How Did British Rule in India Begin?

The rise of British political power in India was not the result of a single event. It developed gradually through military victories, political agreements and control over revenue.

The Battle of Plassey in 1757 was an important turning point. The East India Company defeated the forces of Siraj-ud-Daulah, the Nawab of Bengal, and significantly increased its political influence in Bengal.

An even more decisive development came with the Battle of Buxar in 1764. Company forces defeated the combined forces associated with Mughal Emperor Shah Alam II, Shuja-ud-Daulah of Awadh and Mir Qasim, the former Nawab of Bengal. The victory strengthened the East India Company's military and political position in northern and eastern India.

The British Parliament's historical account identifies the victories at Plassey and Buxar as the developments through which the Company emerged as a territorial and political power and gained control over the revenues of Bengal, Bihar and Orissa.

East India Company Became the Diwan

On August 12, 1765, Mughal Emperor Shah Alam II appointed the East India Company as Diwan.

The Diwan was responsible for revenue administration. By obtaining the Diwani, the Company gained access to the enormous revenue resources of Bengal and the surrounding territories.

This was fundamentally different from the Company's earlier role.

The East India Company had originally entered India as a trading organization. It established trading centres and sought commercial privileges from Indian rulers. But after obtaining the Diwani, it was no longer dependent only on profits from commerce. It could use Indian revenue to finance its administration, military forces and commercial operations.

NCERT educational material describes the Diwani grant as the point at which the Company became the chief financial administrator of the territory under its control.

Why Was August 12, 1765 Important?

The events of August 12, 1765 were important because they fundamentally changed the nature of British involvement in India.

Before this period, the East India Company was primarily a commercial organization with growing military influence. After acquiring revenue authority, it possessed one of the most important foundations of government: control over taxation and financial resources.

Bengal was one of India's richest regions. Control over its revenue provided the Company with enormous financial power.

Instead of sending large quantities of money from Britain to purchase Indian products, the Company increasingly had access to locally collected revenue. This strengthened its commercial and military position and helped finance further territorial expansion.

The grant therefore represented a major transition from British commercial influence to British political power in India.

Treaty of Allahabad and British Power

The political settlement of 1765 at Allahabad followed the Company's victory at Buxar.

Robert Clive, representing the East India Company, negotiated arrangements involving Mughal Emperor Shah Alam II and Shuja-ud-Daulah, the Nawab of Awadh.

The Mughal emperor's grant of the Diwani gave the Company revenue authority in Bengal, Bihar and Orissa. British Library records preserve material relating to the grant of the Diwani and describe Shah Alam II conveying the revenue-collecting authority to Lord Clive in August 1765.

These arrangements dramatically increased the Company's political importance.

A corporation that had come to India for trade was increasingly exercising functions associated with government.

From Company Rule to British Crown Rule

It is important to distinguish East India Company rule from direct British Crown rule.

The events of 1765 did not immediately place the entire Indian subcontinent under British control. Many Indian kingdoms, princely states and regional powers continued to exist, and British expansion took place gradually over the following decades.

However, the acquisition of the Diwani gave the East India Company a powerful territorial and financial base from which its empire expanded.

The Company continued to govern large parts of India until the nineteenth century.

Following the Indian Rebellion of 1857, the British government abolished Company administration in India. Under the Government of India Act 1858, authority was transferred from the East India Company to the British Crown.

Therefore:

1765 marks a crucial beginning of British East India Company rule and territorial administration in India, while 1858 marks the beginning of direct British Crown rule.

Historical Significance

The events of August 12, 1765 changed the course of Indian history.

Control over Bengal's revenue enabled the East India Company to strengthen its army, finance its administration and expand its influence into other parts of the subcontinent.

The development also demonstrated how the Company had evolved from a group of merchants into a political power.

The Oxford Companion to British History describes the August 12 appointment of the Company as Diwan as confirmation of its transformation from a trading organization into a political power in India.

Over the following decades, Company authority expanded through wars, treaties, alliances, annexations and administrative changes.

For this reason, August 12, 1765 remains one of the major turning points in the history of British rule in India.

Frequently Asked Questions

When did British rule begin in India?

A major beginning of British East India Company rule can be dated to August 12, 1765, when Mughal Emperor Shah Alam II appointed the East India Company as Diwan and gave it authority over important revenue resources. Direct British Crown rule began later, in 1858.

Who granted Diwani rights to the East India Company?

Mughal Emperor Shah Alam II granted the East India Company the Diwani authority associated with Bengal, Bihar and Orissa in 1765.

What were Diwani rights?

Diwani rights gave the East India Company authority over revenue collection and financial administration, providing it with access to the resources of Bengal and adjoining territories.

Why is 1765 important in Indian history?

The acquisition of Diwani rights transformed the East India Company from primarily a trading organization into a major administrative and political power, creating a financial foundation for the expansion of Company rule in India.