Europeans in India Part 7 The Dutch Enter the Fray Section II Commercial Activities – Gujarat, The Coromandel & Bengal

Canberra, 29 January 2023

The Dutch arrived in India and faced great opposition from the Portuguese, who pushed back with force. The animosity was such that they moved on to the Far-East and established themselves in today’s Indonesia. From their base in the archipelago, they made gradual and initially surreptitious inroads into South Asia, initially creating bases in Ceylon (now Sri Lanka) and then moving into the sub-continent proper. Other than in Ceylon, the Dutch commercial activities can be divided into four distinct regional enterprises: Gujarat, Coromandel, Bengal and Malabar.

Gujarat

Gujarat, the region where Gujarati is largely spoken, includes the peninsulas of Kathiawar (called Saurashtra by ancient Hindus) and Kachchh (spelt differently as Kutch, Kutchch, etc). The region came into prominence in Indian history with Muhammad of Ghazni’s infamous raids, starting from 1024 with the initial destruction of the famous temple of Somnath and looting of its immense wealth. However, the marauding Muslim invader never had any plans for permanent conquest and continued invading and looting the wealth of the region now known as Gujarat, mainly from the richly endowed Hindu temples. It was convenient for the Islamic invaders to couch their invasions in the guise of a jihad (holy or unholy? war) against the ‘kafirs’, so that the reality of the raids being purely the progression of their greed and debauched atrocities could be swept under the carpet of collective amnesia brought about by a carefully crafted misinformation campaign, mounted relentlessly for centuries. This ‘whitewash’ of the truth regarding the Muslim raids into Gujarat has been so successful that even today some narratives accept the religious angle of the explanation. The fact remains that there was no religious sanction for the actions of a hard-drinking and depraved army, led by an equally barbarous warlord that committed unmentionable atrocities on the local population.  

Medieval History

Gujarat was ruled by an assortment of Hindu kings till 1297, when Ala ud-Din Khilji annexed it to the sultanate of Delhi. The governors appointed from Delhi to administer the region, gradually increased their independence till in 1401, Governor Zafar Khan formally withdrew his allegiance to the Delhi sultanate. His grandson assumed the title of Sultan Ahmed Shah and was the real founder of the Muslim kingdom of Gujarat. Ahmed Shah extended and secured his territory, spread Islam within his kingdom, and built Ahmedabad as its capital. The prosperity of the kingdom was based on the export of silk, gold and cotton.

Ahmed Shah’s grandson, Mahmud Begara (Bigarha) came to the throne in 1459 when he was 13 years old and ruled for the next 52 years. He greatly expanded his territorial holding, capturing Champaner north-east of Baroda; overrunning Kachchh and Junagadh; and defeating the sultan of Ahmednagar. Towards the end of his reign, he came into conflict with the Portuguese. In 1509, the Portuguese defeated a Gujarat fleet that was assisted by Egyptian warships at Diu, emphasising their maritime prowess. The last notable sultan of Gujarat was Bahadur Shah (1526–37) who was defeated by the Mughal ruler Humayun in 1535 and fled the country, only to be treacherously murdered by the Portuguese in 1537.

Thereafter anarchy prevailed for slightly more than three decades, till 1572 when Akbar, the Mughal king laid claim to the rich province. The annexation of Gujarat gave the Mughal kingdom its only free access to the Indian Ocean region. The inherent richness of the region made the position of governor one of the most important that the Mughal ruler could bestow on any of his courtiers. Towards the end of Akbar’s rule, the Dutch made their appearance in Gujarat.

Dutch Activities

Surat, situated near the mouth of River Tapti, which flows into the Gulf of Khambat (Cambay), was one of the most prominent trading ports in the western coast of India in 16th century. The Dutch realised its strategic importance vis-à-vis its location and trade connections and decided to make it their main base. They were rivalled by both the Portuguese and the English who were also competing for influence and control of the commerce from Gujarat. However, the Dutch managed to establish their base at Surat and hold on to it against stiff opposition from the other European powers. In 1624, the first Dutch ship sailed direct from Surat to the Netherlands. With Surat as their commercial headquarters for West and North India, the Dutch expanded their activities—opening factories in several cities in Gujarat and Sind and even one in Agra. The Agra factory was closed only in 1720, because of the then-prevailing disturbed local political and security conditions in North India.

