British East India Company


The British East India Company, founded in 1600, played a key role in British imperial expansion, primarily in India and the East Indies. However, its financial troubles led Parliament to pass the Tea Act (1773), which led to the Boston Tea Party, triggering a series of events that led to the American Revolutionary War.

Boston Tea Party, 1773, Lantern Slide, DCMNY

This dramatic illustration of the Boston Tea Party depicts the Sons of Liberty dressed as Native American Indians. Image Source: Digital Culture of Metropolitan New York.

British East India Company Facts

The following facts, dates, and details provide an overview of the British East India Company, as it relates to Colonial America, the development of British Colonial Policies, and the American Revolution.

Foundation of the British East India Company

  • The British East India Company was established in 1600.
  • It was a private company but often operated on behalf of the British Government.
  • It was originally called the Governor and Merchants of London Trading into the East Indies.
  • It started as a speculative financial venture, following the defeat of the Spanish Armada in 1588.
  • Formed by the Lord Mayor of London and several hundred leading citizens.
  • The company was founded to capitalize on commercial opportunities in the East Indies and competed with the Portuguese and then the Dutch.

Grant of Charter by Queen Elizabeth I

  • On December 31, 1600, Queen Elizabeth I granted the East India Company a 15-year charter.
  • The charter provided the company with a monopoly on English trade in the East Indies.
  • Subscribing merchants were granted exclusive rights to trade in the region.
Queen Elizabeth I, Portrait, Gower
Queen Elizabeth I. Image Source: Wikimedia.

Leadership and Early Ventures

  • Sir Thomas Smythe was the first governor of the company.
  • Smythe’s experience included roles in the Muscovy Company and the Levant Company.
  • The East India Company’s first fleet set sail in February 1601.
  • The fleet returned with a cargo of pepper from Amboina (modern-day Ambon, Indonesia).
  • Expeditions in 1604 and 1607 expanded the company’s presence and trade networks in the East Indies.

Dutch East Indies

  • The East India Company encountered resistance from the Portuguese and Dutch in the Dutch East Indies (modern-day Indonesia).
  • The company used its diplomatic and military power to break into new markets.
  • In December 1612, two English ships defeated a large Portuguese fleet consisting of four galleons and 26 frigates (Battle of Swally, or Battle of Suvali).
  • This victory allowed the East India Company to establish a factory (trading post) at Saurat and improve its trade with the Mughal Empire.
  • From Saurat, the company extended its commercial ties by importing cotton, silk, indigo, saltpeter, and spices from the East.

Richard Hakluyt the Younger

  • The East India Company’s leaders focused on exploring commercial opportunities, especially during Queen Elizabeth I’s reign and the early Stuart Era.
  • In 1601, the East India Company hired Richard Hakluyt the Younger, a prominent supporter of English Colonialism.
  • Hakluyt had been involved with the early attempts to establish a colony on Roanoke Island (the Lost Colony).
  • In 1614, Hakluyt provided English travelers to the Spice Islands with a vocabulary guide for interactions with locals (Dialogues in the English and Maliane Languages).

Influence on the Growth of the British Empire

British East Indian Company and the Boston Tea Party

Background of the Boston Tea Party

  • On June 29, 1767, Parliament enacted the Indemnity Act, which lowered the taxes the British East India Company had to pay on shipments of tea. This was done to allow the company to lower the cost of the tea it sold in the American Colonies. The Indemnity Act was one of the five Townshend Acts passed by Parliament.
  • The Boston Tea Party (December 16, 1773), was a significant moment that took place during the American Revolution and served as the catalyst for a series of events that led to the outbreak of the American Revolutionary War (1775–1783) and the eventual creation of the United States.
  • The Tea Act, passed by Parliament on May 10, 1773, was the immediate cause of the Boston Tea Party.

East India Company and the Tea Act

  • The East India Company, which controlled British affairs in India, was facing financial issues and was on the brink of bankruptcy.
  • To assist the company, the British government granted it a monopoly on all tea exported to the American Colonies.
  • The East India Company was allowed to choose a limited group of colonial merchants to sell tea in North America, which was intended to stabilize the company’s financial situation.

