The Plunder of Bengal – A Lesson for “Independent” India


Editor’s Note: Tomorrow is India’s Independence Day. We like so many will celebrate it with joy. But, it is important to look back and see how India was plundered under foreign rule. Unless a society keeps feeling the pain and the shame of how it was conquered, the society will keep falling under foreign occupation. Indian society does not remember and does not seem to care. This is why, we feel, India has lost more territory after its Independence than any other major country in the world. Much of the factual material and the quotes below come from the book about the East India Company by Nick Robins. It is a book that every Indian should read and read on every Independence Day. We heard about this book from a friend and a reader in Mumbai. We thank him.


Tomorrow, India will celebrate its 64th year of Independence from British Rule. India has made substantial progress in developing its economy in the last 64 years. Yet, India remains far, far behind what it was in 1750. Indians are blessed with a convenient memory which allows them to forget what happened to them earlier. It allows them to adjust and adapt. This is good because it allows Indian society to look ahead and not get bogged down in the past.

But forgetting history often dooms Indian society to repeat the mistakes, especially those of the past 1,200 years. Constant adjustment leads to mental slavery, to developing softness necessary to survive under foreign rule. The India that was successful once has been forgotten. The qualities that made India great once were shunned in the last 1,200 years and continue to be shunned today.

It is hard to believe today that before 800 CE, India was an aggressive society and that its rulers were focused on expanding Indian rule & Indian culture to all the foreign lands they could get to. Then, somehow in the late 9th century, India turned inwards. Since then, not one single state in North India, not one single King or ruler in North India, ever attacked any other country.

The central tenet of independence is that you have to go to the lands of invaders and destroy them in their own lands to make sure they never invade you again. This concept disappeared from North India about 1, 200 yeas ago. The result was continuous invasions from outside and continuous plunder of India’s riches.

But, no one plundered India the way the British did. Today’s “educated” Indians aspire to be like the British, speak like the British and copy their ways. But, these “educated” Indians are still clueless about the real qualities of those British, the single-mindedness with which a small band of Britishers came to plunder a rich (yes, rich even after 800 years of Uzbeck-Tajik-Afghan plunder) but mentally weak, supine India.

This is why today, we review a terrific book by Nick Robins, an English writer and fund manager, titled The Corporation That Changed The World. It is the story of the British East India Company, a single company that conquered a vast land, a far richer, a far bigger society.

And they did not conquer by military force like the Afghans & Uzbeks. The British conquered India by their intelligence, and by their single-mindedness of purpose. It had never been done before and it probably will never be done again.

And it could only happen to India, a country, a society that simply cannot develop an intense, single-mindedness of purpose. It was India’s fatal weakness and the greatest strength of the British.

The result? Read on.

“The Richest Country in the World”

Author Nick Robins provides facts about what India was in 1750, even after 800 years of looting by the Afghans-Uzbeks. Below are the quotes from Chapter 4 of his book:

  • In the first half of the 18th century,….the Indian subcontinent was then the workshop of the world, accounting for almost a quarter of global manufacturing output in 1750, compared with just 1.9% for Britain.
  • Within the Mughal Empire, Bengal was the richest province (suba), described by Aurangzeb as the ‘Paradise of Nations’.
  • For millennia, Indian cotton clothes out-competed the rest of the world. Even in the first century AD, the Roman historian Pliny was complaining that the extensive importing of cotton fabrics from India was draining Rome of gold. 


Plassey (Palashi) – East India Company’s Most Successful Business Deal

Before Plassey, the ‘balance of trade was against all nations in favour of Bengal‘, wrote Alexander Dow in his 1773 History of Hindostan. After Plassey?

  • The regulatory authority of the Nawab was broken, enabling the Company to achieve its long-desired monopoly over the export trade. One estimate suggests that in the decade after Plassey, Bengal lost two-thirds of its revenues to this commercial plunder.

