Establishment of the Company: Like the Portuguese and the Dutch the British too decided to trade with India. Britain had strengthened her navy after defeating Spain in 1588 A.D.. In 1600 A.D., traders of England sought the permission of Queen Elizabeth for trade with India and established the British East India Company. They wanted to establish trade relations with eastern islands. But eastern islands were under the control of the Dutch. The Dutch harassed the British traders and compelled them to withdraw from the East Indies.

Concessions from the Mughal Emperor: Now the British” East India Company increased its trade activities in India. In 1608 A.D., Capt. Hawkins obtained permission of the Mughal Emperor Jahangir to trade with India. In 1615 A.D., Sir Thomas Roe came to the Court of Jahangir as an ambassador of James I, the king of England. He sought permission of Jahangir to establish a factory at Surat and also obtained several other concessions. As such, Surat became a trade centre of the English.

Growth of power of the British East India Company: In 1651 A.D., the English established a factory at Masulipattam in South India. After this, they purchased some land and laid the foundation of the city of Madras (Chennai) and established -a factory there. In 1651 A.D., the British Emperor Charles’ II got Bombay (Mumbai) from the Portuguese as dowry and the British Company established a cotton, cloth factory there.

Permission for free trade: The British East India: Company established its first factory in 1633 in the East India, in Orissa. Soon they set up their “factories at Hugli, Patna, Balasor and Dacca. Surat continued to be the headquartes of the British Company till 1686 A.D. A mint was set up in Bombay (Mumbai). Coins made in this mint were in circulation in the Mughal Empire. In 1717 A.D., the British Company got the permission to trade freely (free from Octroi tax) in lieu of payment of Rs. three thousand per annum to the Mughal Emperor Farrukhsiyar.

In this way, trade of the British East India Company flourished a lot. With the expansion of trade, cities like Madras (Chennai), Bombay (Mumbai) and Calcutta (Kolkata) became very prosperous.