The British Empire and the Indian Ocean Trade

The British Indian Ocean empire was built in three distinct phases: the commercial phase of the East India Company between 1600 and 1757; the political phase of Company rule between 1757 and 1858; and the imperial phase of Crown rule between 1858 and 1947. The phase that produced the trade was the first. The phase that produced the empire was the second. The phase that produced the late-Victorian global order was the third. The most useful single interpretation of the whole process is the one John Darwin offered in The Empire Project (2009): the British Indian Ocean empire was a sequence of improvised responses to a series of European and Asian challenges that the British did not, at the start, know how to manage.

The East India Company and the Pre-Plassey Trade

The East India Company was chartered by Queen Elizabeth I on 31 December 1600, with a 15-year monopoly on English trade with the East Indies. The Company was, in its first century, a joint-stock trading enterprise in the long European tradition. The 1709 decision to convert it from a regulated company to a joint-stock company, with capital of £3.2 million, was the institutional moment that gave it the resources to expand. The first permanent English trading post in India was established at Surat in 1612; Madras was founded in 1639; Bombay was transferred from the Portuguese crown to the English crown as part of the 1661 dowry of Catherine of Braganza and re-ceded to the Company in 1668; Calcutta was founded in 1690.

The “country trade” — the trade between India, China, Southeast Asia, and East Africa, conducted from Indian ports by Company servants, by Indian merchants, and by private British traders under Company licences — was, by the 1740s, the largest sector of the British Indian Ocean trade. Cotton textiles from Gujarat and the Coromandel Coast, saltpetre from Bihar, sugar from Bengal, pepper from the Malabar, silk from Bengal and China, and porcelain from China were the principal exports. The trade was, in K. N. Chaudhuri’s phrase, the foundation of a “trading world” that pre-dated British political dominance and that survived it. The Trading World of Asia and the English East India Company (1978) remains the indispensable account.

Plassey, the Diwani, and the Political Turn

The Battle of Plassey, fought on 23 June 1757, was the moment at which the East India Company crossed the line from commercial agency to political power. Robert Clive’s victory over the Nawab of Bengal, Siraj-ud-Daulah, was secured in part by the defection of Mir Jafar and in part by the rainstorm that prevented the French artillery from being used. The 1765 grant by the Mughal emperor Shah Alam II of the diwani of Bengal, Bihar, and Orissa — the right to collect the land revenue — gave the Company, in P. J. Marshall’s phrase from Bengal: The British Bridgehead (1987), the fiscal foundation for its Indian empire. The Bengal revenues, which by the 1780s yielded the Company some £3 million per annum, financed the Company’s expansion into Madras, the Carnatic, and the North-Western Provinces.

The territorial turn transformed the trade. The Company’s 1773 Regulating Act and the 1784 India Act brought the Company under parliamentary supervision and created the Board of Control. The 1813 Charter Act ended the Company’s monopoly on the British trade with India; the 1833 Charter Act ended the Company’s monopoly on the China trade and converted the Company into a purely governmental body. The 1858 Government of India Act, passed in the aftermath of the 1857 Indian Rebellion, dissolved the Company and transferred its territorial and governmental functions to the Crown. C. A. Bayly’s Empire and Information (1996) and William Dalrymple’s The Anarchy (2019) describe the period of Company rule as one in which a commercial institution improvised a state.

The Late-Victorian Indian Ocean Empire

The Crown took over a working imperial system and extended it. The 1858 transfer settled the constitutional question; the 1869 opening of the Suez Canal settled the logistical question. The canal cut the sea journey from London to Bombay by 4,000 nautical miles, and converted the steamship voyage from a two-month journey around the Cape of Good Hope into a two-week journey through the Mediterranean. The 1875 purchase, by Disraeli, of the Khedive of Egypt’s 44 per cent stake in the Suez Canal Company for £4 million, financed by the Rothschilds, locked British strategic interest into the canal. The 1882 occupation of Egypt in the aftermath of Urabi Pasha’s revolt, and the 1885 Berlin Conference, completed the British control of the route to India.

By 1900, the British Indian Ocean empire was a coherent commercial and strategic system. Aden controlled the Red Sea; Perim controlled the Bab el-Mandeb; British Somaliland and the East Africa Protectorate controlled the Horn; the British India Steam Navigation Company, the P&O Line, and the British-India line connected the system to Bombay, Karachi, Colombo, and Calcutta; the Eastern Telegraph Company’s cables connected it to London. The country trade, which had been the heart of the system, was now a sub-system inside a larger imperial structure. Tirthankar Roy’s The Economic History of India, 1857–1947 (2000) and John Darwin’s The Empire Project are the standard accounts of this period.

The End of the Indian Ocean Empire

The 1947 independence of India and Pakistan was the terminal event of the British Indian Ocean trade as it had been constructed in the eighteenth and nineteenth centuries. The 1963 formation of Malaysia, the 1965 separation of Singapore, the 1967 Aden Emergency, the 1968 closure of the Suez Canal after the 1967 war, and the 1971 withdrawal from the Gulf — each a stage in the dismantling of the system. The 1956 Suez Crisis had already, in the financial terms that the imperial preference system imposed, demonstrated that Britain could no longer act alone in the eastern Mediterranean. By 1971, the Indian Ocean was no longer a British lake. The transformation from a British commercial system to a system of independent post-colonial states trading inside the global economy is, in Sugata Bose’s A Hundred Horizons (2006), the central narrative of the modern Indian Ocean.

Historiographical Note

The historiography of the British Indian Ocean trade has been shaped by three interventions. K. N. Chaudhuri’s The Trading World of Asia and the English East India Company (1978) argued that the British Indian Ocean trade must be understood on its own terms, as a regional trading system into which the British were integrated. C. A. Bayly’s Empire and Information (1996) and his Indian Society and the Making of the British Empire (1988) reframed the period of Company rule as the construction of an Indian state. John Darwin’s The Empire Project (2009) re-described the whole system as a sequence of improvised responses to a global set of challenges. The unresolved question is the extent to which the British Indian Ocean trade was a system the British built, or a system the British took over from the Mughal, Ottoman, and Persian empires that had structured the region in the seventeenth and eighteenth centuries. The present generation of historians has, on the whole, declined to give the British Empire’s commercial legacy a clean bill of health.

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