The Gujarat famine of 1630–31 imposed a downturn in trading activities, which was restored to near normal by 1635. The merchants of Gujarat, for years restricted by the embargoes imposed by the Portuguese, needing permits (Cartezes) and forced to use Portuguese vessels at exorbitant prices, were ready to embrace any change. The Dutch offered lower rates for transportation with no other restrictions and the merchants came flocking to them. The Portuguese were pushed to the fringes of the trade.

Dutch Profits

At the height of Dutch trading activities from Gujarat, the average profits from Surat exceeded Rupees 640,000/- per annum. Records show that between 1662, when the Dutch were already established in Ceylon and Malabar, and 1670, the profit from the trade in spices alone was Rupees 304,000/- annually. This was 520 percent of the total original expenses incurred by the VOC. From 1688 to 1698, the same profit went up to Rupees 463,000/- an annual average increase of 790 percentage.

The above figures are only indicative of the enormous profits being generated in the India trade for the European countries.

The Maratha Encounter. On Tuesday, 5th January 1664, the Maratha king Shivaji the Great arrived before the gates of Surat. He offered to spare the city from being sacked if the major Muslim merchants of the city ransomed their fellow citizens and the city by handing over a defined amount of wealth. The governor panicked and shut himself in the inner fort and no response was sent to the great Maratha king. Shivaji then ordered his forces to sack the city but did not initiate any action against the Dutch or the English and their factories. Even the foreign accounts of the sacking of Surat by Shivaji Maharaj state that he demonstrated great fairness and humanity in the action. He had ordered his troops to spare all priests and their houses and property. Further, all merchants, irrespective of their religion, known to have been charitable in the past to common people in times of shortages, were spared, with Maratha soldiers being deployed to safeguard their houses. Shivaji collected millions in booty and returned to his capital, Raigarh.

The succession struggle in the Mughal dynasty after the death of Aurangzeb led to a merry-go-round of equally incompetent kings to assume the throne in Delhi. In this confusion, the Dutch profited by acquiring increasing holdings and concessions from the Mughals whose power and influence were waning rapidly.

Decline and Withdrawal from Gujarat

Even though the Dutch made gains during the uncertain period through which the Mughal dynasty was going through prior to their eventual eclipse, the VOC also had started to face challenges that were leading to their own decline in Gujarat. The challenges, issues and reasons for the decline in the fortunes of the VOC were many that, individually and in combination in different proportions, brought the Dutch company to its knees and eventual collapse.

  • Unbridled competition from the English, French and even some freebooters started to reduce the Dutch share of the overall trade;
  • There was a noticeable decline in the demand for spices in Europe with a corresponding fall in the profit margin for all traders, which affected the Dutch more since their overheads had started to spiral upwards;
  • Bombay, under the English had developed into a commercial centre that rivalled the facilities at Surat, reducing the importance of Surat and pushing it to the fringes;
  • The collapse of Mughal dominance and the corresponding rise of Maratha power started to make transportation of trading goods from inland sources difficult and costly;
  • Political instability brought about by the internecine wars between the remnants of Mughal power, the bourgeoning Maratha kingdom and the English East India Company for supremacy in the Deccan and adjoining regions side-lined the Dutch power to being only a part player;
  • Corruption within the VOC officials had reached such an alarming and unsustainable proportion that it became impossible for the company to ensure a steady profit; and
  • There was a general decline in Dutch maritime power, which was most noticeable in the deteriorating naval capabilities of the country.

The decline in naval power projection capabilities had a more than a salutary effect on the stability of Dutch operations in India. In the first half of the 17th century when they had first made in-roads into the Indian Ocean region, Dutch ships had been supreme in design and firepower as well as in their navigational expertise. A century later no improvements had been made in the science of navigation, ship building or in the general maritime profession—the Dutch had been resting on the proverbial laurels that they had won a hundred years earlier.

