by Prathamesh Mendki 24 October 2023
The Hindustani slang word “loot” meaning theft was one of the first Indian words to appear in the English language. The Oxford English Dictionary claims that until the late 18th century, when it all of a sudden became a prevalent term throughout Britain, this word was seldom ever used outside of the plains of north India. But because of an atrocious, vicious and tyrant corporation named “Governor and Company of Merchants of London Trading into the East Indies”, or infamously, the “British East India Company”, the word “loot” had become popular in almost every household in the different regions of Indian Subcontinent.
In a short period, 250 company clerks who were supported by 20,000 locally recruited Indian soldiers had effectively taken control of Bengal. A multinational corporation had become a belligerent colonial power.
With the help of its quickly expanding security force (by 1803, its army had increased to 2,60,000 soldiers), it easily conquered and captured an entire subcontinent. Surprisingly, this only took a little over 50 years. The company’s first significant territorial conquests started in Bengal in 1756, and 47 years later its influence had spread as far north as Delhi, the capital of the Mughals. By that time, nearly all of India south of Delhi was effectively under the company’s effective control from a boardroom in the City of London. Around 1765, a Mughal officer by the name of Narayan Singh questioned, “What respect is left to us when we have to receive orders from a small group of traders who have not yet learnt to wash their bottoms?!”
Although we still refer to the British as having conquered India, the truth is far darker. At the end of the 18th century, it was a dangerously uncontrolled private firm, run in India by a volatile psychopath named Robert Clive, and with its headquarters in a one-room office in London with only five windows.
FORMATION AND THE RISE OF THE EAST INDIA COMPANY
At a meeting held on September 24th, 1599, at the City of London’s Founders Hall, 80 merchants and explorers decided to petition Queen Elizabeth I to establish a company. A royal charter was granted to a group of 218 individuals who were the Governor and Company of Merchants Trading to the East Indies a year later, granting them a 15-year monopoly over “trade to the East”.
A joint-stock company, which could issue tradeable shares to any number of investors and raise much larger amounts of capital, was authorised to be established by the charter instead of a family partnership, which had previously been the norm across most of the world. The “Muscovy Company” had acquired its charter in 1555 and was the first officially recognised joint-stock corporation, and 44 years later, the East India Company was established. The EIC was granted the right “to wage war” as necessary, yet the charter made no mention of the EIC possessing land abroad.
The Mughals’ catastrophically quick fall from power in the 18th century allowed for the East India Company’s quick emergence. The Mughals still held power over a sizable empire that stretched from Kabul to Madras as late as 1739, when Clive was just 14 years old. However, the 15 lakh-man Mughal army was routed that year when the Iranian invader Nadir Shah descended the Khyber Pass with 1,50,000 cavalry. A caravan of riches, which included Shah Jahan’s magnificent peacock throne, the “Koh-i-Noor”, the largest diamond in the world (and the then-famous “Darya Nur”), as well as 700 elephants, 4,000 camels and 12,000 horses carrying waggons all laden with gold, silver and precious stones, was brought to Persia by Nadir Shah 3 months later. It was estimated to be worth 70 Crores (£87.5 Million). This haul was significantly more valuable than what Clive eventually took from Bengal, a peripheral region.
The French “Compagnie des Indes” also started producing its coinage the following year, and without anybody to stop them, the French and the English quickly started militarising their operations and drilling their sepoys. The EIC soon found itself travelling the world. The EIC transported opium to China and then participated in the opium wars to take control of a base offshore in Hong Kong and protect its lucrative drug monopoly. Chinese tea was transported to Massachusetts in the west, where it was dumped in Boston Harbour, sparking the start of the American War of Independence.
When the EIC overthrew the Mughals in Delhi in 1803, it had trained a private security force of some 2,60,000, which was even double the size of the British army. It also had access to greater armament than any other nation-state in Asia. One of its directors acknowledged that it was “an empire within an empire”. By this time, it had also built much of London’s docklands, developed a sizable and sophisticated administration and civil service, and was on track to produce close to half of Britain’s trade. It makes sense why the EIC referred to itself as “the grandest society of merchants in the Universe” today!
A RIDICULOUS “FINANCIAL BLEEDING”
Very soon after the Battle of Plassey (23rd June 1757), what has been referred to as “the financial bleeding of Bengal” started. Even without including the so-called presents that the Company routinely demanded from neighbourhood merchants, the company gained significant sums of money with the Nawabs under their control from territorial revenues as well as from the special privilege of duty-free trade in the thriving Bengal economy. “The economic figures speak for themselves”, cited historian William Dalrymple. When the East India Company was established in 1600, Britain produced 1.8% of the global GDP while India produced 22.5%. These numbers had largely been reversed at the height of the Raj, as India was demoted from the top manufacturing power to a poster child for hunger and poverty.
