The British East India Co. began business in India after getting a royal farman from Jahangir. By 1623, it had established its factories in Surat, Broach, Ahmedabad, Agra and Masulipatnam. From the beginning, it tried to combine trade with war and control of the territory where its factories were situated. In fulfilling these ambitions, they fought with the Dutch and the Portuguese, whom they eliminated easily. Now the French appeared as a new rival.
The French East India Company was founded in 1664 and was firmly established at Chandernagore near Calcutta and Pondicherry. Dupleix was the French Governor in Pondicherry at this time. Over time, the English were able to drive out the French. The English now started creating a powerful army of Indian soldiers, called sepoys and officered by Englishmen.
The British political control in India started with the Battle of Plassey in 1757, when the Company forces defeated Siraj-ud-Daulah, the Nawab of Bengal. The British proclaimed Mir Jafar the Nawab of Bengal. The Battle of Plassey was of great hstorical importance because it cleared the way for the British mastery of Bengal and finally India. The rich resources of Bengal, the most prosperous state then, enabled them to raise a strong army.
Mir Jafar soon discovered that it was impossible to meet the Company demands. And so, in 1760, the Company forced him to give up the throne in favour of his son-in-law Mir Qasim. However, Mir Qasim proved to be a difficult game because he was unwilling to tolerate any interference. He was an able, efficient and bold ruler but was defeated in battles in 1763 and fled to Awadh where he joined Shuja-ud-Daula, the Awadh Nawab and Shah Alam II, the fugitive Mughal Emperor. The three clashed with the British in the Battle of Buxar in 1764 and were thoroughly defeated. This was one of the most decisive battles because it proved the superiority of English arms over major Indian powers.
The Company became the real master of Bengal from 1765. Its army was in sole control of its defence and the supreme political power was in its hands. The Nawab depended for his security on the British. As the Diwan, the Company directly collected its revenues, while through nomination of the Deputy Subahdar, it controlled the police and judicial powers. This arrangement is known as the Dual Government. It was very attractive for the British: They had authority without any responsibility.
A large scale expansion of the British rule in India began with Governor-General Lord Wellesley (1798-1805). He started the policy of Subsidiary Alliance. Under this treaty, the ruler of a friendly state was compelled to accept the British army in his territory and to pay an annual maintenance fee. This was done allegedly for the ruler’s protection, but in reality, many times, he had to cede his kingdom for non-payment of fee. The promise of non-interference in the ruler’s internal affairs was never kept. Such treaties were signed by the Nizam of Hyderabad in 1798 and 1800. Tipu, of course, never agreed to such a treaty.