The company was founded to compete with the Dutch and Portuguese in the lucrative spice trade of the East Indies. Its first voyage, under James Lancaster, sailed in 1601. Over the next two and a half centuries the company shifted its focus to India, where it built trading posts, raised private armies and, after the Battle of Plassey in 1757, came to rule much of the subcontinent. After the rebellion of 1857 the British Crown took over its territories, and it was dissolved in 1874.
In 1599 a group of merchants in London had pledged money for a voyage to the East Indies after the Dutch returned with profitable cargoes of pepper. The queen's government at first hesitated, but on December 31, 1600, she granted a charter to "the Governor and Company of Merchants of London trading into the East Indies", with 218 members and Sir Thomas Smythe as its first governor. The charter gave it a monopoly for 15 years.
The company's first fleet of four ships returned from Sumatra and Java with pepper, and early voyages were financed separately, with profits distributed to investors afterward. The Dutch East India Company, founded in 1602 with far more capital, dominated the spice islands, so the English company turned increasingly to India, trading cotton, silk, indigo and later tea.
Its trading posts at Madras, Bombay and Calcutta grew into cities. By the 18th century it had its own armies, and after victories over Indian rulers it collected taxes and governed millions of people, a transformation that made some of its officers enormously rich and led to repeated scandals in Britain.
Key people: Elizabeth I, Thomas Smythe, James Lancaster