One thing that motivated the British to trade in the East, was seeing the immense wealth of the ships that made the trip there, and back.This was the largest vessel that had ever been seen in Britain, her hull full of eastern cargo: gold, spices, calicos, silks, pearls, porcelain, and ivory.
The charter granted a monopoly of all English trade in all lands washed by the Indian Ocean (from the southern tip of Africa, to Indonesia in the South Pacific). Unauthorized (British) interlopers were liable to forfeiture of ships and cargo. The company was managed by a governor and 24 directors chosen from its stockholders.
The three major products that the EIC brought back from India were pepper, clothing, and tea.
Five vessels leave Woolwich for the Spice Islands or East Indies led by James Lancaster holding six letters of introduction from The Queen, each with a blank space for the name of the local King. Lancaster intended to trade Iron, lead and British broad cloth for Spice, but made little impression the Dutch controlled trade, and the broad cloth was deemed to heavy to be of value by those living in the tropics.
Numerous trading posts were established along the east and west coasts of India, and considerable English communities developed around the three main towns of Calcutta, Bombay, and Madras, with each of these three roughly equidistant from each other, along the coast of the Indian Ocean
The British Company’s defeat of the Portuguese in a skirmish off the coast of India (1612) won them trading concessions from the Mughal Empire. The company settled down to a trade in cotton and silk piece goods, indigo, and saltpeter, with spices from South India. It extended its activities to the Persian Gulf, Southeast Asia, and East Asia.
Sir Thomas Roe was instructed by James 1 to arrange a commercial treaty with Emperor Nurudin Salim Jahangir. This gave The Company exclusive rights to reside and build factories around Surat in exchange for rare commodities from Europe. This provided a secure base for operations to wage trade wars with Portuguese and Dutch governments and merchants.
The Dutch were every bit as jealous about preserving these trade goods for themselves as the Spaniards and Portuguese were. The British were virtually excluded from the Dutch East Indies (Indonesia) after the Amboina Massacre in 1623.Not able to defend itself against the Dutch, the company conceded that region to them, and focused instead on what must have been considered a consolation prize, India.
Weavers, dyers and linen drapers in England protest that imports of Indian cloth are threatening their own industries. They riot and attack East India House in London. Initially, The Company responds by re-exporting Asian textiles to other countries in Europe. But market forces soon overshadow the cries of protesters, and Asian textiles continue to be hugely popular in England throughout the 18th century
The Company receives Chinese permission to trade from Guangzhou (Canton) importing silk, tea and porcelain. Trade was made with the Chinese Hongs (trading companies) who controlled trade within China. In England, the demand for tea booms, in 1664 The Company placed an order for Tea for 100lbs, by 1750 annual imports had reached 4,727,992Lbs. Having initially traded tea for silver, the English are concerned that too much silver is leaving their shores. They begin to trade the highly addictive drug opium for tea, this leads directly to the opium wars between Britain and China, as the Chinese government
By 1668 The Company had established factories in Goa, Chittagong, Bombay, Madras and three small villages in the east of India called Sutanati, Gobindapore and Kalikata which was renamed Calcutta in 1690. The major factories became the walled forts of Fort William in Calcutta, Fort St George in Madras and Bombay castle, which developed into the great Indian Cities of today. Of these forts Fort William remains active as the HQ of the Eastern Command of the Indian Army.
Modern calculations reckon that in 1700, the Chinese and Indian economies were each eight to nine times larger than the British economy.Not only were the British disappointed that the immense wealth of India and China wasn’t flowing into their island; they were also disturbed by the large outflow of silver to those eastern regions, from Britain. If the British couldn’t convince the Indians to accept their goods in exchange, the British had to pay for the eastern goods with silver.