British East India Company

Choose the Correct Answer

Correct Answer : Option a

Explanation
Statement-I is correct. Indian rulers encouraged the East India Company’s trade activities during the 17th and 18th centuries because it brought significant economic benefits to their regions. The Company imported precious metals and goods into India, exchanged them for Indian textiles, spices, and other goods, and increased exports of Indian products. This boosted local production and trade, benefiting the economy. Consequently, Indian rulers allowed the establishment of the Company’s factories and trading posts, viewing it as a source of prosperity.

Statement-II is correct. The primary aim of the East India Company from 1600 to 1757 was to act as a trading corporation. The Company sought to maximize its profits by exporting Indian goods like textiles and spices to Britain and other European markets. These efforts to open new markets increased the demand for Indian goods, which further stimulated local production.
The Indian rulers tolerated and encouraged the Company’s trade because it benefited their regions by promoting exports of Indian goods and stimulating local industries. The Company’s efforts to open new markets for Indian goods abroad (Statement-II) directly contributed to this economic activity, which is why Indian rulers allowed the establishment of trading posts (Statement-I). Thus, Statement-II provides the reason for the Indian rulers' encouragement of the Company’s trade.