Europeans in India Part 8 The English East India Company Section IV: Dealing with the Competition

Canberra, 22 March 2023

While continuing to fight a rear-guard action to safeguard their privileges and trade monopoly in the Home Country, the Company was also catering to a second requirement. From the very beginning, the Company had firmly believed that it must have full sway in the country where it was hoping to conduct trade, in this case the Indian sub-continent. A monopoly similar to the one granted in England had to be created to establish successful trading relations. Even though this fundamental belief was kept carefully hidden in the early decades of the English East India Company’s activities in India, by the last quarter of the 17th century, their intentions had become clear, at least to an astute and unbiased observer.

Inevitably, the Indian sub-continent became the theatre of conflict between the European powers engaged in trade in the Indian Ocean region, to determine who would gain dominance over the trade and subsequently of the India itself. Towards the second half of the 17th century a sort of triangular contest developed over the control of Indian trade—initially between the Portuguese and the Dutch, then the Portuguese and the English and lastly between the English and the Dutch—the three major European powers vying for power and influence in Indian Ocean at that time. The Anglo–French rivalry, which would be more virulent than any of the earlier contests, would emerge fully only towards the third decade of the 18th century. The Portuguese–Dutch rivalry has already been described in earlier chapters and the narrative in this chapter will confine itself to explaining the other two of the triangular contests in which the English were one half of the rivalries.

Anglo–Portuguese Rivalry

As detailed in earlier chapters, Portuguese trade with India became a viable commercial enterprise only in the last few decades of the 16th century. The Portuguese frittered away the first half of that century through their intransigence on matters of religion and an inherent and insurmountable ignorance regarding socio-cultural issues that mattered to the local people. Albuquerque, the real founder of Portuguese power in the Indian sub-continent, captured Goa from the Adil Shah of Bijapur, establishing it as the ‘capital’ of Portuguese enterprise in the region. The territory remained in Portuguese possession till it was ‘liberated’ by a newly independent India in 1961.

From their arrival on Indian shores, and later while entrenched in trade, the Portuguese opposed first the Dutch and later the English as these two European countries arrived on Indian shores with the intention of conducting commercial activities. However, the Portuguese laboured under a disadvantage—they were not favoured by the Indian rulers, and the local population, for reasons that have been described in earlier chapters. The one common point of collusion among the Indian rulers was their inherent dislike for the Portuguese—the reasons could be paraphrased as:

• The Portuguese, from the beginning, insisted on having a monopoly on the Indian Ocean trade and wanted to establish their supremacy in the region;
• This demand of monopoly did not take into account the claims of other well-established traders like the Arabs, who had been in the business for centuries before the Portuguese made an appearance in 1498;
• The racist, based on skin colour and religion, underpinning of their behaviour was open and the Portuguese did not even attempt to couch it in an acceptable manner; and
• The Portuguese religious intolerance of anyone other than a white Catholic was open and their zeal to convert everyone was far more than any of the Muslim rulers in the sub-continent, let alone the tolerant Hindus, who instinctively functioned on the other end of the spectrum.

Although these challenges loomed large over them, even for the Portuguese the bottom line was still profit, like for any other trading nation. However, they were unable to create and apply flexible policies that suited circumstances and situations as they emerged, since they were steeped in religious rigidity. This one factor, combined with their inherent ‘hatred’ of coloured people, unravelled their grandiose plans of becoming the unrivalled masters of the Oriental maritime trade. Initially the Dutch, and later the English who followed, kept their primary aim of always creating a profit, in sight. They were both more flexible in their attitude towards trade deals, adapting to local needs as required while adopting a very tolerant attitude towards religious beliefs, especially in the Kerala coast where they encountered almost all the religions of the world. It was not surprising that the Dutch and the English were more acceptable to the local rulers.    

