Charter Act 1813: Features, Importance, Clause 43 of Charter Act 1813

By Aarna Tiwari|Updated : October 7th, 2022

The Charter Act 1813, or the East India Company Act 1813, was passed by the British Parliament, which renewed the East India Company’s Charter for another 20 years. The Charter Act of 1813 defined for the first time the constitutional position of British Indian territories. