Colonial Beginnings: The Portuguese, the Dutch, and the British
This article covers the Dutch East India Company’s competition with the Portuguese and English, their trade focus on Bengal’s textiles and spices, and the eventual decline of Dutch colonial power following conflicts with the British East India Company and the Battle of Plassey.
In a previous segment on the curious case of the Firingi Anthony, I mentioned how colonial rule in the Indian subcontinent first took root with the Portuguese in 1498. They were followed by the Dutch, known as the inhabitants of Holland (the Netherlands), commonly referred to as the Dutch or ‘Olandaj’. The Dutch established the ‘United East India Company’ and ventured into the subcontinent in 1602, primarily for trade. Initially, their main competitors were the Portuguese, and later, the English. Unable to withstand the competition with the English, the Dutch eventually withdrew and set up colonies in Indonesia.
The Dutch colonial presence in the Indian subcontinent spanned from 1605 to 1825. Their East India Company first established itself in Dutch Coromandel, particularly in Pulicat, seeking textiles to exchange for spices from the East Indies. The Dutch eventually focused on Bengal, drawn by its abundant production of cheap, coarse cotton textiles and silk, which were highly valued in the European markets.
In India, Danish colonies included Tranquebar (in Tamil Nadu), Serampore (in West Bengal), and the Nicobar Islands. The Dutch, on the other hand, were defeated by the English in the Battle of Bidara in 1759, marking the decline of Dutch colonial ambitions in India.
Dutch Trade and Conflict in Bengal
The Dutch were known for opening up the sea route around the Cape of Good Hope, facilitating direct maritime trade between Europe and Asia. This route was initially dominated by the Portuguese, who began extensive spice trade from Asia to Europe, establishing a new economic paradigm. Attracted by the lucrative spice trade, both the English and Dutch East India Companies were established at the dawn of the 17th century—the English in 1600 and the Dutch in 1602.
By the mid-17th century, the Dutch and the English had overshadowed the Portuguese in trade. After establishing a trading post in Hooghly, the Dutch, along with the English, began significant trading activities in Bengal around the mid-17th century. These companies traded spices for silver obtained from the ‘New World’. However, they realised that the islands required large quantities of cheap Indian textiles, more so than silver.
Initially, the Dutch focused on the Coromandel Coast for its textile production. However, political instability and frequent conflicts soon made this trade precarious and costly, prompting the Dutch to shift their attention to Bengal. Bengal offered several advantages: it was the largest producer of cheap, coarse cotton textiles, superior in quality to other available fabrics, and there was a rising demand for its silk over Italian and Persian varieties.
Dutch Settlement and Tax Evasion
The Dutch first arrived in Bengal in 1630, establishing a settlement in Pipli. They secured trading rights from the Mughal government on the condition of paying a 3% customs duty on exports. After the Portuguese vacated Hooghly in 1632, the Dutch obtained a new license in 1634 from Subedar Azam Khan to set up a trading post there, which they established sometime between 1645 and 1647. Their first ship, Westzanen, arrived to commence operations.
Taxation often became a bone of contention, as there was no precise mention of the tax rate in their agreement. The Dutch continually attempted to evade taxes, leading to disputes. In 1671, Dutch officials in Hooghly reported to their headquarters in Batavia (present-day Jakarta) that they had evaded at least 25% of the customs duties over the past sixteen years. The scheme was eventually uncovered, forcing the Dutch to pay a hefty sum of one and a half lakh rupees. Despite the regular disputes, in 1678, the Dutch managed to secure a license from Prince Muhammad Azam to pay customs duties at a rate of 4%. This rate was reduced to 3.5% in 1679 and further to 2.5% by Shah Alam’s decree in 1709, which was ratified by Emperor Jahandar Shah in 1712. He also exempted Dutch goods from transit duties across the Mughal Empire.
The Dutch Impact on Bengal’s Economy
By the early 18th century, about 40% of the annual value of Asian goods exported by the Dutch East India Company to Holland consisted of goods from Bengal. This underscores the region’s importance in the company’s Asian trade operations. More than 50% of the total value of textiles exported by the Dutch from Asia were from Bengal. Thus, Bengal emerged as a crucial hub for the Dutch East India Company’s activities, not only in India but across Asia.
The English East India Company, too, found Bengal to be a veritable gold mine, referring to it as the “flower of the company’s garden” and the “most cherished gem.” The increasing demand for Indian textiles, especially from Bengal, revolutionised consumer tastes in Europe, leading to a surge in demand. This shift significantly bolstered the Dutch and English positions in Bengal’s maritime and international trade, from the 1680s to the mid-18th century.
However, the British victory at the Battle of Plassey in 1757 marked a turning point. The English East India Company and its officials, leveraging their control over Bengal’s administration and economy, systematically expelled other European and Asian competitors, establishing a monopoly over Bengal’s trade. This set the stage for the British Empire’s dominance in India, reshaping the subcontinent’s history in ways that would reverberate for centuries.
What's Your Reaction?