Even so, when the English arrived on the scene, despite concerted opposition from local rulers and the Arab traders, the Portuguese were a force to be reckoned with—they had well-fortified factories on both the west and east coasts of the Peninsula; was in favour at the Mughal court; and claimed ownership and control of the maritime route from Europe to India through the Cape of Good Hope. They were also prepared to fight to maintain their privileges and were not prepared to even share control of the maritime route. At the height of their power and influence, other than the fortifications that they owned on both the west and east coasts of the Peninsula, the Portuguese controlled the port of Aden at the entrance to the Red Sea and Ormuz in the Persian Gulf, were in the process of establishing factories in Bengal, and had initiated processes to expand holdings in the islands to the East.

The Portuguese in the Eastern islands and the archipelago were dealt with by the Dutch and the events that led to their expulsion are superfluous to this narrative other than in an indirect manner, and is only touched upon, whenever they are seen to be of value to this account. In the Indian sub-continent, especially in the West Coast, the English had to face up to the established power of the Portuguese.

The English ‘Factors’ in Bantam and Moluccas reported that Indian ‘calico’, a term that came to be used generically to denote cotton cloth, was in great demand and was a profitable exchange for spices. Since cloth production was by then concentrated in the Gujarat–Kathiawar peninsula, the English established their first factory in Surat in 1608. This factory also represents the first attempt by the English to establish a semi-permanent arrangement for trade with India.

Calico: a term used in English from the beginning of the 1500s, to denote a heavy, plain–woven textile made from unbleached and at times not fully processed cotton. The finished fabric is much coarser than the fine muslin, but thinner than canvas and denim. It is relatively cheap because of its coarse nature and normally being undyed, giving it an unfinished look. The fabric was originally from Calicut (hence the name) made by traditional weavers called ‘caliyans’. The raw fabric, when dyed and printed in bright colours were called Calico prints, which became very popular in Europe.  

Portuguese Offensive and Debacle

Towards the end of the first half of the 17th century, English diplomacy started to bear fruit, gradually getting the better of the Portuguese who had so far been influencing decisions in the Mughal court. In addition, the Portuguese could also see that their power and influence were in decline with local rulers opting to trade with the Dutch or the English. Exasperated by the turn of events, they decided to increase offensive actions against the English. The Portuguese found it ‘wrong’ that the English had established themselves securely in Surat in a short span of time and that they were in the process of spreading their influence to other parts of the sub-continent.

In 1620, the Portuguese blocked two English ships proceeding from Surat to Persia forcing the ships to return to Surat. The English reinforced the ships and sailed again, attacking the Portuguese squadron attempting to blockade Surat. The ensuing battle was indecisive, and the Portuguese returned to Ormuz, their stronghold in the Persian Gulf. This was the beginning of a prolonged and tough struggle between the two maritime powers engaged in the Indian Ocean. In the end, the English emerged the victor, but the Company was not content with a minor victory. They wanted to leverage the limited advantage the battle had brought them and crush the Portuguese power. They set about achieving this aim with consummate diplomatic and military skills.

The somewhat questionable victory near Surat enhanced English prestige in the eyes of the Persians, who were not enthusiastic about the Portuguese control of Ormuz. The Portuguese had seized the strategically important port when their maritime power in the Arabian Sea and Eastern waters was unquestioned. As was their character, the Portuguese were overbearing and condescending in their attitude towards the Persians, which was resented by the Persian rulers, the scions of world-ruling kings of earlier times. The English arrived at a mutual understanding with the Persians, and they decided to jointly attack the Portuguese at the island of Ormuz—the Persians providing the land forces and the English bringing their maritime power to bear. On 22nd April 1622, the Portuguese surrendered Ormuz to the coalition.

The Persians gave the English part of the plunder of Ormuz and granted them half the customs collected at the port of Gombroon. (The port called Gombroon by the English, is today Bandar Abbas. The most common name for it over time had been Gameroon, traditionally believed to be derived from the Turkish gumruk meaning ‘customhouse’, Gombroon being an English abberation. The current name derives from Abbas the Great (ruled 1588–1629) with the prefix, ‘bandar’ meaning port—Port of Abbas) The loss of Ormuz was a great setback and the Portuguese never really recovered from this significant defeat. Very rapidly their collapse was catalysed by an overall decline in maritime power and the loss of all possessions in India other than the territories of Goa, Daman and Diu.

