Everything began with the East India Company, which was established by the British in 1600 to challenge the Dutch-Portuguese monopoly of the spice trade. Queen Elizabeth granted the company monopoly rights to bring goods from India. With the approval of local Indian rulers, the East India Company established trading posts in Madras, Bombay and Calcutta. The company was now trading in cottons, silks, indigo, saltpeter and tea, and had a monopoly of this trade until 1694 when the House of Commons passed an act that enabled all British firms to trade with India. The East India Company retained its dominant position and continued to make large profits from India and by 1720, 15% of Britain's imports came from India.

In the beginning of 17th century, Europeans, particularly British, started trading in the subcontinent. Merchants of the East India Company never imagined that British presence in the subcontinent could mean anything more than peaceful trading. The French arrived in the middle of the 17t

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