At its peak, the English East India Company (EIC) was not only the first multinational company of its day, but was also the largest corporation of its kind: the EIC surpassed the scale and power of many nations, effectively becoming the governing authority of India, one of the most economically productive regions of the era. Furthermore, even though the East India Company’s monopoly on trade waned in the late 18th century, it morphed into a powerful, quasi-militant corporation: at its height, the EIC commanded a private army of 260,000 soldiers, twice the size of the standing British army. This immense military power allowed the company to once again dominate global trade, systematically removing competition, conquering territory and ruling entire countries, such as India. What began as a trading enterprise transformed into a colonial power, using military might to subjugate vast populations and reshape global geopolitics. The EIC oversaw the redrawing of maps, the redistribution of global power and monopolistic domination as it became the leading economic and political power of the Victorian era.

On New Years Eve, 1600, Queen Elizabeth I granted a charter to a group of established London merchants that gave them exclusive overseas trading rights with the East Indies, a vast expanse of the globe stretching from Africa’s Cape of Good Hope eastward to Cape Horn in South America. The members soon established the English East India Company, which held a dominant monopoly: no other British subjects were legally permitted to trade in the territories marked out by the Charter. However, the new company faced intense competition from the Spanish and Portuguese, who already had trading outposts in India, and the Dutch, whose own hugely influential Dutch East India Company, or the VOC, I have given more attention to in my other article titled ‘Shareholders and the VOC’.

Many of the hallmarks of the modern corporation were first popularised by the East India Company. For example, the company was the largest and longest-lasting joint stock company of its time, raising and pooling capital by selling shares to the public. It was governed by a president, but also a “board of control” or “board of officers”; the East India Company’s meetings were often attended by hundreds of stockholders, each vying for their own voices to be heard. Yet, although the EIC was run in a characteristically chaotic manner, it would soon become incredibly successful.

Perhaps the EIC’s biggest success was their trading influences in India. When the British and other European traders first arrived in India, they cooperated with local rulers and kings, especially the powerful Mughal Empire that controlled vast swathes of the subcontinent. 

Although the EIC was technically a private venture, its royal charter and private army granted it immense political influence. Indian rulers invited local Company bosses to court, extracted bribes from them, and recruited the Company’s milita as mercenaries in regional warfare, sometimes even against British competitors like the French or Dutch. 

The company soon captured and built fortified trading outposts in port cities like Bombay, Madras and Calcutta. As the Mughul Empire started to collapse in the 18th century, war engulfed the crumbling empire; these coastal trading outposts transformed into de-facto kingdoms, ruled essentially by the company. Yet the EIC’s unique and absurdly powerful position soon became a major problem. How would the East India Company rule these territories? A company is not a state, thus sovereignty became a big problem. How, for example, should the company draw up laws and maintain order in their overseas territories; should they govern through force, or should they simply puppet local leaders? Soon, it was the East India Company’s local branch officer who became the ruler of these areas. After all, the London company office need not concern itself with Indian politics: as long as trade continued, the Board was happy and did not interfere. Furthermore, since there was very little communication between London and the branch offices (a letter took three months each way), it was often left to the branch officer to write the laws governing company cities like Bombay, Madras and Calcutta and maintain law and order through creating local police forces and justice systems. 

To really show how ridiculous the EIC was during this time, one must imagine such a company existing in the current world. Imagine, for example, if Aramco decided to prospect for oil in foreign territories, establishing a colony in everything but name through a vast private army, then set up police forces, social services, as well as being judge, jury and executioner for the local population. 

However, the company would soon turn from a powerful trading partner to a fully fledged corporate colonial superpower: the Battle of Plassey in 1757, fought between 50000 Indo-French troops and 3000 company soldiers under the leadership of Robert Clive, the future Governor of the Bengal Presidency, was a resounding EIC victory, secured mostly by Clive’s scheming with Indian bankers that persuaded most of the Indian army to defect. Clive’s victory gave the East India Company extensive taxation powers in Bengal, then one of the wealthiest provinces in India. Plundered treasure was then shipped back to London, which made this battle hugely profitable for the company and its shareholders. Thus, a seismic shift in corporate policy ensued. To the EIC, the most profitable way to run the company was to essentially colonise huge areas of land to be run completely to increase company revenue; the business model shifted from one that had been focused largely on profitable trade to one that focused on tax collection. This policy was solidified in 1784, when the British Parliament passed Prime Minister William Pitt’s “India Act,” formally including the British government when ruling over the East India Company’s holdings in India: company and empire were now one.

The East India Company continued further expansion throughout the Eastern world. Infamously, the EIC smuggled opium into China in exchange for large orders of tea. Although China only traded tea for silver, the company, which was short of silver, exploited a loophole by circumventing China’s opium ban through a black market of Indian growers and smugglers. Thus, as thousands of kilograms of tea poured into the UK, the Chinese population was decimated by the addictive epidemic of opium consumption. Furthermore, when China cracked down on the opium trade, the British government sent warships, triggering the Opium War of 1840, which handed the victorious British the influential trading port of Hong Kong, a hugely profitable venture that clearly shows the ruthless lengths the EIC was willing to go to in the name of profit. 

Yet, by the mid-19th century, opposition to the East India Company’s monopoly status reached a fever pitch in Parliament, fuelled by the free-market ideals of Adam Smith. Ultimately however, the death of the East India Company in the 1870s was less about moral outrage over corporate corruption, colonial malpractice and overwhelming cruelty, but more that those in parliament realised that they could make even more money trading with states who were more self-sufficient, rather than entities in the thumb of a selfish corporation. Although the East India Company disbanded more than a century ago, the company’s influence as a ruthless corporate pioneer, just like its European counterparts, has influenced modern business in many ways. The EIC showed the benefits of multinationalism that contemporary TNCs (Trans National Corporations) still use today. The legacy of the company’s merciless colonialism in the pursuit of profit still rings true in modern society today, as modern day corporations such as Apple and Shell continue to assert influence on foreign soil if through softer, more peaceful yet equally damaging powers. The EIC undeniably played a major role in setting this precedent that continues to shape the global economy, for better or for worse.