Further Discomfitures … and Final Withdrawal

The Portuguese had founded a factory at Hooghly–Chuchura (also called Chinsura) in 1579. Shah Jahan, while the heir apparent, had heard about the piracy and slave trade being practised in Bengal by private Portuguese traders with the tacit approval of Portuguese officials. In 1628, Shah Jahan came to the Mughal throne and in 1632, he ordered the Viceroy of Bengal, Qasim Khan, to expel the Portuguese from Bengal. The Mughal army besieged Hooghly in June of the same year. The Portuguese held out for nearly three months and then surrendered—losing 1000 men, while 4000, including women and children were enslaved and all ships captured.

The Portuguese withdrawal from trade in India can be traced back to around 1630s and could be considered to coincide with the defeat at Hooghly and withdrawal from Bengal. In 1634, the Portuguese Viceroy of Goa and the President of the English factory at Surat signed a convention that guaranteed both the parties unfettered commercial relations with India. Two decades later, the Portuguese unilaterally recognised English rights to the Eastern trade, a complete backdown from their earlier belligerent stance. In 1661, they requested English assistance to counter the Dutch—Portuguese arrogance was at an end and their capitulation complete. In 1662, the Portuguese-controlled island of Bombay was transferred to the English monarch Charles II as part of his dowry for marrying a Portuguese princess.

The Treaty of Madrid, signed on 23rd May 1667 by England and Spain, primarily as a response to French expansionist initiatives under King Lois XIV, also ended the Anglo-Portuguese struggle in India. The craftiness of the English can be discerned from the fact that their erstwhile opponents were now planning to become partners to beat down the next adversary that the English had to face, the Dutch.

[by the middle of the 17th century] ‘the English were no longer faced with bitter commercial rivalry from the Portuguese in India, who came to be too degenerate to pursue any consistent policy, though individual Portuguese traders occasionally obstructed the collection of investments by the English in their factories in the eighteenth century.’

— R. C. Majumdar, H. C. Raychaudhuri, & Kalikinkar Datta,

An Advanced History of India, p. 634

Even though their commercial enterprise in India lasted only a century before rapid decline in their power and influence set in and they had earned a well-deserved reputation for extreme cruelty towards local people, viewed holistically, the Portuguese were no better or worse than the Dutch or the English. They came to India to trade and make profit, by fair means or foul, and to a minor extent have been painted as villains by history, aided no doubt by the biased contemporary reports of the Dutch and the English. The above two statements are to be taken at its face value and not construed as condoning (or trying to explain away) the extreme cruelty they displayed, the forced conversions they engineered or their introduction of the dreaded Inquisition into Indian territory. The Portuguese were indeed guilty of the above crimes, which were condemnable even by the standards of the time when they were inflicted. In today’s terms, they constitute crimes against humanity.  

If one were to put the above contradictions in perspective, it must be admitted that like the other Europeans who followed, the overriding aim of the Portuguese was that Portugal should obtain monopolistic control of the commerce between India and Europe. This attitude was no different from the objective enshrined in the English East India Company’s charter a century later. It just so happened that several factors—their own character flaws being the main contributors—combined to make the Portuguese enterprise in India an abject failure. They were forced to make an uneasy and inglorious withdrawal from the arena.

Anglo–Dutch Rivalry

One of the catalysts for the formation of the English East India Company was the sharp rise in the price of spices forced on the English by the Dutch trading from India through the VOC. In keeping with the imperative to obtain spices, the first forays of the English were into the Spice Islands in the Far-Eastern Seas. It is also possible that the English anticipated a more robust opposition from the Portuguese on the western coast of the Indian Peninsula, where the latter had claimed exclusive rights to trade, than in the spread-out region of the Far-East. The newly formed company was stepping very carefully. On the other hand, the Dutch were gradually focussing on the Spice Islands, intent on monopolising the trade, and they viewed the English attempting their initial forays in that region suspiciously. The Dutch were hostile to these incursions, and it was obvious that there was bound to be keen rivalry.

