Background of Bengal: Rise of Autonomy Under Murshid Quli Khan

Bengal’s Shift Away from Mughal Control

After 1717, Bengal started functioning more independently of the Mughal Empire. This shift began when Murshid Quli Khan became the governor (Subahdar) of Bengal. Unlike earlier times, he was allowed to hold both the posts of nazim (governor) and diwan (revenue officer). This was unusual and broke the traditional Mughal system of dividing power between two officers to prevent misuse or over-centralization.

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Administrative Power and Revenue Control

With control over both administration and revenue, Murshid Quli Khan was able to centralize authority. While he did not officially break ties with the Mughal Empire, he started running Bengal as an almost independent province. He continued to send regular revenue to the Mughal court, which was financially struggling at the time. In fact, Bengal’s revenue was often the only reliable income for the empire.

Murshid Quli Khan’s Revenue Reforms

Murshid Quli Khan’s strength came from his strong revenue system. He brought major reforms that ensured Bengal remained a surplus-paying region even when the rest of the empire was facing instability.

• Between 1700 and 1722, Bengal’s total revenue collection increased by 20%.
• He conducted detailed land surveys and forced zamindars (landowners) to pay revenue fully and on time.
• He promoted a few large and efficient zamindaris and removed inefficient or disobedient zamindars. Their lands were taken over as khalisa (royal land).

By the time he died in 1727, the 15 biggest zamindars in Bengal were contributing half of the province’s total revenue.

Rise of New Power Groups: Zamindars and Bankers

Alongside zamindars, a new group of rich merchants and bankers also became powerful. These urban elites became important players in Bengal’s politics and economy. Their increasing wealth gave them more influence, and they began playing key roles in trade and state finance

Trade and Political Economy of Bengal (17th–18th Century)

Commercial Prosperity During Murshid Quli Khan’s Rule

Bengal was known for its lucrative trade, even before the rise of British power. During the rule of Murshid Quli Khan, Bengal’s economic position grew stronger due to political stability and increased agricultural output. This created a solid foundation for internal and overseas trade.

• Major Exports: Bengal exported silk, cotton textiles, sugar, oil, and clarified butter.
• Trade Routes:
  • Overland: Goods were sent through northern and western Indian trade centers to Persia and Afghanistan.
  • Maritime: Through Hughli port, goods reached Southeast Asia, the Persian Gulf, and the Red Sea.

Shift to Maritime Trade in the 18th Century

As political instability grew across north India in the early 18th century, overland trade declined partially, but oceanic trade flourished. European companies—Dutch, French, and English—began to increase their investment in Bengal.

• By the first half of the 18th century, Europe became the main destination for Bengal’s goods.
• This led to significant expansion in the textile industry, especially for European markets.

Bullion Inflow and Economic Integration

Bengal had a favourable balance of trade. European companies brought in large amounts of silver (bullion) to buy Bengal’s products.

• This silver was easily absorbed into Bengal’s cash economy and used for revenue payments to Delhi.
• Bengal’s economy became more liquid and monetised, supporting both trade and administration.

Role of Merchants, Bankers, and Zamindars

Merchant Community and Trade Dominance

Trade in Bengal was led by Hindu, Muslim, and Armenian merchants. Many of them were wealthy and influential.

• Notable Merchants:
  • Umi Chand – a Hindu merchant with large influence.
  • Khoja Wajid – an Armenian merchant who owned a fleet of ships.
• They had cordial ties with the administration, and the state did not interfere harshly with merchant affairs.

Bankers and State Revenue

As zamindars were under pressure to pay revenue regularly, bankers and financiers became crucial to Bengal’s economy.

• They provided credit, security, and loans at every step of the revenue process.
• In return, they got patronage from the nawabs, which increased their influence in the administration.

Rise of Jagat Seth Banking Family

• The Jagat Seths emerged as the most powerful banking house in Bengal.
• In 1730, they became the treasurers of Bengal and gained control over the mint.
• Their political support later played a major role in the transfer of power from Sarfaraz Khan to Alivardi Khan.

