• The European traders who came to India have formed themselves into trading companies. These trading companies were issued a Charter by their respective governments.
  • The charter generally empowered theses Companies to wage war, conclude treaties, conquer and occupy territories, build fortresses, etc. They had the right to negotiate with the kings, Nawabs and chieftains ruling in different parts of India.
  • The English came to have an upper hand and began conquering India. By 1856-57 the whole of India except Goa, Diu and Daman, which remained as Portuguese possessions and Pondicherry which remained as the French possession, came under the British East India Company’s rule.
  • The British Government encouraged and supported this trading Company in its ambitions. Initially, the British Company established with the permission of concerned authorities, a few trading centres called “factories” but were actually “forts”. Thus, the merchant members of the Company also became warriors. 

Evolution of British Paramountcy

  • Lord Warren Hastings, first de facto Governor-General of India from 1773 to 1785.
  • The British East India Company pursued an aggressive policy of territorial expansion from early eighteenth century under Lord Hastings the first Governor General of India (1813).
  • Under the policy of paramountcy, the company claimed that its authority was paramount or supreme; hence its power was greater than that of Indian states. It steadily spread its political domination over the country by a series of wars. 
  • The chronology of events relating to the establishment of British power in India is as follows:
    1. Winning the three Deccan Wars of 1746-48, 1748-54 and 1756-63, the English drove out the French from their hold in South India and became the dominant power there.
    2. The battles of Plassey (1757) and Buxar (1764) made the English masters of Bengal, Bihar and Orissa.
    3. By the Pitt’s India Act of 1784 the British Government assumed powers over the political and administrative activities of the East India Company.
    4. Under Instructions from the British Government Lord Cornwallis annexed a considerable portion of Tipu Sultan’s territory.
    5. During 1798-1805, implementing the policy of ‘Subsidiary Allaince’, Lord Wellesley brought Hyderabad under British control and Gwalior, Baroda, Indore, Nagpur and Poona under direct influence.
    6. During 1813-1823 Lord Hastings subdued the Marathas, the Central States of Rajputana and Gurkhas of Nepal.
    7. Lord Emherst, who succeeded Hastings, defeated the Burmese.
    8. By the two Sikh Wars of 1845-46 and 1849 the British annexed the Punjab.
    9. In 1856 the principality of Oudh was annexed.
    10. Under Lord Dalhousie who came to India in 1848 as Governor-General through the “Doctrine of Lapse” several smaller principalities were taken over by the British.
    11. After the above conquests by the British, Goa, Daman and Diu, Dadra and Nagar Haveli remained as Portuguese possessions and Pondicherry, Mahe and Karaikal as the French possessions in India.
    12. The transfer of the Government of India from the East India Company to the British Crown took place on 1st November, 1858.

The above timeline shows how the Indians lost their Independence and came to be ruled by the East India Company under various Governor Generals (lords)  of the company and later by the British Government. 

Economy and Policy under British Paramountcy

  • In 1800 CE, India amounted to a whopping 20% of the total world manufacturing output. But, by the year 1900, India had become synonymous with poverty, its exports accounted for mere 1.7% of the total world trade, and more than 30 million people (more than 10 percent of India’s population) died of starvation in the 82 years of British rule.
  • Paul Kennedy in his book ‘The Rise and Fall of Great Powers’ gives following statistics of how Indian and the British fortunes reversed between 1750 – 1900. The reversal also coincides with ascendancy of British power in India.
  • After 1818 when British became the major power in India Indian manufacturing output rapidly declined while British increased. This can correlate the ascent of British rule in India and its correlation to India’s fortunes.
  • In 1757 British captured Bengal (and Bihar), in 1799 they captured Mysore, in 1818 Marathas, the then largest power in India surrendered, and in 1849 British captured the Sikh kingdom of Punjab.
  • With the establishment of political authority, the British rulers deliberately fostered the growth of British trade and commerce at the cost of the Indian trade. The Indian trade was ruined through restrictive trade practices. 
  • During the early stages of Industrial revolution, Indian goods that were exceedingly competitive were levied 70 to 80 percent duties.
  • Even later, the machine made British goods enjoyed 10 to 27 percent duty advantage over Indian goods manufactured by traditional means.
  • The British historian of India, Wilson observes: “It was stated in evidence in 1813 that cotton and silk goods of India in the period could be sold for a profit in British markets at a price of 50 to 60 percent lower than those fabricated in England… Without the 70 and 80 percent duty on the value of Indian textiles, the mills of Paisley and Manchester would have been stopped in their outset.” 
  • Parliamentary inquiry report of 1840, states that while the British cotton and silk goods were imported into India at a duty of 3.5 per cent and woollen goods at 2 percent, Indian goods imported into Britain had a duty of 10 percent for cotton, 20 percent for silk and 30 percent for woollen goods.

The Policy of Subordinate Isolation

  • A new phase of relations with the princely states began with the coming of Lord Hasting. He wanted to establish British paramountcy over Indian Princely states.
  • In his treaties with the latter, instead of treating them on terms of equality, he forced them to act in subordinate cooperation. The prices lost their external sovereignty completely. Even in internal matters, British residents interfered and imposed their decisions on the rulers.
  • As Lord Hastings himself noted in his private journal, “Instead of acting in the character of ambassador, he (Resident) assumes the functions of a dictator; interferes in all their private concerns, countenances refractory subjects against them and makes the most ostentatious exhibition of his exercise of authority.”
  • Lord Hastings brought into subsidiary system 145 states in central India, 145 states in Kathiawar, and 20 states in Rajputana.
  • He did not want to annex these states but wanted to place them in a state of subordinate isolation. Wherever subsidiary system was introduced, the rulers became irresponsible and maladministration prevailed.
  • Although theoretically the existence of Princely states as separate entities was recognized and guaranteed in the treaties, practically many princely states were annexed.
  • In 1841, the Court of Directors directed the Government of India not to abandon any “just and honourable accession of territory and revenue. Annexation was justified on the ground of misgovernment by native rulers. 
  • In the following years after the retirement of Lord Hastings, there was rapid increase of the company’s influence in the internal administration of the states.
  • The British Residents were usually the instruments of communication between the government of India and the rulers of the Indian states. Gradually their powers and status increased. Dalhousie annexed on two grounds: doctrine of lapse and misgovernment by native rulers.
  • With the continuous assertion of company’s supremacy and the adoption of subordinate cooperation, the commercial body, East India Company became the executive power in India.
  • Thus, the British Residents posted in each state carried on the whole administrative and the military function of the Indian states. By the charter Act of 1833, the company was asked to accentuate its commercial business. With the act a radical change of the company’s attitude towards the Indian states was noticed.
  • The policy of annexation and of states whenever and wherever possible way was laid by the court of directors in 1834. The governor-generals of this period were true annexationists.
  • Annexation of the territories was the chief instrument for the extension of the territories by the British. However, the annexations were made to acquire a new revenue territory or on the ground of misgovernment due to the failure of the natural heir of the Indian states.
  • Even after the establishment of the undisputed supremacy by the east India Company in 1818, the relation between the Indian states and the Company was chaotic, indefinite and contradictory.


  • The paramountcy policy of the Governor-General is a claim to supremacy that has been disputed by Indian citizens.
  • The policy was enacted to provide a clear and concise framework for the governance of India, but it has been met with criticism by those who argue that the Constitution of India provides for a more democratic system of government.
  • Despite this opposition, the paramountcy policy remains in effect, and its impact continues to be felt throughout Indian society.

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