Although they had arrived on the Eastern shores after the Portuguese, the Dutch had been much more disciplined in building their trade and were a much stronger rival to the English. As soon as competition became apparent, Holland had rapidly augmented Dutch capital in the East whereas the English Company was handicapped by limited resource availability and mis-management of its affairs at home. Initially, the English managed to obtain a reasonable share of the trade in pepper from Java and Sumatra but were unable to break into the market for more exotic spices such as cinnamon, cloves and nutmegs. This situation eventuated because pepper was produced in such great quantities in these islands that it was impossible for any single power to establish and enforce a monopoly.

Even so, the Dutch who were firmly embedded in the Spice Islands after evicting the Portuguese, were able to dislodge and remove the English from the entire archipelago. The truce in 1609 between Spain and Holland freed the Dutch from the dangers and constraints of war in Europe. This translated to a new-found confidence in the VOC functioning in the East to oppose any European power encroaching into ‘their’ territories or competing for trade in the Indian Ocean. English, still unsure about their capacity to withstand concerted opposition, stayed true to their enshrined dictum of ‘trading to make a profit’ keeping clear of rivals as much as possible.

In 1617, Company agents reported Surat to be the ideal location to procure Indian cloth and Bantam to be the place where the demand for the cloth was highest. Similarly, comparisons were made for other goods such as spices, deerskin etc., which could be transported to the places where the demand was the highest and also for use in the barter trade between countries. All the calculations were oriented towards achieving the fundamental objective of the English East India Company—profit at any cost. At this stage, the Company seems to have come to the collective understanding that only the removal of other European rivals would enable them to maximise profits in any kind of trade. The removal of rivals and opposition to their activities became added to the fundamental objectives of the Company.

After establishing fairly secure positions in both Surat and Bantam, the two nodal points for their trade, the English turned their attention to the previously unsaid but now articulated and established objective of the ‘removal of obstructions being created by European rivals’, the Portuguese and the Dutch.

The Spice Islands

Competing with the Dutch in the Spice Islands was not an easy task. To begin with, the English set up small, fortified factories at Macassar, Pularoon and Rosengin, all small islands in the vast archipelago. The Dutch immediately attempted to expel them from these places, but the initial effort ended in failure. The Dutch then seized two English ships and declared that they would not be released till the English left the Spice Islands. This action stopped all trade and even the pretences to do so, leading to the outbreak of open hostilities. Direct confrontation was detrimental to both parties in their quest for profit but affected the English more. In 1618, the Dutch appealed to the king of England to regulate and reign-in the English Company’s activities in the East.

The hostilities continued for few more years, the English being on the backfoot most of the time. The Dutch started to buy pepper at an artificially hiked price, which the English could not afford, thus damaging their efforts to carry out profitable trade. In 1619, the Dutch intercepted and seized four English ships near the Isles of Tekoo. Since the Dutch maritime power was still unassailable in the region, the English had not option but to come to terms with them.

Sharing Power

On 17th July 1619, a treaty between Holland and England was concluded in London, according to which the English East India Company was permitted to handle half the trade in pepper and one-third of the other finer spices in the Indian Ocean region. Further, the English were permitted to trade freely from the Dutch facility at Pulicat on the Coromandel coast while bearing half the cost of the maintenance of the Dutch facility. The treaty effectively made the English and the Dutch partners in the Indian trade. This arrangement, however, went completely against the guiding principle and operational ethos of both the parties, which was to exert monopoly over the trade and to oust any rival European power from the region.

Even though an uneasy partnership had been arrived at, the Dutch continued to have superior power in the region. In 1623, they tortured 10 Englishmen along with a group of Japanese and then executed them on charges of conspiracy. Viewed in an overarching manner, there was nothing peculiar about this action, even the Company had periodically indulged in such activities against other Europeans. They had committed even more barbarous acts, especially since they had been vested with legal authority by the king to ‘punish’ even Englishmen overseas.