Nearly a fourth of the members of parliament in London possessed stocks in the East India corporate following Plassey, however, the majority of the loot from the “financial bleeding” went to Bengali corporate officials who worked for British companies. Thus, the British establishment benefited greatly commercially from the British Empire’s rule over India.
Although the British are frequently depicted as the Mughals’ heirs in history textbooks, it is crucial to remember that the British did not actually challenge the Mughals while they were still a force to be reckoned with. Although officially even the Nawab of Bengal, whom the British vanquished, was their subject, British administration began after the Mughals’ strength had begun to crumble. Despite not paying much regard to the Mughal emperor’s orders, the Nawab continued to swear devotion to him. And, despite the absence of the mighty empire itself, the Mughal authority over India continued to be widely recognised for its imperial status.
When the so-called “Sepoy Mutiny” challenged the foundations of British India in 1857, the various anti-British factions involved in the united uprising could unite because they all agreed that the Mughal emperor had the formal authority to rule as the Indian Emperor. The freedom fighters recognised the emperor as the ruler of all of India even though he was reluctant to lead them. But Bahadur Shah Zafar, the 82-year-old Mughal emperor, was much more interested in his Shayri (poetry) than in engaging in battle or controlling a nation like India. He was unable to do anything to aid the 1,400 unarmed Delhi civilians who were massacred by the British when the rebellion was brutally put down and the city was completely damaged. He was exiled to Burma, where he eventually passed away in 1862.
Speaking of the Economy…
Using India’s export surplus earnings as the benchmark and compounding it at a 5% rate of interest, the drain between 1765 and 1938 was estimated to be £9.2 trillion (equivalent to $45 trillion). Indians never received credit for their own gold and foreign exchange gains. Instead, the local manufacturers in this area were ‘paid’ the rupee equivalent from the budget, which is something you would never see in a sovereign state. The amount of the central government budget that was “drained” ranged between 26-36%. Obviously, it would have made a significant impact if India’s enormous foreign earnings had been kept domestically. India would have been substantially more advanced, with much better social welfare and health outcomes and between 1900 and 1946, there was essentially no rise in per capita income, despite the fact that India recorded the second-highest export surplus revenues in the world for the three decades up to 1929.
Such stagnation is not surprising given that Britain nonchalantly retained all of the earnings. Ordinary folks perished like flies as a result of sickness and undernutrition. It is astonishing to learn that in 1911, the average life expectancy for Indians was only 22 years. The availability of food grains is the most significant indicator, though. The annual per capita consumption of food grains fell from 200kg in 1900 to 157kg on the eve of World War II and further to 137 kg by 1946 as a result of high tariffs that reduced the purchasing power of common Indians. Today, not even the least developed nations in the world can compare to where India was in 1946.
Systems for collecting taxes were established by all colonising nations. The district administrator’s given title (then) was “Collector”. In 1765, when the Company first acquired the power to collect taxes in Bengal, its staff went utterly frenzied with greed. The Company tripled Bengal’s tax collection between 1765 and 1770 compared to the former Nawab’s reign, which turned out to be a disaster for the poor, according to R.C. Dutt, a civil service officer in the British Raj. People were pushed to famine when the Company took over and forcibly tripled collections over a five-year period because the Nawab was already collecting sufficiently high taxes. In Bengal, there was a severe famine in 1770 that killed at least 1 crore (10 million) people (which is covered in the later section of this article).
The Company used between a quarter and a third of its net revenue receipts from 1765 until the Crown took control to buy export items from the peasants. The peasants themselves were unaware that they were being taken advantage of, and this was an unusual use of taxation. The company higher-ups were very smart, as the producer of the crop definitely himself would have exclaimed, “Dal mein kuch to kala hai!” (Something fishy is going on here) if the same Company agent who collected the producer’s tax had also purchased his items free of that tax. The Company agent who used the tax money to purchase produce, however, was a different individual and completed this task at a different time than the Company agent who collected the tax. Because of this, the producers were never able to link the two and fell into the trap easily.
Without colonialism and the drain, a contemporary capitalist world would not be what it is now. The main reason for this is because between 1780 and 1820 when Britain was going through its industrial revolution, the combined drain from Asia and the West Indies represented around 6% of the country’s GDP, or about its savings rate. After the middle of the 19th century, Britain had current account deficits with Continental Europe and North America while also making significant investments there, which resulted in capital account deficits. The two deficits represented these regions’ significant and growing balance of payments (BoP) deficits.