By 1775, Surat and the Dutch settlements in it were both showing signs of decay. In the Dutch quarters only the director’s mansion and the Dutch cemetery were maintained in good shape, rest of the buildings being in different stages of shabby disrepair. As elsewhere in India, the cemetery was the only monument still standing as a reminder of more than a century of Dutch presence in Surat. The Dutch factory was being run as a private enterprise and defections to the English had become commonplace within the Dutch enterprise.

Within a few years, an English force from Bombay had taken over the castle in Surat and a Dutch attempt to recapture it ended in abject failure—an indication of the powerlessness of the Dutch enterprise. In 1780, the English discovered a plot by the Dutch to recapture Surat with Maratha assistance. They decided to put an end to Dutch presence in Gujarat and expelled all Dutch officials and other personnel from Surat. The Dutch enterprise in Gujarat had ceased to exist.

Coromandel Coast

By the early 1620s, the Dutch were predominant in the Coromandel coast with Pulicat as their central base. They also maintained a strong establishment in Masulipatam where the English were concentrated. In 1627, the Dutch had a disagreement with the Governor of Golconda, under whose jurisdiction the region fell, regarding the grant of a ‘farming’ permit for Masulipatam (Macchilipatanam). They withdrew to Pulicat and blockaded Masulipatam from the sea. The Qutb Shah dismissed his governor and invited the Dutch to return to Masulipatam. The reason for the Qutb Shahi sultan’s action was that the Dutch possessed a preponderance of naval strength that was able to threaten an adversary from the sea without exposing themselves to any significant danger—a capability that no other European power in India could lay claim to at that time.

The Dutch trade from Masulipatam amounted to Rupees 600,000 per year throughout most of the 17th century. In 1660, the Dutch opened a factory in Golconda, whose chief merchant also doubled as the ambassador to the Qutb Shahi king. By mid-17th century the Dutch had established themselves through the length of the entire Coromandel coast, building several factories at—Bimilipatam about 40 kilometres north of Vishakhapatnam; Jaganathapuram, 150 kilometres to the south; Narsapur at the mouth of the River Godavari; Palakollu in West Godavari, which was also the first Dutch factory in the Coromandel; and Masulipatam in the delta of River Krishna. Pulicat controlled Durgarajupatnam north of the Lake Pulicat and the villages of Kaveripak, Kunnatur to the south-west of Saint Thomas Mount and Satyavedu, while Tranquebar (Tarangambadi) was developed as a major trading station. Through negotiated agreements with local rulers, the Dutch exercised some amount a territorial jurisdiction over the above-mentioned villages and ports.

Having defeated the Portuguese in Ceylon by 1660, the Dutch captured Negapatam (Nagapatinam today) and then went on to establish a string of factories all the way to Cape Comorin (Kanyakumari). A ship repair yard was established in Tuticorin, which was a good harbour. By 1672, the Portuguese had no possessions in the Coromandel and were restricted to sundry trading conducted from Goa, which was of no consequence in the overall picture of the Indian trade. The Portuguese era had effectively come to an end.

Dutch Ascendancy

The destruction of Portuguese power that had reigned supreme in the seas for over a century, and their rapid expansion established the Dutch as the predominant maritime power in the Indian Ocean region. They started to be held with a certain amount of awe by the local rulers, who gradually changed their attitude of hostile indifference to one of cordial friendship. The Dutch made use of the confusion that followed the Mughal ruler Aurangzeb’s annexation of Golconda and the Qutb Shahi kingdom to themselves take over Masulipatam. However, the northern Coromandel remained in a disturbed state, holding back the Dutch from making any overtures there. In 1689, the Dutch made Negapatam their chief city, replacing Pulicat as the headquarters.

