(This is part of the series Make History Fun Again, where the writers introduce historical facts, events and personalities in a fun way for parents to start a conversation with their kids.)
By Archana Garodia Gupta and Shruti Garodia
The term East India Company naturally brings to mind intrepid British traders who sailed off to India to engage in business, and ended up ruling and ravaging the vast Indian subcontinent instead. The Honourable Company, as it was often called, was the single most powerful corporation in the world, with its own armies, ships, flag and money, granted the right by British Parliament to rule in its name! Even Google and Facebook haven’t reached that pinnacle (yet, anyway).
When we say East India Company, we don’t think of the French East India Company or the Portuguese East India Company, or the Dutch East India Company.
We certainly don’t think of Nordic people like the Danes and Swedes having trading outposts in India. Who’s ever heard of the Danish East India Company or the Swedish East India Company?! Yet, exist they all did – large, well-funded public companies whose investors made their fortunes in trading spices, silk, textiles, saltpetre, rice, and opium!
How did they work?
Each of these companies was granted a Royal Charter from their respective monarchs. These charters would give the East India Company a monopoly, within their country, on all trade with the “East Indies”, meaning any place that lay east of the Cape of Good Hope in Africa, that is, all of Asia!
The companies had to pay generously for this privilege, by giving back the Crown hefty fixed or percentage fees.
These transcontinental voyages were ruinously expensive and risky – what with the very real threat of mishaps at sea, pirates and accidents looming over voyages until the precious cargo was safely unloaded in Europe. To fund their voyages, the East India Companies invited rich businessmen and nobles to invest money, and hope for fat profits in exchange.
This allowed for both the money invested and the risk to be spread across many investors, rather than be held with just one or two people. These were some of the earliest joint-stock companies in the world. In fact, it is not well-known, but the success of these East India companies had a big hand in the development of modern companies and financial markets!
The Portuguese East India Company
The Portuguese were the very first European naval adventurers on the scene, who had started out on daring sea voyages down the coast of Africa back from 1415 AD. In search of valuable Indian spices, they were in search of a sea route to India, as the traditional land routes were controlled by hostile Muslim empires.
In May 1498, a young Vasco da Gama finally landed in Calicut, and India had been officially discovered by Europe. The Portuguese kept sending annual expeditions and with their cutting-edge naval technology they soon wrested a 100-year long monopoly over the Indian Ocean, in which they charged all ships a hefty fee (including powerful Mughal vessels!) just to pass through.
Portugal’s India trade was a monopoly of the Portuguese Crown for 200 years. However, by the early 17th century, the recently established British and Dutch East India Companies started rapidly encroaching on the Portuguese Empire, seizing Portuguese ships at sea and what not.
The Portuguese “Companhia da Índia Oriental” was born in 1628 and died in 1633, a short-lived and unsuccessful attempt to raise more capital and see off the Anglo-Dutch threat; there was hardly any private interest, and the Crown remained the largest investor. The Portuguese soon lost all their Asian lands to native rulers and other European powers, though in India they managed to hold on to the outposts of Goa, Daman and Diu right until 1961, when they were finally forcibly evicted by the Indian military.
The Dutch East India Company
The Dutch East India Company, the “Vereenigde Oostindische Compagnie (VOC)” was a mega-corporation that was chartered in 1602 AD. Crazily enough, the VOC was the very first company in the world to issue stocks to the general public; shares which were freely tradable on the Amsterdam Stock Exchange!
The Dutch initially focused on Indonesia, which they soon conquered. After defeating the Portuguese, they set up their first small base in India in Tamil Nadu, looking for textiles in exchange for the spices from the East Indies. This was followed by trading posts in Bengal, Gujarat, and Ceylon.
However, in addition to trading spices and cloth, the Dutch also indulged in the far extremely profitable trade of Indian slaves in exchange for the spices from Jakarta, Malacca and Ceylon. Dutch power declined by the second half of the 18th century, and they were forced to give up all their posts in India to the British by 1825 AD.
The French were rather late to the East Indies game, setting up their “Compagnies des Indes orientales” only in 1664. They established their first trading post in Surat in 1668 CE.
It was the French General Dupleix who, along with 400 European soldiers, defeated the 10,000 strong forces of the Nawab of Carnatic. The French realised the overwhelming superiority of European guns even in the face of gigantic Indian battalions, and the rest, as they say, is history.
The French and the British quickly began offering their military services as mercenaries to various Indian rulers, and in the process gained control over vast stretches of India. Over the 18th century, they fought each other for control of India, with the French coming out the losers as the British defeated Napoleon.
However, the ports of Pondicherry, Mahe (Kerela) and Chandernagar (Bengal) remained French enclaves, and were ceded to an independent India only in the 1950s.
The Danes and the Swedes
The Danes, under the Danish East India Company or the “Østindisk Kompagni”, set up their first base in Tranquebar in Tamil Nadu in 1620. They were never very influential, and took advantage of the frequent warring between the larger powers like the British, Dutch and French, by offering trade opportunities under a ‘neutral’ flag. They were forced to relinquish their outposts to the British by 1845 CE.
The Swedish “Svenska Ostindiska Companiet (SOIC)” was only founded in 1731, more than a hundred years after the others, with the stipulation from the Swedish king that the SOIC must not intrude on the port towns of other (powerful) European countries! Consequently, the Swedish East India Company did most of its 80-year trade with China and not India at all, before finally closing shop in 1813.
(For more fun journeys through India’s history, check out the recently released two-volume set, The History of India for Children Vol. 1 and Vol. 2, published by Hachette India. Follow on twitter @shrutigarodia_)