultimate creation of an Indian dominion. The rivalry finally came to an end with the British victory over the French in 1763 in the Seven Years War .
Government by “The Company” seems strange to us today, but was doubtless quite logical at a time when nation states were not as clear-cut as they are today. The land masses of Asia were very much geographical areas, delineated by rivers and mountain ranges, where government depended solely upon tribal chiefs, princes or others ruling by force of arms and often grouped in loose and ever-changing alliances. By 1858, the evolution of government of India had changed such that the influence of the East India Company had been dissipated and direct rule from London took place under the auspices of the Secretary of State, who wielded absolute power on behalf of the Queen. There was a Council of India in London, but its role was almost entirely advisory and even the representative on the ground in India, the Viceroy, was himself somewhat powerless in political terms.