By the 1670s, the French had also made an appearance in the Indian Ocean region and in 1674, Francois Martin and 60 Frenchmen were permitted to settle in Pondicherry, 136 kilometres south of Madras. They soon became a thorn on the side of the Dutch. In 1692, the Dutch laid siege to Pondicherry and took over the settlement. However, the township was returned to the French in 1697 when the mother countries in Europe signed the Treaty of Ryswick. (The Treaty ended the ‘nine-year war’ between France and Holland)

By late-17th century it was apparent that the Dutch enterprise in the Indian sub-continent was not well-controlled. There was widespread private trading by the company officials at the cost of the company’s profits; misappropriation and misuse of company funds had become endemic; and the senior official were spending lavishly on pomp and ostentatious ceremonies. There was no check on the officials who were a law unto themselves as far as financial shenanigans were concerned. Even so, the profits for the last quarter of the 17th century from the Coromandel group started in the 1670s around Rupees 430,000 and continued to rise each year till it reached a stupendous figure of Rupees 960,000 in 1684–85. It was only in the 1690s that the Mughal annexation of the Qutb Shahi kingdom and the strengthening competition from the English and French, who had both started to increase the number of their bases in the Coromandel, started to impact the bottom line of the Dutch—their profits began to fall. Even though much reduced, the Dutch continued to make a profit from trade in the Coromandel till mid-18th century.

From the beginning of their enterprise in India, the Dutch had always tried to restrict themselves to trade and not take up any responsibilities for the governance of local regions. There is an interesting point to note here. Till the end of Dutch trading in the sub-continent, profits accrued from the regions where they had stayed away from local politics and not been involved in issues of sovereignty—Surat, the Coromandel and Bengal continued to be profitable enterprises till the very end. On the other hand, where the Dutch had taken over local governance, in Ceylon and Malabar, they suffered heavy losses. Their original principle of not interfering in local issues and concentrating purely on trade was obviously a sound one.

Decline and Fall

By the third decade of the 18th century, the objectives and destinies of the European settlements, primarily built to facilitate trade, had started to alter. The activities of the English and French in India reflected their embroilment in Europe, particularly the War of Austrian Succession of 1747–48. The French trading company operating in India rapidly transformed into a political organisation, coveting power and influence in the sub-continent. By this time of changing priorities, in the Deep South of the Peninsula there were three major European settlements—Negapatam with the Dutch, the French at Pondicherry and English ensconced in Madras. Each of these settlements had large Indian populations although they were controlled by the Europeans. England and France had started jockeying for influence and power in South India and the repercussions from the struggle were starting to be felt.

The first blow to Dutch power and prestige in the Coromandel coast happened when the French took over Masulipatam, which had been with the Dutch since 1687. Decay had already set in the VOC establishment in India by this time. The major reasons are many and varied. First, in order to sustain and secure the burgeoning volume of trade, the Dutch were forced to build and maintain ever larger garrisons, which in turn demanded a larger share of the profits to maintain effectively. Second, early in the 17th century, the Dutch naval power had been paramount and the centre piece of their ability to contain competition. Dutch naval power had been a deterrent to competitors. Gradually the Dutch navy had started to lose its edge and its deterrent edge had almost vanished. Competitors and local rulers held no fear for the Dutch anymore. Third, at the beginning of their enterprise, the Dutch were renowned for their astute diplomacy that had facilitated creating advantageous commercial deals. With the march of time this skill sort of degenerated till such times that Dutch diplomacy only meant the offering of bribes and gifts to obtain trade. Fourth, and perhaps the fundamental flaw, the VOC as an organisation lacked flexibility to deal with rapidly changing circumstances. It had become moribund, with the Indian operations being made subsidiary to Batavia. The officials in Batavia demanded and enforced rigid subordination, making the VOC operations in India lose even the little flexibility that it had before. Added to this, the uncontrolled corruption of VOC officers completely undermined VOC’s foundations.

VOC that had been an efficient and immensely profitable trading organisation failed completely in trying to become a colonial power.

The American War of Independence on 1775, coalesced into divisions within Europe—with the English on one side and France, Holland and Spain opposing it on the other. In India, the English were wary of the French and Dutch combining against them. To neutralise the emergence of such a joint threat, the English pre-emptively seized all Dutch settlements in the Coromandel and Bengal. The peace signed in 1783 that ended the American War saw minor adjustments in the territorial holdings in India, but the English did not relinquish Negapatam, forcing the Dutch to return to Pulicat as their headquarters.   

