With the stroke of a pen, the British, aided undoubtedly by their military might, became lawful rulers of vast parts of India.
The two decades that followed 1750 ushered in an era of India's weakening and the British's triumph, with far-reaching consequences for India and the world. By the 1800s, India would be secured as the crown jewel of the British Empire, and all native rulers would be reduced to mere pawns in the political chessboard of the British.
On 12 August 1765, the British forced the Mughal Emperor Shah Alam II to sign the Treaty of Allahabad. The Mughal Emperor signed away the right to collect taxes (Diwani rights) from Bengal, Bihar, and Orissa to the British.
The Mughal emperor was paid a fixed sum for maintaining his court at Allahabad. The Nawab of Awadh was also reduced to the status of a dependent of the British. Additionally, the defeat of Marathas at Panipat, combined with the decisive British victories at Plassey and Buxar, meant that there was no strong opposition to challenge the British might in the country.
The treaty directly resulted from the Battle of Buxar, which was primarily fought between the East India Company and Mughal Emperor Shah Alam II. The Mughal Emperor had to submit to the East India Company after facing defeat and, as a result, signed this humiliating treaty designed by Robert Clive of the East India Company.
The conflict at Buxar was between the British East India Company forces, commanded by Major Hector Munro, and the combined army of an alliance of Indian states, including Bengal, Awadh, and the Mughal Empire. This decisive battle confirmed British power over Bengal and Bihar after their initial success at the Battle of Plassey in 1757 and marked the end of the attempt to rule Bengal through a puppet nawab.
The treaty gave the Company access to nearly 40,000 square kilometers of taxable land in one of the most fertile belts in the subcontinent.
The British were entitled to collecting tax directly without the King's consent. In return, they had to pay Rs 26 lakhs annually to the Mughal as tribute. The districts of Kora and Allahabad were also returned to the Mughal Emperor.
The Nawab of Awadh, who also fought against the EIC in the Battle of Buxar, had to pay Rs 53 lakhs in war indemnity. He was sent back to the Oudh and was promised money to operate the court and a subsidiary army.
The Nawab of Bengal retained the judicial functions, but the Company had the power to collect revenue . With the King being a figurative head, the new setup of administration was called the Dual System of Government. By 1793, the Nawab was forced to give up the little power he was left with.
The acquisition of the Diwani rights by the Company is an important event in the history of India.
Once they got the Diwani rights, the Company stopped receiving money from England to buy merchandise in India. The revenue received from Bengal was used for this purpose, and the money earned by selling these goods went back to England — not spent in Bengal. In the name of the Mughal emperor and with the approval of the Bengal Nawab, Clive served the business and political interests of the Company.
The history of 18th century South Asia is a complicated whirlwind of competing powers and conflicting interests. By 1707, when the last great Mughal emperor, Aurangzeb, died, his empire controlled most of South Asia but was also teetering due to military overstretch and fiscal instability.
Bengal was the wealthiest province in the Mughal Empire due to its agricultural fertility; rule over it was greatly coveted. By 1717, Murshid Quli Khan, a Shia Muslim, got the Mughal Emperor to declare Bengal's subahdar (governor) and diwan (chief revenue officer); he promptly declared himself the effectively independent Nawab of Bengal. The title of diwan was significant because it gave its holder the legal right to collect taxes and use them to furnish soldiers, fortifications, and the like.
The effective rule of the Nawabs of Bengal lasted until 1757 when British power replaced it. Until then, the British presence in Bengal was limited to trade and a fort at Calcutta run by the British East India Company. The Seven Years’ War in Europe led to increased rivalry between the British and the French in India. This ultimately led to an alliance between Bengal and France and the subsequent British invasion of Bengal, where they won the Battle of Plassey in 1757, helped by a traitor (Mir Jafar).
During the late 18th Century, India was a collection of many weak and fragmented princely states. Lord Richard Wellesley (Governor-General from 1798-1805) introduced the Doctrine of Subsidiary Alliance. According to the Doctrine, the British would provide a subsidiary military force to the Indian states in return for payment of an annual fee.
The British fought wars to annex states that did not acquiesce to the Doctrine of Subsidiary Alliance. They gained control of all territories to the South of the Vindhyas after their victory at the Third Anglo-Maratha War (1817-1819). They also annexed the Mysore kingdom after defeating Tipu Sultan at the Battle of Seringapatam (1799).
One of the first Indian words to enter the English language was the Hindustani slang for plunder: “loot.” According to the Oxford English Dictionary, this word was rarely heard outside the plains of north India until the late 18th century, when it suddenly became a common term across Britain. Today, there are more Mughal artifacts stacked in this private house in the Welsh countryside than are on display at any one place in India – even the National Museum in Delhi.
Within a few years, 250 company clerks backed by the military force of 20,000 locally recruited Indian soldiers had become the effective rulers of Bengal. An international corporation was transforming itself into an aggressive colonial power.
On the whole, Company successes can be attributed to a combination of (a) superior leadership, (b) superior finance, (c) unity in command, (d) a well paid and disciplined army (e) lack of unity among and within the Indian powers (f) friendly collaborating sections of the Indian elite and (g) the weaknesses of the military modernization programs initiated by the feudal Indian states.
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