Question map
Consider the following statements about 'the Charter Act of 1813' : 1. It ended the trade monopoly of the East India Company in India except for trade in tea and trade with China. 2. It asserted the sovereignty of the British Crown over the Indian territories held by the Company. 3. The revenues of India were now controlled by the British Parliament. Which of the statements given above are correct?
Explanation
The correct answer is option A (statements 1 and 2 only).
Statement 1 is correct: The Charter Act of 1813 ended the Company's monopoly over trade in India, but the Company retained the trade with China and the trade in tea.[3] This Act threw open trade with India to all British subjects, ending the monopoly except for these specific areas.[4]
Statement 2 is correct: The Company was to retain possession of territories and revenue for 20 years more, without prejudice to the sovereignty of the Crown.[3] Thus, the constitutional position of the British territories in India was defined explicitly for the first time.[1]
Statement 3 is incorrect: While the regulations made by the Councils of Madras, Bombay and Calcutta were required to be laid before the British Parliament[1], this does not mean Parliament directly controlled Indian revenues. The Company's shareholders were given a 10.5 per cent dividend on the revenue of India[1], indicating the Company still managed revenues, though under Crown sovereignty and Board of Control supervision.
Sources- [1] Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > The Charter Act of 1813 > p. 505
- [2] Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > The Charter Act of 1813 > p. 505
- [3] Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > The Charter Act of 1813 > p. 505
- [4] Modern India ,Bipin Chandra, History class XII (NCERT 1982 ed.)[Old NCERT] > Chapter 5: The Structure of the Government and the Economic Policies of the British Empire in India, 1757—1857 > The Structure of Government > p. 91
PROVENANCE & STUDY PATTERN
Full viewThis is a foundational 'Sitter' question derived directly from the first chapter of Laxmikanth and Spectrum. If you miss this, you are losing marks that 90% of serious candidates are securing. The strategy is rote memorization of the 'Features' list for every Regulating and Charter Act (1773–1947).
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: Did the Charter Act of 1813 end the East India Company's trade monopoly in India except for trade in tea and the China trade?
- Statement 2: Did the Charter Act of 1813 assert the sovereignty of the British Crown over territories in India held by the East India Company?
- Statement 3: Did the Charter Act of 1813 place the revenues of India under the control of the British Parliament?
- Explicitly says the Company's monopoly over trade in India ended while the Company retained trade with China and the trade in tea.
- Directly matches the claim's structure: end of Indian monopoly + retention of China/tea trade.
- States that by the Charter Act of 1813 the Company's trade monopoly in India was ended.
- Clarifies that Indian trade was thrown open to all British subjects, supporting the 'ended monopoly in India' part.
- Notes that the Company's monopoly of tea trade and trade with China was ended only by the Charter Act of 1833, implying these remained with the Company after 1813.
- Provides chronological contrast that supports the exception for tea and China in 1813.
- Contains the explicit phrase 'without prejudice to the sovereignty of the Crown' in relation to Company retention of territories and revenue.
- Says the constitutional position of British territories in India was defined explicitly for the first time by this Act.
- Directly asserts that the Charter Act of 1813 'asserted the sovereignty of the British Crown over the Company's territories in India.'
- Places this assertion among the Act's main features, linking it to administrative changes (e.g., making the Governor-General of Bengal the Governor-General of India).
- Explicitly empowered the Board of Control to supervise and direct all operations of the civil and military government or revenues of the British possessions in India.
- States that the British Government was given supreme control over the Company's affairs and its administration in India, linking revenue oversight to central British authority.
- Requires regulations made by the Councils of Madras, Bombay and Calcutta to be laid before the British Parliament, creating a channel of parliamentary oversight.
- Specifies Company retained possession of territories and revenue for 20 years but under the Crown's sovereignty, implying a shift toward metropolitan control and oversight.
- [THE VERDICT]: Sitter. Direct lift from M. Laxmikanth (Chapter 1: Historical Background) and Spectrum (Chapter 26).
- [THE CONCEPTUAL TRIGGER]: Evolution of the British Constitution in India (Company Rule vs. Crown Rule). specifically the transition from Commercial Monopoly to Administrative Trusteeship.
- [THE HORIZONTAL EXPANSION]: Memorize the unique 'signatures' of 1813 vs 1833: 1. 1813: £1 Lakh for education, Christian Missionaries allowed, Local Govts empowered to tax. 2. 1833: GG of Bengal → GG of India, Law Commission (Macaulay), Company becomes purely administrative. 3. 1853: Open competition for Civil Services, Local representation in Legislative Council.