By now the VOC in India was on the verge of bankruptcy and Batavia had started to lose interest in the Indian enterprise as being too bothersome and of limited profit. Gradually, most of the Dutch holdings in the Coromandel started to become derelict with some of them being claimed as personal property by senior VOC officials. Thus, the Dutch enterprise in the Coromandel, which had netted great profits at its zenith, came to an ignominious end.

Bengal

Till the 12th century, the combined region of Bengal and Bihar was a mix of small and large Hindu kingdoms. Then the region was conquered by Muslim invaders, spilling east from Delhi, who annexed the region to the Delhi Sultanate. However, almost from the beginning the governors of Bengal functioned as autonomous rulers, owing only superficial allegiance to Delhi. For the next six centuries, Muslim adventurers ruled the region with only the Mughals exercising control intermittently, till the British took over in mid-18th century.

Portuguese Initiatives

In 1579, the Mughal ruler Akbar gave permission to Portuguese traders to settle near Satgaon. Almost immediately they moved a bit north, built substantial buildings and established a large trading post known as Hugli. As was customary with the Portuguese, their energies were not confined to trade alone but moved into interference in local affairs and proselytization. Not content with the great volume of trade being generated, with no competition, they established a custom house of their own and started to impose duty on tobacco, an important article of local trade. They also engaged in piracy and slave trading. The Christian missionaries, who invariably accompanied Portuguese trading ships, also bought orphaned children for religious conversion.

Information of Portuguese depredations had reached the Mughals in Delhi and when Shah Jahan assumed the throne, he appointed Qasim Khan as the Governor of Bengal with clear instructions to exterminate the Portuguese in the region. Hugli was besieged by Mughal forces on 24th June 1632 and ended three months later with the Portuguese capitulating. 400 of the estimated 1000 Portuguese in the garrison were taken prisoners, transported to Agra, and given a stark choice of conversion to Islam or a life of slavery in abject conditions. Thus ended the short-lived Portuguese activities in Bengal.

Dutch Overtures

The Dutch had reconnoitred the region around 1610, but the disturbed local conditions discouraged the free transaction of trade. Therefore, the Dutch incursion into Bengal was very gradual. Initially the Dutch moved to Cuttack in Orissa and from there Dutch ships sailed to Pippli and Balasore. In 1645, Shah Jahan gave additional concessions to the Dutch through a ‘firman’, a royal order or decree, permitting the Dutch to set up a station near the old and ruined Portuguese settlement at Hugli. The Dutch operated from there till 1656, when they were given permission to build a larger facility at Chinsurah (also called Chuchura in later days) situated on the western bank of the River Hughli. They built a castle there and named it Castle Gustavus. Chinsurah became the headquarters for Dutch trade with the kingdoms in Bengal, Bihar and Orissa.

The Dutch Settlement at Chinsurah

Within the ramparts of the castle that had been constructed, the principal buildings were single-stories, flat roofed and made of bricks. The roofs and floorings were surfaced with a mixture of pulverised stone and a lime-molasses concoction. (This is common practice in East India and keeps the floor cool in the extreme summer heat of the region) A church was built in 1744 and still exists under the care of the Protestant Bishop of Calcutta. The castle had three gates, one by the river and two on the landside to the north and south. The River gate also had a battery of 21 cannons to fire salutes at the arrival and departure of dignitaries, a necessary formality that was observed meticulously in all Dutch establishments.

Of the old Dutch buildings only the church and the Director’s residence survive today. The residence has been renovated and is used as the headquarters of the district police. The only other surviving edifice is Taillefert’s cemetery—so-called because it was opened by Taillefert in 1754. It exists even today, like several other Dutch cemeteries in India, bearing mute witness to the times that the Dutch lorded it over most of Bengal for nearly a century.

Through a ‘firman’ issued in 1662, Aurangzeb permitted the Dutch to lease the villages of Chinsurah and Baranagar, and to build factories at Pippli and Balasore. The Dutch subsequently went on to establish many bases, factories and agencies throughout Bengal (which included current day Bangladesh), Bihar and Orissa.

