Mains Daily Question
Oct. 19, 2020

  1. Explain how trade monopolies of East India Company were diluted by different Charter Acts passed by the British Parliament?



  • Brief Introduction on how EIC got trade monopoly and why it was diluted.

  • Then explain how different charter acts diluted the trade monopoly of EIC.

  • Conclude appropriately.

Model Answer

The British came to India in 1600 as traders in the form of East India Company (EIC), which had the exclusive right of trading in India under charter granted by Queen Elizabeth I.  After the Battle of Buxar (1764), the EIC got Diwani rights also. However, party and parliamentary rivalries, political ambitions of statesman and commercial greed of merchants, jealousy of other sections of the British society due to the large wealth brought by the Company officials back to Britain etc led to the gradual transfer of power from company to crown by dilution of trade monopolies of East India Company.

  • Charter Act of 1793: It gave the East India Company a monopoly to trade with East only for a period of 20 years.

  • The Charter Act of 1813
    • It ended the trade monopoly of East India Company in India.

    • But the company’s monopoly to trade in tea with India and trade with China was kept intact.

    • Trade in India in all the commodities except tea was thrown open to all British subjects.

  • The Charter Act of 1833
    • It ended the monopoly in trade with China and the monopoly to trade in tea in India.

    • Henceforth all restrictions on European Immigration into India were abolished. The Europeans were allowed to settle and own property in India.


After the Battle of Plassey (1757), Company had started using its political control to acquire monopolistic control over Indian trade and production but problems such as relations of East India Company and its possessions to the government in Britain, ideology of free market theory of Adam Smith etc. led to the dilution of monopoly of the Company.

Subjects : Modern History
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