How was it feasible for Britain to export so much money, which was used to create factories, roads, and railways in continental Europe and the United States? Well, it used the financial gold and forex gained by the colonies, especially India, to make up its trade deficits with these areas. Every unexpected expense, such as war, was included in the Indian budget, and anything that India wasn’t able to cover with its yearly exchange gains was represented by debt, on which interest accrued heavily.
THE INDIAN HOLOCAUST(S)
When it came to establishing its administration in India, the British had a merciless economic objective that excluded any form of empathy for Indians. The earliest of the many cruel famines, which occurred in 1770, was horrifyingly violent. The first indications of such a severe famine appeared in 1769, and the famine persisted until 1773, it claimed the lives of around 1 crore (10 million), many more than the Jews imprisoned during the Second World War. One-third of Bengal’s population was wiped out by it.
John Fiske (American historian and philosopher) claimed in his book “The Unseen World” that the Bengal famine of 1770 was significantly more deadly than the Black Plague that terrorised Europe in the fourteenth century. Peasants were obligated to pay a tribute of 10-15% of their cash harvest during the Mughal era. As a result, the monarchs had a comfortable treasury and the peasants had a vast safety net in case the weather did not cooperate for subsequent crops.
The East India Company took over the duty of collecting tributes from the then-Mughal ruler Shah Alam II after the Treaty of Allahabad was signed in 1765. To put down the insurrection, the British insisted on naming them “tributes” rather than taxes, and overnight these tributes rose to 50%. Even the fact that money had been exchanged was unknown to the peasants (still thinking that their paid money would go to the Emperor). Crop failures in part had become extremely common in the life of an Indian peasant. Because of this, the extra stock that was left over after paying the tributes was crucial to their ability to survive. However, this surplus quickly declined as a result of the higher taxes. The British had also issued sweeping directives for cash crop cultivation after ousting the Mughal emperors. These were created with export in mind. As a result, farmers who were accustomed to farming paddy and vegetables were now compelled to grow indigo, poppy, and other plants with high market values but no benefit to a populace that was going hungry. In the event of a famine, there was no reserve of eatable crops. That’s exactly the difference between a Drought and a Famine – The drought comes on by typical natural factors but such disastrous famines were brought about by the single-minded pursuit of profit. For those who were impacted, no assistance was offered. Instead, taxes were raised to make up for any lost income. To make it worse, the ones who survived the famines had to pay the taxes of those who perished!
Some of the other deadliest famines ever documented in history occurred in India during the British Raj, notably the Great Famine of 1876-1878, which killed 61 Lakh to 1.1 Crore (6.1 to 10.39 Million) Indians, and the famine of 1899-1900, which killed 12 Lakh to 1 Crore (1.25 to 10 Million) Indians. Recent studies, such as those by Mike Davis and Amartya Sen, contend that British policies in India further contributed to the severity of the famines.
The first cholera pandemic also had started in Bengal and by 1820 had spread throughout all of India. During this outbreak, nearly 10,000 British soldiers and untold (undisclosed) numbers of Indians perished. Over 1.5 Crore (15 Million) deaths are thought to have occurred in India between 1817 and 1860. Between 1865 and 1917, nearly 2 Crore (23 Million) more people perished. The Middle of the 19th century saw the beginning of the Third Plague Pandemic, which eventually extended to all inhabited continents and killed 1 Crore (10 Million) Indians in India alone. The first microbiologist to create and use vaccines against cholera and bubonic plague was Waldemar Haffkine, who spent most of his time working in India.
Winston Churchill, the “esteemed” British Prime Minister who led the country through World War II and delivered England from a monster like Hitler, exhibited alarming callousness towards the raging hunger that was consuming Bengal’s population. He, very casually, switched the food and medical supplies intended for the starving victims to the already well-fed forces in Europe. When asked about it, he responded, “Famine or no famine, Indians will breed like rabbits”. In a message to him, the then-Delhi government described the terrible destruction and the number of fatalities. “Then why hasn’t Gandhi died of starvation yet?” was the only response he could deliver (“Indians are a beastly people with a beastly religion”, “Objections of India Office are unreasonable. I’m strongly in favour of using poisoned gas on uncivilised tribes”, are some of the most pitiless quotes of a “truly great Briton” Churchill, who is responsible for at least 42 Lakh (4.2 Million) Indian deaths in the Bengal Famine!!!).
A FORGOTTEN LEVERAGE – LOOTING THE WELL-DESERVED ‘CREDITS’ AS WELL!