The Dutch were not the only foreigners attempting to establish strong trading relations in Bengal and its surrounding regions. In 1673, the French established their factory Chandernagore (modern day Chandannagar in Hughli district) and the English founded their base in Calcutta around the same time. Although considerable rivalry existed between the three European powers, the Dutch considerably outstripped the other two in power, influence and wealth, unquestionably being the lead country in trade with Bengal. The Dutch cautiously avoided getting involved in the local politics of Bengal, overcoming difficulties with local officials through careful diplomacy, bribes and occasionally veiled threats. However, it must be stressed that the Dutch seldom employed actual force to achieve trading objectives.

Dutch Operations

The Dutch were particular in maintaining good relations with the Mughal king, the source of their territorial wealth, with senior merchants making regular trips to the capital. It is certain that on each occasion considerable gifts and presents changed hands. By the end of the 17th century there was great demand for opium. The Dutch entered the trade, which was coordinated through Batavia. The Dutch had established a factory at Chapra near Patna, which became their hub for the production of opium. The Dutch traded eight million boxes of opium every year, each box weighing 57 kilograms with the annual profits amounting to one and one-half million rupees.

With such lucrative trade being conducted, it is not surprising that the Dutch governor in Bengal was provided an enormous salary and allowances in addition to a percentage of the profits from the region. The governor lived in immense splendour, adhering to great pomp and ceremony. In an official report, G. L. Vernet, the Dutch director between 1764–70, mentions candidly that he needed a minimum of Rupees 35,000 per annum just to maintain his household. Based on this, the annual income of the governor/director can be imagined. The director was assisted in his governance duties by a council and nominally all decisions were subject to a majority vote. However, the council was only a pliant rubber-stamp to ratify the director’s decisions.

Bengal was the region where the Dutch made maximum profits, mainly from the opium trade. It was also the region where corruption within the officials of the VOC reached its highest levels. Over the years, the factories at Dacca and Chittagong, technically under the control of Chinsurah, but practically independent, had become inefficient, corrupt and not making any profit for the company since the officials appropriated it for themselves.

After their victory at the Battle of Plassey in 1757, the English came into direct conflict with the Dutch in Bengal, even though the Dutch had provided refuge for English women and children during the infamous ‘Black Hole of Calcutta’ episode. (Details of the Anglo–Dutch rivalry and conflict will be provided in a later chapter that deals with the English East India Company) For very similar reasons that led to the Dutch failure in the Coromandel, their enterprise in Bengal also collapsed. From being the most profitable Dutch enterprise in the Indian Ocean in mid-17th century, by 1772 the VOC was on the brink of bankruptcy, while at the same time its officials were amassing wealth. It was said at that time that for every rupee profit that was credited to the company, the official responsible for that profit had to make one hundred rupees for himself before declaring a company profit.

In 1781, Chinsurah was handed over to the English to prevent it from falling into French hands. Although it was restored to Holland in 1817, the Dutch no longer had serious interest in Indian trade and was hardly active on the sub-continental shores. By a treaty in 1824, all Dutch settlements in India, except Balasore (which was ceded in 1846) were handed over to the English. Even so Dutch trade in Bengal could be considered to have ended by 1775, coinciding with the English victory in the Battle of Plassey.

 © [Sanu Kainikara] [2023]
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No part of this website/Blog or any of its contents may be reproduced, copied, modified or adapted, without the prior written consent of the author. You may quote extracts from the website or forward the link to the website with attribution to http://www.sanukay.wordpress.com/. For any other mode of sharing, please contact the author @ (sanukay@hotmail.com)

About Sanu Kainikara

Sainik School Kazhakuttam (Kerala), National Defence Academy 39/A, 108 Pilot's Course IAF, fighter pilot, QFI, FCL, psc, HACC, Voluntary Retirement as Wing Commander. Canberra-based Political and Defence Analyst specialising in military strategy, national security, and international politics. PhD in International Politics from University of Adelaide Executive Masters in Public Adminsitration (ANZSOG) Adjunct Professor, University of New South Wales, Distinguished Fellow Institute For Regional Security (IFRS) Distinguished Fellow Centre for Air Power Studies (CAPS)

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