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How the Treaty of Alinagar set the stage for the English East India Company’s political rise

GS-1: Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues.


The Treaty of Alinagar, signed on February 9, 1757, was an agreement between Bengal's Nawab Siraj udDaula and the English East India Company after decades of tension that escalated into conflict. 

It gave the British a stronger position in Bengal and set the stage for the British colonial expansion in India, turning the East India Company's interests from economic to imperial.


Background: A Trading Company arrives in India

  • The English East India Company was established in 1600 by a royal charter granting it monopoly of trade from England in the East and the right to finance its operations with gold bullion to counter Dutch influence. 
  • Despite this, the charter did not give the company the explicit authority to colonize or engage in imperial conquests. 
  • The company officially began trading with India in 1613 with support from a royal farman from the Mughal Emperor Jehangir, allowing the company to open factories and warehouses. 
  • The company maintained a strong business relationship with local rulers until the mid-18thcentury, controlling various trading posts on both coasts, but had yet to actively expand its territories. 
  • It's worth mentioning that many Company officers engaged in private trade and made significant personal fortunes while serving in India.


Conflict in Bengal

  • By the 18thcentury, British communities thrived in three main trading towns:Bombay, Madras, and Calcutta
  • Of these, Calcutta was the most significant, with Bengal goods making up almost 60% of all English imports from Asia. 
  • Mughal Emperor Aurangzeb granted the Company the right to trade in Bengal for an annual payment, but after his death in 1707, the Mughal Empire began to decline, leaving the British relying on the legitimacy of the Mughal crown to trade. 
  • The Mughal Emperor Farrukhsiyar issued a farmaan in 1917 to establish favorable terms for the Company's trade, but it faced local opposition from Nawab Murshid Quli Khan, the new autonomous ruler of Bengal
  • The Nawab refused to extend duty-free provisions to cover private trade of Company officials, leading to massive fraud and constant conflict. 
  • This ultimately resulted in the realization that controlling territory would be necessary for expanding British business in India and possible in the fragmented subcontinent.


Calcutta Captured by Siraj ud Daula as Tensions Escalate

  • The English East India Company faced tensions with the Nawab of Bengal and engaged in military conflictswith the French in South India in the late 1700s. 
  • In 1755, they renovated Fort William in Calcutta without permission, further straining relations with the Nawab
  • In 1756, an Indian trader took refuge in the fort, leading to a military threat and crackdown by the Nawab, Siraj udDaula. 
  • In June 1756, the Nawab's forces captured the British trading settlement of Calcutta and imprisoned a number of British prisoners of war in a small, cramped prison cell, known as the "blackhole".
  • Many of the prisoners suffocated or died from heat exhaustion in the cramped conditions.
  • Siraj took over a Company factory at Cossimbazar, attacked Fort William and eventually captured Calcutta, renaming it Alinagar.Top of Form

Siraj's Unsustainable Position

  • The Nawab's position was uncertain after capturing Calcutta, as he was facing opposition from the English East India Company under Robert Cliveand the looming threat of the Afghans under Ahmad Shah Abdali. 
  • The Company forces defeated the Nawab's army outside Calcutta in early 1757 and he was forcedto sign the Treaty of Alinagar on February 9, 1757, which restored all the privileges granted by Farrukhsiyar's 1717 farmaan, including duty-free trade, fortification construction, and mint operation.


The East India Company Transforms into a Colonial Power

  • The story of the Treaty of Alinagar highlights the rise of the East India Company as a formidable political force. 
  • Despite appearing to uphold the Nawab of Bengal's sovereignty, the treaty's provisions favored the Company and gave them greater power and influence.
  • Tensions continued to escalate as the British saw the opportunity to expand their presence in Bengal, while the Nawab aimed to reclaim power and prestige. 
  • This led to the famous Battle of Plassey on June 23, 1757, where Robert Clive's army emerged victorious against the Nawab, due to defection from key members of their army.
  • The Battle of Plassey marked the transformation of the East India Company into a full-fledged colonial enterprise, with an interest in territorial control and not just trade.
  • For many, the history of British colonial rule in India starts at Plassey, however, its origins can be traced back to the Treaty of Alinagar. Though it may be a minor event in history, understanding the events leading up to it provides valuable insight into early colonial expansion in India.


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Fact File

Adani’s index weightage cut: What is MSCI, and why does it matter?

  • MSCI (Morgan Stanley Capital International) indices are a widely used benchmark for measuring the performance of stock market indices. 
  • Any changes to MSCI indices or any new additions to their indices can have a significant impact on the stock market, as they are widely followed by investors and asset managers.


  • MSCI is ownedby the multinational investment management and financial services company Morgan Stanley.
  • It is a leading provider of investment decision support tools and services, including indices that track the performance of stock markets around the world.
  • It designed to measure the performance of various stock markets and are used as a benchmark by investors and asset managers when making investment decisions.

Types of MSCI Indices

  • MSCI World Index: tracks the performance of 23 developed markets
  • MSCI Emerging Markets Index: tracks the performance of 25 emerging markets
  • MSCI Frontier Markets Index: tracks the performance of 31 frontier markets
  • MSCI EAFE (Europe, Australasia, Far East) Index: tracks the performance of developed markets in Europe, Australasia, and the Far East
  • MSCI ACWI (All Country World Index) Index: tracks the performance of both developed and emerging markets.

MSCI India Index

  • The MSCI India Index is a stock market index that measures the performance of the Indian equity market. 
  • It is part of the MSCI Emerging Markets Index series and is designed to provide a comprehensive and representative benchmark of the Indian equity market.
  • Itincludes large and mid-cap Indian companies that are listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). 
  • The index is calculated based on free float-adjusted market capitalization, which considers the portion of a company's shares that are available for public trading.
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