Over the next decades, as the Company continued to grow—not in a steadily ascending curve of imports, exports, and revenues, but in fits and starts, of boom years followed by ones with lost or pirated cargo—it garnered broader diplomatic and political support in London as well as presence on the Indian coast. Oliver Cromwell renewed the Company’s charter in 1657, during the short-lived republican Commonwealth of England, and extended its power to fortify and colonize any of its establishments, and to bring settlers, goods, and ammunition to them. In 1661, within a year of the House of Stuart’s being restored to the throne, the Company, granted Charles II, “shall and may, from henceforth for ever … into the said East-Indies … Trade or Traffick.”
The Company completed 404 voyages to the East Indies in the three decades between 1658 to 1688.9 By the end of the seventeenth century, it had established and fortified three main coastal bases in India: the presidencies of Calcutta in the northeast; Madras, some 850 miles to its south; and, on the west coast, Bombay (today called Mumbai). Bombay was not conquered but rented for £10 in gold a year from the cash-strapped Charles II, who had received it in his wife’s dowry. These, although just a trio of spots along the considerable coastline, with a vast interior between them, were a solid start.
The following century was relatively peaceful and focused on trade. Business was steady and so were dividends. “Though commercially astute, the Company’s servants were not trained for politics or war,” wrote the celebrated Delhi-born novelist Ahmed Ali.10 At first they kept away from those twin distractions. But by the mid-eighteenth century, that changed. The Company’s expanding riverside Fort William in Calcutta made the young nawab of Bengal, Siraj-ud-Daulah, suspicious. “You are merchants, what need have you of a fortress?” he demanded.11 When the British ignored him, the nawab marched on the city and, in 1756, managed to briefly occupy it. While unable to expel them from Bengal, the nawab drew British public fury with the infamous Black Hole incident, in which a large (and still-disputed) number of British were jammed into the fort’s small prison and, by morning, nearly all of them had suffocated.
In 1757, a Company force of a thousand British soldiers and two thousand sepoys—Indians, largely from the country’s traditional warrior or soldier castes, trained and uniformed into a disciplined army—led by Robert Clive retaliated and defeated the nawab and his much larger (though largely unpaid and disgruntled) army of fifty thousand soldiers and five hundred war elephants12 in the mango groves of Plassey outside Calcutta to claim the richest and most fertile province in the empire. It was a massive catch. The eminent Raj scholar Lawrence James speculates that Bengal had a population of perhaps 40 million, or about four times that of Britain.13 On the nawab’s throne, the Company placed Mir Jafar—a leader who had switched sides with his soldiers to join Clive—and dictated to him the terms of the treaty, which provided, not surprisingly, a windfall. The Company made a tidy £2.5 million. The British officers took over £1.25 million, with Clive getting £234,000 of the bonanza,14 plus a piece of property in Calcutta that brought him £27,000 a year in rent. Clive sailed home in 1759 some £300,000 richer. It was the greatest fortune ever made by an Englishman in India, and an especially staggering amount for a man who had gone out to India at nineteen on a modest salary of £5 per year—a trip he had to pay for himself as well as cover the expenses during the journey. At thirty-three, Clive had suddenly become one of the richest men in Britain.15
The Company soon reaped even larger rewards. In 1765, it dramatically improved its financial stake when it was awarded the diwani of Bengal, Bihar, and Orissa, gaining, in exchange for a tribute to the emperor in Agra, rights to collect tax revenues. (The tribute part of the deal did not last long. Warren Hastings, India’s first governor-general, soon canceled it.)
The significance of Plassey only became fully evident in hindsight. If Surat was the kernel of the British rule in India, Bengal and its tax revenues became the solid foundation toward gradual rule of the entire subcontinent. The East India Company’s private army ballooned over the next half century from 18,000 to 154,000 by 1805, “far beyond the needs of self-defense,” as one modern historian put it.16 Or of merchants. As the Mughal Empire slowly declined, the East India Company moved into its place.
The Company began by looking for nutmeg, clove, cinnamon, and pepper and, in doing so, grew into the most powerful commercial company ever to exist. It established global cities such as Calcutta and Bombay as well as Singapore and Hong Kong and shaped and governed much of the Indian subcontinent. At one time, it employed a third of the British workforce, controlled about half of world trade, and had the largest merchant navy in the world. It moved from a mercantile organization—the standard-bearer of what Karl Marx labeled Britain’s “moneyocracy”—to being the main political and military power in South Asia. Ahmed Ali likened the new character of the Company, once well versed in both politics and war, “to that of war lords.”17
But if spices were the Company’s initial commercial impetus, tea became the locus of its financial success, and the cornerstone of its trade strategies.
The Company began by importing tea from China using intermediaries. Its first chest, in 1664, was shipped via Bantam, Java, and classified alongside “rarities of birds, beasts or other curiosities … fit to present to His Majesty,”18 Charles II, though most likely destined for his tea-drinking Portuguese wife. A similar negligible amount followed two years later. In 1669, the East India Company brought its first significant order of 143½ pounds from Bantam. A load of nearly five thousand pounds of tea in 1678 flooded the market for the next few years.19
As imports increased, the Company soon wanted to buy directly from the Chinese. In 1689, it made its first purchase of tea from the port of Amoy.20 Initially limited, quantities shot up within a few decades and surpassed 1 million pounds by the early 1720s. In 1750, the East India Company’s annual imports of tea equaled nearly 5 million pounds, and in 1766 hit 6 million.21 Because of the high taxes levied on tea in Britain, another 4 to 7 million pounds was being smuggled in illegally.22 Dutch and French ships carried some of the contraband that made its way to the English coastline via the Channel Islands, but it was also transported on the Company’s own vessels by officers using their allotted cargo space.
A significant amount was sent on to the American colonies, which by 1760 were brewing tea from more than 1 million pounds of leaves a year.23 Taxes on the tea became the focus of colonial anger, which culminated in the 1773 Boston Tea Party, when protesters dumped some ninety thousand pounds of tea into the harbor. This led to rebellion and ultimately to the colonies’ declaring independence in the face of corporate and governmental greed.
Even with the taxes and high transport costs, tea was the Company’s most important commodity. At the end of the eighteenth century it was more profitable than all other goods combined, accounting for 60 percent of the company’s total trade. (It had also become the most profitable item on a London grocer’s shelf.)24 British demand seemed insatiable. In 1800, the East India Company sold a staggering 25,378,816 pounds of it.25 During the 1809–10 trading season, tea accounted for sales worth nearly £3.5 million. That same season, spices totaled just £150,000, or about 4 percent of tea’s amount. In 1817, tea imports topped 36 million pounds.26