Former Commander-in-Chief of the British Indian Army, Field Marshal Claude Auchinleck, once said that “Britain couldn’t have come through both wars (World War I & II) if they hadn’t had the Indian Army”. The Indians were known to be some of the most ferocious fighters in the world from ancient times and the British could only establish its austerity because there were a major chunk of Indians in the royal army.
World War 1…
The British Indian Army initially fought on the Western Front in World War I against the German Empire. Khudadad Khan received the Victoria Cross at the First Battle of Ypres, making him the first Indian to do so. Additionally, Indian divisions were dispatched to Gallipoli, German East Africa, and Egypt, and approximately 7,000 Indian soldiers fought in Mesopotamia against the Ottoman Empire. While some divisions were moved overseas, others had to stay in India to perform internal security and training tasks as well as monitor the North West Frontier. Over 10 lakh (1 million) Indian soldiers served abroad, and 62,000 of them lost their lives and another 67,000 sustained injuries. At least 75,000 Indian soldiers perished in all during the ‘great’ war. Just imagine, what if Gandhi had launched the ever-famous non-cooperation movement amongst the soldiers of the British Indian Army! (But guess what, he did the exact opposite of encouraging the maximum number of Indians to join the army!!). Anyways…
The British Indian Army continued to battle after World War I ended; they took part in the Waziristan Campaign from 1919 to 1920 and again from 1920 to 1924. They also fought in the Third Afghan War in 1919. Operations against the Afridis took place in 1930-1921, those against the Mohmands in 1933 and once more in 1935, and finally operations in Waziristan in 1936-1939 (again), just before World War II broke out.
World War 2…
Now, British India sent about 25 Lakh (2.5 Million) men to fight under British leadership against the Axis powers as one of the Allied Nations. American efforts supporting China in the Asian theatre were also based in India.
In addition to defending the Indian subcontinent from the Japanese forces, which included British Burma and the Crown colony of Ceylon, Indians also distinguished themselves in battles throughout the world, including those in Southeast Asia, the North African Campaign against fascist Italy, and the European theatre against Germany. Even after the Japanese surrendered in August 1945, Indian troops were transferred to former colonies like Singapore and Hong Kong. In World War II, at least 87,000 Indian soldiers and 30 lakh (3 million) civilians were perished.
Had it not been for the colossal number of Indians fighting on the side of the British, so-called Great Britain would have been ‘done & dusted’ by the Luftwaffe (German Airforce) long before the Americans and the Soviets made their entries in the war. So if you ever watch a movie/series/documentary which is based on the ‘gallant’ strategies of that old punk Churchill in World War 2, just remember the fact that they achieved success because the Indian soldiers implemented them efficiently on the battlefield by taking an enormous amount of devastation head-on!
THE CONCLUSION
If Britain’s greatest achievement was the creation of a single political entity known as India, realising the dreams of visionary Indian emperors like Chandragupta Maurya and Chhatrapati Shivaji Maharaj, then its greatest failure must be that initial Brexit, which saw the country leave the land it had claimed to rule for the betterment, leaving behind millions of dead, 17 million displaced, billions of Rupees worth of property destroyed, and the flames of civil unrest. The terrible way in which the British “Raj” in India came to an end is the clearest indication of its shortcomings.
The history of contemporary India is intricately entwined with two & half centuries of British colonialism, and decades after gaining independence, our country has continued to bear the burden of its colonial past in a variety of overt and covert manifestations. Today, the Government has been gradually moving India away from these relics of British rule over the past few years, and various actions have been taken in a number of domains to firmly establish the identity of New India, freeing it from its colonial history.
India has now reached a turning point and is moving quickly in the direction of a future characterised by assurance and “Aatmanirbharta”. The nation will go forward with more vigour as it sets new paths in the international arena once it is liberated from the constraints of its colonial past, strengthening the foundation of its sovereign identity as envisioned by its vibrant Constitution.
Sources:
- https://www.theguardian.com/
world/2015/mar/04/east-india- company-original-corporate- raiders - https://www.theguardian.com/
world/2021/jun/29/british- empire-india-amartya-sen - https://www.livemint.com/
Companies/ HNZA71LNVNNVXQ1eaIKu6M/ British-Raj-siphoned-out-45- trillion-from-India-Utsa- Patna.html - https://yourstory.com/2014/08/
bengal-famine-genocide - https://www.aljazeera.com/
opinions/2022/12/2/how- british-colonial-policy- killed-100-million-indians - https://www.aljazeera.com/
opinions/2017/8/10/the- partition-the-british-game-of- divide-and-rule
