In the late 1500s AD trade goods from the Asia such as silks, spices, chintzes (patterned cloth) and porcelain were increasingly sought-after in Europe. The British East India Company was established to make the most of these developing markets and was given its charter by Elizabeth I in 1600. The East India Company was responsible for the establishment of British colonial rule in India and for much of the 1700s and 1800s it controlled a vast proportion of global trade, including that in opium which was essential to the funding of the British Empire.

After the death of the Mogul Emperor Aurangzeb in 1707 the East India Company began to change from a purely mercantile organisation to a significant political force. The Company lost a battle with the ruler (Nawab) of Bengal, and Robert Clive, who had originally come to India with the East India Company, was given the task of retaking Calcutta which he did at the battle of Plassey (1757). British rule in India (the Raj) begun in 1764 when Clive was given the right to collect revenues in Bengal. In 1858 authority in India was transferred from the Company to the British Crown. This was because of considerable misrule and the Indian Rebellion in 1857. The Company was finally wound up in 1874.