How the East India Company became the world’s most powerful business

Think Google or Apple are powerful? Then you’ve never heard of the East India Company, a profit-making enterprise so mighty, it once ruled nearly all of the Indian subcontinent. Between 1600 and 1874, it built the most powerful corporation the world had ever known, complete with its own army, its own territory, and a near-total hold on trade of a product now seen as quintessentially British: Tea.

At the dawn of the 17th century, the Indian subcontinent was known as the “East Indies,” and—as home to spices, fabrics, and luxury goods prized by wealthy Europeans—was seen as a land of seemingly endless potential. Due to their seafaring prowess, Spain and Portugal held a monopoly on trade in the Far East. But Britain wanted in, and when it seized the ships of the defeated Spanish Armada in 1588, it paved the way for the monarchy to become a serious naval power.

In 1600, a group of English businessmen asked Elizabeth I for a royal charter that would let them voyage to the East Indies on behalf of the crown in exchange for a monopoly on trade. The merchants put up nearly 70,000 pounds of their own money to finance the venture, and the East India Company was born.

The corporation relied on a “factory” system, leaving representatives it called “factors” behind to set up trading posts and allowing them to source and negotiate for goods. Thanks to a treaty in 1613 with the Mughal emperor Jahangir, it established its first factory in Surat in what is now western India. Over the years, the company shifted its attention from pepper and other spices to calico and silk fabric and eventually tea, and expanded into the Persian Gulf, China, and elsewhere in Asia.

The East India Company’s royal charter gave it the ability to “wage war,” and initially it used military force to protect itself and fight rival traders. In 1757, however, it seized control of the entire Mughal state of Bengal. Robert Clive, who led the company’s 3,000-person army, became Bengal’s governor and began collecting taxes and customs, which were then used to purchase Indian goods and export them to England. The company then built on its victory and drove the French and Dutch out of the Indian subcontinent.

In the years that followed, the East India company forcibly annexed other regions of the subcontinent and forged alliances with rulers of territory they could not conquer. At its height, it had an army of 260,000 (twice the size of Britain’s standing army) and was responsible for almost half of Britain’s trade. The subcontinent was now under the rule of the East India Company’s shareholders, who elected "merchant-statesmen" each year to dictate policy within its territory.

But financial woes and a widespread awareness of the company’s abuses of power eventually led Britain to seek direct control of the East India Company. In 1858, after a long wind down, the British government finally ended company rule in India. By 1874, the company was a shell of its former shelf and was dissolved.

By then, the East India Company had been involved in everything from getting China hooked on opium (the Company grew opium in India, then illegally exported it to China in exchange for coveted Chinese goods) to the international slave trade (it conducted slaving expeditions, transported slaves and used slave labor throughout the 17th and 18th centuries). The East India Company may have since been overshadowed by modern capitalism, but its legacy is still felt around the world.