So what was Plassey and how did it happen? Historians, especially British-trained ones (which includes most Indian historians), view the ‘battle’ at Plassey as a brilliant military victory by Robert Clive. But Nick Robins rightly calls it “East India Company’s most successful business deal.”

The principal players in the game that led to to the 1757 battle at Plassey were the Nawab Siraj-Ud-Daula,  Mir Jafar, a soldier and Siraj-Ud-Daula’s bakshi (paymaster-general), Jagat Seth, the Marwari businessmen unrivalled in northern India for their financial power, and Amir Chand, another of Bengal’s leading merchant princes. The Jagat Seths (Bankers to the World) had built up a financial empire based on extensive moneylending and control of the mint. The merchant princes led by Amir Chand controlled much of the trade in opium and saltpetre.

Nick Robins pinpoints the problem and the result:

  • What was new was the willingness of the conspirators against Siraj-Ud-Daula to ally themselves with what were in effect foreign mercenaries.
  • …leading aristocrats and merchants at the Bengal court believed that they could control the foreign barbarians to their own ends. They proved to be catastrophically mistaken.
  • Bengal was certainly rich, but its governing and merchant elite had little depth (of outlook, of understanding beyond their own immediate society)
  • Set against this was a robust impersonal institution with a highly focused set of priorities….’a collective strength and unity of purpose not available either to Asian merchants or post-Mughal nawabs.

By the time forces gathered at Palashi (Plassey) in 1757, the outcome had been decided. The East India Company installed Mir Jafar as its puppet and began implementing its treaty with Mir Jafar.

  • In the eight years that followed Plassey, the Company placed four nawabs on the throne of Bengal. Each ‘revolution’ was accompanied by the transfer of more land to the Company…along with lavish presents for the Company’s executives…along with …reparations.

Fortune Favors the Determined

Bengal, however rich, was a small part of India, isolated on the eastern end of India. Most of today’s India was then dominated by the Marathi Regime from Pune. The Marathi regime, historians write, was the only power of the 18 century that thought of “India as a whole”. They saw themselves as protectors of India.

The Marathi regime understood the threat of from Europeans and they were the first Indian entity to wage war against the Portuguese. After that, the Portuguese were relegated to a tiny portion of India around Goa. The English were to be the next. But these Europeans were still small fry.

The real conflict was with the Durrani Empire of Kabul under the brilliant Ahmed Shah Abdali. The Marathi regime informed Abdali that the border of his Afghanistan was to be Attock, a town in today’s Northwestern Pakistan and that the rest of North India belonged to Indians. Abdali refused and claimed all of Panjab as his territory in the tradition of prior Afghan conquerors.


(Orange – Marathi rule, Dark Green – Durrani, Light Blue – British Bengal)

The result was the 1761 battle at Panipat, the largest battle of the 18 century in the world. It was the battle that truly changed the history of the world.  Ahmed Shah Abdali won this battle decisively. But he & the Durrani empire was so weakened that the Afghans never invaded India again.

The Marathi regime suffered its worst ever loss. They did come back and win back all of North India. But the centralized power of the regime in Pune was weakened and never reestablished.

The British were the biggest winners of the battle of Panipat. The Marathi regime spent so much energy in reestablishing its status in Central and North India that their offensive against the British in Bengal never took place. The post-1761 history of the world was dominated by the British Empire. And there could be no British Empire without British control of India. And the British would not have controlled India had the Marathe won the battle of Panipat. This is why we say that the 1761 battle of Panipat changed the history of the world.

In 1765, a mere 4 years after Panipat, the ageing, weak Mughal ruler Shah Alam II granted the British East India Company the diwani rights for Bengal, Bihar and Orissa. Now, the British East India Company had the right to tax the people of these Indian states.

After the Marathi regime, no other entity in India had the vision to consider India as a whole. The British East India Company was the only entity that had the clear vision, the total focus and the iron determination to extend its domination from Bengal to the rest of India.