British Perspectives on the Tea Act

From the British viewpoint, the Tea Act served multiple purposes:

  • The Tea Act addressed the rampant smuggling of tea into the colonies, primarily by the Dutch.
  • Previously, tea imported from the East India Company had to pass through England, where duties were imposed, before reaching the colonies, resulting in higher prices.
  • The Tea Act allowed the direct export of tea to the colonies from the East India Company without customs charges in England, making the tea cheaper for colonial consumers.
  • The British government anticipated the reduced price of tea would encourage colonists to purchase legally imported tea — and implicitly acknowledge parliamentary authority by paying the last tax that remained from the Townshend Acts.

Despite these perceived benefits, the implementation of the Tea Act did not take place as British officials anticipated.

Colonial Response to the Tea Act

  • Colonists rejected the Tea Act, viewing it as another attempt by Parliament to assert control over their affairs without representation in Parliament (No Taxation Without Representation).
  • Patriot leaders argued that any grant of monopoly, even if it lowered prices, would undermine Americans and continue to reduce their freedom and liberties.
  • The Tea Act angered colonial merchants who stood to lose money to the merchants who were selected to distribute the East India Company tea.

East India Company Tea and the Tea Ships

  • In September 1773, the East India Company planned to ship 500,000 pounds of tea to merchants in Boston, New York, Philadelphia, and Charleston.
  • However, by this time, opposition to the Tea Act had intensified, leading colonial merchants to agree not to sell the tea.
  • In New York, Philadelphia, and Charleston, tea agents either canceled their orders or resigned from their positions, typically under pressure from the Sons of Liberty.
  • As a result, shipments of tea to these cities were either returned to England or stored in warehouses.

Tea in Boston

  • Boston faced a unique situation because most of the tea agents were friends or relatives of Governor Thomas Hutchinson.
  • Hutchinson believed in upholding the supremacy of the law and insisted on enforcing the Tea Act in Boston.
  • In Boston, opposition to the Tea Act was strong and was led by Patriot Leaders such as Samuel Adams, Josiah Quincy, and John Hancock, who organized resistance through groups like the Committee of Correspondence and the Sons of Liberty.
Samuel Adams, Painting, Copley
Samuel Adams was a Patriot leader in Boston. Image Source: MFA Boston.

Escalation of Tensions in Boston

  • Upon the arrival of the first East India Company ship in Boston in November 1773, the Sons of Liberty prevented the unloading of tea.
  • Despite convincing the ship captains to leave without unloading the tea, Governor Hutchinson refused to grant clearance for their departure.
  • The law stipulated that tea had to be unloaded within 20 days or risk seizure and sale to pay customs duties, which the Sons of Liberty were adamantly against.
  • Governor Hutchinson’s refusal to allow the tea ships to return to England escalated tensions.

The Boston Tea Party

  • On the night of December 16, 1773, about 60 men, disguised as Mohawk Indians and encouraged by thousands of townspeople, boarded three ships in Boston Harbor.
  • They broke open the tea chests and threw over £10,000 worth of tea into Boston Harbor.
  • Originally known simply as “The Destruction of the Tea,” the Boston Tea Party was a direct response to the Tea Act but dramatically increased tension between the colonies and Great Britain.
Boston Tea Party, Engraving
Destruction of the Tea by Paul Philippoteaux and Henri Théophile Hildibrand. Image Source: New York Public Library Digital Collections.

Colonial Resistance Spreads

  • In New York and Annapolis, mobs prevented the landing of East India Company tea.
  • Colonists along the coast continued to boycott East India Company tea.

Intolerable Acts

Citation Information

The following information is provided for citations, including APA Style, Chicago Style, and MLA Style.

  • Article Title British East India Company
  • Date 1600–1773
  • Author
  • Keywords British East India Company, Tea Act, Boston Tea Party
  • Website Name American History Central
  • Access Date May 30, 2024
  • Publisher R.Squared Communications, LLC
  • Original Published Date
  • Date of Last Update April 16, 2024