Talks between the East India companies of Britain and France in 1754 promised to end a war between them in India and to transform the Franco-British relationship there. Responding to hints from London, the French proposed that the two companies ally to resist political pressure from Indian powers, that they neutralize the whole zone east of the Cape of Good Hope in case of future Franco-British wars, and abandon their efforts to acquire territory, subjects, and tax revenues. The largest enterprises of their age, the companies governed fortified settlements under concessions from the Mughal emperor. But they ruled little of the surrounding territory. Imperial domination still lay in the future.

Joseph Dupleix, French governor of Pondicherry

As the authority of the Mughal Empire waned from the 1730s, power struggles ignited to control breakaway provinces. Companies stood to gain by backing new strongmen and to lose if they endorsed the wrong contender. As they took sides, they were sucked into conflict with one another, and their military costs soared. The French governor of Pondicherry, Joseph Dupleix, warned his superiors that the company could not meet its expenses from the profits of trade. It would need tax revenues, and this meant acquiring subjects. He offered troops to Indian allies in return for territory – threatening disaster for the British company, which stood to be excluded from a French empire in India.

War between the companies damaged trade and threatened their solvency in Europe. Stock values fell, and shareholders mutinied, pushing the companies to reach an understanding. The two governments also wanted a deal, fearing hostilities in India would trigger a European war.

Company directors were dubious about the prospects of empire in India. They worried that the cost to administer and defend such dominions would outrun any benefit. In 1752, the royal commissioner of the French company told Dupleix that ‘peace is generally preferred to conquests’. ‘We do not wish to become a political power in India . . . we want only a few establishments to aid and protect trade.’ So, he instructed the governor, ‘No more victories! No more conquests! Lots of merchandise, and some increase of the dividend!’ Across the Channel, Alexander Hume, the influential shareholder and former director who oversaw negotiations with the French, considered territory of little value. ‘We desire no Conquests upon the French in India’, he insisted.

French East India Company Flag.

Neither the French or British East India companies wanted political domination but, more urgently, neither wanted its rival to achieve such a position. Impelled by these fears, talks began in June 1753 and wore on for nearly two years. A settlement proved elusive. Neither side trusted the other, and both wanted to maintain advantages they had already won. But when the French directors removed Dupleix, a new governor at Pondicherry broke the deadlock, signing a provisional treaty with his British counterpart at Madras.

Yet the accord was never ratified in Europe. Frontier clashes between French and British colonial forces in America – the first rumblings of the Seven Years’ War (1756–63) – overtook the negotiations.

Had the companies achieved a lasting settlement, the subsequent history of India might have taken a different course. During the Seven Years’ War, the East India Company routed the French and, after repulsing an attack on Calcutta by the Nawab of Bengal, won control over the province. The ambition and rapacity of company employees on the ground and the logic of power politics led to further wars and, over decades, the company expanded its empire. But this future was hardly inevitable in the early 1750s.

East India Company Flag

Historical ‘what ifs’ are notoriously slippery, yet they can be revealing. The future that seems possible from the perspective of 1754 was an earlier evolution of the collaborative style of Franco-British imperialism manifest at points after 1815 – when, for example, the powers joined to force open Chinese markets. Had the companies reached a deal, rather than establishing empire in India they might have agreed on commercial spheres of influence, leaving sovereignty in Indian hands. Lest this seem far-fetched, we should remember that formal imperial control was a risky and often unprofitable business. The East India Company was saved from bankruptcy by a government bailout in 1773 and needed to be rescued again in 1783. The costs to govern and defend its Indian empire threatened to devour the profits of its trade – just as the directors feared. As government minister Henry Dundas put it in 1793, ‘They prospered while they were merchants, and they have never prospered since’. A different outcome was imaginable in 1754 that would have better served the company, Great Britain, and the peoples of India.

John Shovlin is the author of Trading with the Enemy: Britain, France and the 18th century Quest for a Peaceful World Order.

Issue Four of Aspects of History is out now. French and British East India companies.