They did and the plunder of India began.

The Scale & Ruthlessness of the Plunder

Author Nick Robins provides a table on page 7 based on figures from OECD:

  • Britain’s GDP rose from 2.88% of World’ GDP in 1970 to 9.10% while India’s GDP fell from 24.44% of World’s GDP to 12.25%. (By 1947, it had fallen to less than 1% based on other figures we have seen).

Why did this precipitous decline happen? According to a quote in the book by Robbins (page 3),

  • the British East India Company simply considered India as a vast estate or plantation, the profits of which were to be withdrawn from India and deposited in Europe.

What happened to Bengal, the place where the British rule began? 

  • In the eight years that followed Plassey, the Company placed four nawabs on the throne of Bengal. Each ‘revolution’ was accompanied by the transfer of more land to the Company…along with lavish presents for the Company’s executives…along with …reparations.
  • By the end of the century, 85-90% of Bengal’s external trade was in the Company’s hands.

The Merchant Class of Bengal that supported the British against the Nawab at Plassey were systematically destroyed. And then the economy of Bengal was squeezed with a ruthlessness Bengal had never seen before. What about the skilled weavers of Bengal that had exported cloth for centuries going back to Rome in 1st century CE?

  • Before the British rule, Bengal’s weavers had higher earnings and a better standard of living than their British counterparts and lived lives of greater
    financial security.
  • All that changed following Plassey….Bengal’s weavers were forced into a position of near slavery….

Robbins quotes the poet Shahid Ali:

              In history, we learned: the hands
              of weavers were amputated,
              the looms of Bengal silenced,
              and the cotton shipped raw
              by the British to England.

The Decline of India and its Lessons

  • ‘We may date the commencement of the decline (of India) from the day on which Bengal fell under the domination of the foreigners’ wrote Alexander Dow in 1772, according to author Robbins.

Robins also writes: 

  • For Jawaharlal Nehru, the most powerful indicator of the harm done by the combined impact of the Company and British Raj was that ‘those parts of India which have been longest under British rule are the poorest today‘ picking out Bengal, Bihar and Orissa for particular mention.

What qualities did England and Europe have that India and rest of Asia did not? Robins writes:

  • He (Portuguese Vasco de Gama) then moved on to Calicut, capturing 20 trading vessels and butchering their crews. More than 800 prisoners had their hands, ears and noses hacked off, the pieces piled into a boat and sent to the local ruler, the Zamorin with a note telling him to make a ‘curry’ with what he found.
  • In the light of these and other incidents, the economic historian Niels Steengaard has concluded that ‘the principal export of pre-industrial Europe to the rest of the world was violence’.


Jawaharlal Nehru should have known that. India should know this well. Before the Europeans, the Afghan & Uzbek invaders like Timur, Ghazni, Ghori and more recently Nadir Shah massacred Indians by the tens of thousands while plundering India. But no one in India ever marched to Afghanistan to massacre the invaders in their homes and lands.

Robins discusses the necessary combination of commerce and violence on page 29;

  • But the (British East India) Company also appreciated the value of conducting ‘commerce with sword in your hands‘, in the words of the Company’s Governor of Bombay, Gerald Aungier, in 1677.
  • The direct application of violence by today’s corporations is thankfully rare. But the links between successful trade and military force remain as powerful as ever.
  • As Thomas Friedman,,,, explains…’McDonald’s cannot flourish without McDonnell Douglas, the designer of F-15s‘.

But Jawaharlal Nehru never understood that. And Indian Society does not understand it to this day.

The only people in India who do are the successors of British in India, the ruling political elite whose rampant corruption is plundering India once again. And they are doing in India’s electo-cracy, a system that fosters fighting among various Indian communities and groups with the sole intent to making the rulers richer & richer.

This makes us wonder whether India is truly independent or still a colony of a new occupier, the political class.

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