- [THE STRATEGIC METACOGNITION]: The trap is in Statement 3. Distinguish between 'Sovereignty' (legal claim, asserted 1813) and 'Direct Revenue Control' (administrative reality, happened 1858). The Company retained possession of revenues in 1813 for another 20 years; Parliament only had supervisory power via the Board of Control (established 1784).
1813 removed the Company's monopoly over Indian trade while leaving its China and tea privileges intact.
High-yield for questions on legislative changes to Company trade rights; connects to later reforms and helps answer compare-and-contrast questions about successive Charter Acts. Mastering this clarifies timelines of commercial vs administrative powers and frames economy-related polity questions.
- Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > The Charter Act of 1813 > p. 505
- Modern India ,Bipin Chandra, History class XII (NCERT 1982 ed.)[Old NCERT] > Chapter 5: The Structure of the Government and the Economic Policies of the British Empire in India, 1757—1857 > The Structure of Government > p. 91
The final removal of the Company's monopoly over tea and China trade occurred in 1833, not 1813.
Important for distinguishing outcomes of different Charter Acts; useful in timeline/causal questions and for linking commercial monopoly changes to broader administrative control by the British state.
- Modern India ,Bipin Chandra, History class XII (NCERT 1982 ed.)[Old NCERT] > Chapter 5: The Structure of the Government and the Economic Policies of the British Empire in India, 1757—1857 > The Structure of Government > p. 92
- Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > The Charter Act of 1813 > p. 505
British industrial and trading interests pushed to abolish Company monopolies, and 1813 led to one-way free trade benefiting British manufactures.
Helps answer economic impact questions (trade patterns, deindustrialisation) and connects political economy with social consequences in India; useful for essays and source-based questions on colonial economic policy.
- Modern India ,Bipin Chandra, History class XII (NCERT 1982 ed.)[Old NCERT] > Chapter 5: The Structure of the Government and the Economic Policies of the British Empire in India, 1757—1857 > British Economic Policies in India, 1757-1857 > p. 96
- Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 28: Economic Impact of British Rule in India > One-Way Free Trade > p. 541
The 1813 Act explicitly preserved 'the sovereignty of the Crown' over territories the Company retained.
High-yield for constitutional history: it explains the formal recognition of Crown supremacy while the Company kept administrative control, clarifying early 19th-century balance between Company and Crown. Useful for questions on Charter Acts, constitutional position of British India, and evolution of British rule.
- Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > The Charter Act of 1813 > p. 505
- Indian Polity, M. Laxmikanth(7th ed.) > Chapter 1: Historical Background > The features of this Act were as follows: > p. 3
The Act of 1858 formally transferred territories, revenues and powers from the Company to the British Crown.
Essential for mapping the timeline from Company rule to Crown rule; links to rebellion of 1857 and administrative reorganisation. Helps answer comparative and chronological questions about shifts in sovereignty and governance.
- Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 1: THE HISTORICAL BACKGROUND > Utility of a Historical Retrospect. > p. 2
- Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 1: Historical Background > Government of India Act of 1858 > p. 4
Pitt's India Act made the Company subordinate to government control and described Company territories as 'British possessions.'
Important for understanding the constitutional trajectory before 1813 — shows gradual increase of Crown/Parliament oversight. Useful for questions on evolution of oversight mechanisms (Board of Control) and legal status of territories.
- Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 26: Constitutional, Administrative and Judicial Developments > Pitt's India Act of 1784 > p. 503
The Board of Control was empowered to supervise and direct operations including revenues, placing fiscal oversight under British government authority.
High-yield for constitutional/administrative history questions: explains how metropolitan institutions gained practical control over colonial finances; links to later acts (e.g., 1833, 1858) that further centralized authority. Useful for questions on mechanisms of imperial control and continuity from Pitt's India Act to subsequent Charters.
- Indian Polity, M. Laxmikanth(7th ed.) > Chapter 1: Historical Background > The features of this Act were as follows: > p. 2
- Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 1: Historical Background > The features of this Act were as follows: > p. 2
The 'Local Taxation' Clause (1813). A hidden fact in Laxmikanth is that the Charter Act of 1813 empowered Local Governments in India to impose taxes on persons and punish them for non-payment. This is a likely future statement.
Apply 'Corporate vs. State' Logic. In 1813, the EIC was still a corporation. A Parliament does not directly 'control' the revenues of a corporation; it regulates them. Direct control of revenues implies the money flows to the British Exchequer, which only happened after the Nationalization of the Company in 1858. Thus, Statement 3 is anachronistic.
Link 1813 to Mains GS1 (History/Society): The end of monopoly (Statement 1) marks the beginning of 'One-Way Free Trade' and Deindustrialization of Indian handicrafts. The £1 Lakh grant marks the beginning of the Anglicist-Orientalist controversy in education.