East India Company

The interest of the United Company of Merchants of England Trading to the East Indies turn from trade to territory during the eighteenth century as the Mughal Empire declines in power and the East India Company struggles with its French counterpart, the French East India Company (Compagnie française des Indes orientales) during the Carnatic Wars of the 1740s and 1750s.

The Battle of Plassey and Battle of Buxar, in which the British, led by Robert Clive, defeat the Indian powers, leaves the company in control of Bengal and a major military and political power in India.

In the following decades it gradually increases the extent of the territories under its control, ruling either directly or indirectly via local puppet rulers under the threat of force by its Presidency armies, much of which were composed of native Indian sepoys.

By 1803, at the height of its rule in India, the British East India company has a private army of about 260,000—twice the size of the British army.

The company eventually comes to rule large areas of India with its private armies, exercising military power and assuming administrative functions.

Company rule in India effectively begin in 1757 and lasts until 1858, when, following the Indian Rebellion of 1857, the Government of India Act 1858 leads to the British Crown assuming direct control of India in the form of the new British Raj.

Despite frequent government intervention, the company has recurring problems with its finances.

It is dissolved in 1874 as a result of the East India Stock Dividend Redemption Act passed one year earlier, as the Government of India Act has by this time rendered it vestigial, powerless, and obsolete.

The official government machinery of British India has assumed its governmental functions and absorbed its armies.