Company Rule Reshapes and Drains Bengal
After Plassey the Company runs Bengal for revenue, and Indian weavers lose their markets to Lancashire
Quick facts
- Company rule
- 1757-1857
- Expansion tools
- Annexation, subsidiary alliances, doctrine of lapse
- Textile impact
- Indian weavers undercut by Lancashire mills
- Governing priority
- Land revenue and trade profit
What happened
After Plassey the East India Company governed Bengal directly and expanded across India through annexation, subsidiary alliances with Indian princes, and the doctrine of lapse, by which states without a direct heir were absorbed. Company rule was organized around extracting land revenue and trade profit. Its economic effect on Indian industry was severe: the Library of Congress country study records that millions of people involved in the heavily taxed Indian textile industry lost their markets, as they were unable to compete successfully with cheaper textiles produced in Lancashire's mills from Indian raw materials. Bengal, one of the richest regions on Earth in 1750, was progressively drained, and famine under Company administration killed on a mass scale.
Why it matters
This century turned India into the economic engine of a foreign empire: a supplier of raw materials and a captive market for British manufactures, with its own advanced textile industry deliberately undercut. The revenue-first model and the deindustrialization it caused shaped grievances that the nationalist movement would later voice.
How we know
Company administration, its expansion mechanisms, and the collapse of the Indian textile trade are documented in the Library of Congress India country study, drawing on Company records and later scholarship.
Sources
- Library of Congress, Federal Research Division. India: A Country Study (Company Rule, 1757-1857) · Primary source (author-declared)countrystudies.us · Cited as a "primary" source (no stronger domain match). · Link is live and its text matches the event's key terms (Jul 2026)
- Library of Congress, Federal Research Division. India: A Country Study (The British Empire in India) · Primary source (author-declared)countrystudies.us · Cited as a "primary" source (no stronger domain match). · Link is live and its text matches the event's key terms (Jul 2026)
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Related timelines
- The British Empire → · The British Empire timeline covers the Great Bengal Famine of 1770 under Company rule and the wider machinery of British extraction in India.