‘Such actions were also not unknown either in England or in the Company’s possessions in the East where until “they were entrusted with the powers of martial law, having no power to punish capitally any but pirates, they made it a rule to whip to death, or starve to death, those of whom they wished to get rid.”

— James Mill,

The History of British India, p. 38

However, in this instance the English East India Company reacted with great indignation and used the episode to whip up popular sentiment and public opinion in England against the Dutch. They wanted to channel the popular resentment for their own purposes in the East. With minimal effort the Company had managed to place the British Government under pressure to retaliate. To avoid escalation of tensions, the Dutch Government backed down in Europe, but the VOC in the Indian Ocean did not budge from their belligerent position. However, they made a small concession by letting the English withdraw from Dutch settlements without having to pay any duties or taxes to reconcile their accounts. The English had to be content with this situation, biding their time to get even.

Short-lived Dutch Supremacy

Confident of their relative superiority in terms of military power and diplomatic influence on the local rulers, the Dutch took the offensive again. The Dutch captured three English ships in the Persian Gulf and destroyed one of them. With an informal blockade being enforced by the Dutch, English trading activities, including the internal movement of commercial merchandise, was almost fully suspended. In 1640, the Dutch evicted the Portuguese and took over Malacca, becoming ‘complete masters of the Eastern Islands’. (Hugh Murray, History of British India, p. 118) In 1644, the Dutch arrived at a convention with the Portuguese in Goa to join forces to further discomfiture the English and disrupt their trading activities.

In 1653–54 the English were forced to suspend trading from Surat when a large Dutch fleet appeared before the port. By the 1650s the inherent dichotomy between the compulsions of the merchant capital and the unwritten law that profits had to be made, started to become apparent in Europe. While the VOC and the English Company were engaged in a bitter struggle for supremacy in the Eastern trade, developments in London were alarming the VOC directors in Amsterdam. There was a concerted move in London to declare navigation to India and commercial activities in the Indian Ocean open to all. The VOC directors knew that if this came to pass, it would be ruinous for their trade with the East—the abolition of monopoly rights in England would greatly increase the competition in the East from the English, as more ‘Free Merchants’ would join the already increasing English fleet in the Indian Ocean region.

Triumph of the English Company

While the Free Merchants were preparing to open the trade with the East, the English Company started to gradually supersede the Dutch in power and influence in the Indian sub-continent. In 1665, the Company managed to force the Dutch to pay compensation for the execution of the ten Englishmen in 1623. Although delayed by more than 40 years, this was a clear indication of the altered status of both the trading companies in the East—the lead was passing from the Dutch to the English.

Although hostilities continued, it was apparent that Dutch power was waning. Even so, the Dutch continued to routinely intercept English communication voyages from Surat to Bombay and captured a few English vessels in the Bay of Bengal. These were not very significant actions and were well-contained by the ascendant English. The changing of the guard had taken place but had no immediate or lasting effect on the Indian sub-continent. The Dutch were all powerful in the Eastern islands, where they subsequently went on to build their own colonial empire. However, they were weak in the Indian sub-continent and not able to thwart the English. Always shrewd enough to appreciate an advantage, the English analysed the emerging situation and took offensive action to expel the Dutch from India.

The English now evoked their old arrangement with the Portuguese to drive the Dutch out. This was a necessary move since the Dutch positions in India continued to be sufficiently strong and robust enough that the English were not fully confident of subduing them on their own. The Dutch were still entrenched in well-established factories at Surat, Cochin, Pulicat, Nagapatam, Chinsura, Kassimbazar, Baranagar, Patna and Balasore. With the aid of opportunistic Portuguese assistance, the English gradually dispossessed the Dutch of their territorial holdings. By mid-18th century the Dutch resistance had fully collapsed, and English power and influence were in full bloom. The VOC was reduced to involving itself in ‘country trade’ with its officials carrying out only private trade. The English had triumphed over the Dutch through meticulous planning, cunning diplomacy, the use, at times, of unscrupulous and unprincipled ways, of power and influence and above all by always keeping their objective in sight.  

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