Jagat Seth: India's richest banker with assets worth $1 trillion

New Power Structure in Bengal

By the mid-18th century, Bengal’s governance became cooperative in nature, dominated by three key groups:

Together, these groups held real power. The nazim (provincial governor) now had to depend on their support. This limited the autonomy of the nawab himself and created a fragile balance of power.

The 1739–40 Coup and Rise of Alivardi Khan

In 1739–40, a significant shift occurred when Sarfaraz Khan, who had inherited the position of nazim from his father Shuja-ud-Din, was overthrown.

Alivardi khan

• Why the Coup Happened:
  • Sarfaraz was seen as inefficient.
  • He antagonised the Jagat Seths and lost support of key zamindars and officers.
• With support from the Jagat Seth family and military commanders, Alivardi Khan staged a coup and became the new Nawab of Bengal.
• He later received formal approval from the Mughal emperor, though Bengal was now functioning independently.

Alivardi Khan’s Rule and De Facto Independence

Alivardi Khan's rule (1740–1756) marked a clear break from Mughal control:

• All major appointments were now made without referring to the Mughal emperor.
• Revenue payments to Delhi stopped.
• Although no formal declaration of independence was made, Bengal, along with Bihar and Orissa, was now fully autonomous in practice.

Alivardi Khan’s Relations with European Companies

Alivardi maintained a careful and calculated policy toward European trading companies:

• During the Maratha invasions, he allowed them to build fortifications, such as the Maratha Ditch around Calcutta in 1742 (a 3-mile long moat dug by the British for defense).
• However, he also collected large sums of money from these companies to finance his wars.
• He remained aware of European rivalries in the south (especially British–French conflicts), and tried to prevent such conflict from entering Bengal.

Succession Crisis and Decline of Stability

In 1756, Alivardi Khan died and named his 23-year-old grandson, Siraj-ud-Daulah, as his successor.

• His succession was challenged by:
  • Shaukat Jung, Faujdar of Purnea
  • Ghaseti Begum, Alivardi’s daughter
• This led to factionalism within the court. The powerful zamindars and merchant groups felt threatened by Siraj’s strong-willed and ambitious nature.

British Intervention: The Conspiracy and the Battle of Plassey 1757

As internal tension increased:

• The English East India Company found an opportunity to interfere in Bengal’s politics.
• The Plassey Conspiracy of 1757 involved several discontented nobles and financiers—including Mir Jafar, Jagat Seths, and others—joining hands with the British to remove Siraj-ud-Daulah.
• This led to the Battle of Plassey, where Siraj was defeated and killed, ending the autonomous Nawabi rule in Bengal.

The Conflict Between the English and the Nawabs of Bengal: Siraj and the English

By the early 18th century, the British East India Company had established a strong presence in India through its three main presidencies: Fort St. George in Madras, Fort William in Calcutta, and Bombay Castle in western India. These were independent administrative units governed by a President and a Council appointed by the Court of Directors in London. To expand influence, the British adopted a strategy of forging alliances with Indian rulers, offering them military protection in return for trade privileges and internal concessions. Many Nawabs, faced with threats from rebels or rival claimants, agreed to such arrangements.

By this period, the Company had overcome its commercial competition with the Dutch and Portuguese. The only serious European rival remaining in India was the French East India Company, which had two significant centres of power: Chandernagar in Bengal and Pondicherry on the Carnatic coast. Both were governed under the presidency of Pondicherry.

Bengal's Rising Commercial Importance

The conflict between the Nawabs of Bengal and the British developed primarily because of Bengal’s growing centrality to the Company’s trade. As the 18th century progressed, Bengal began replacing western Indian centres like Bombay, Surat, and Malabar in importance. By this time, goods from Bengal—especially textiles—accounted for nearly 60% of all British imports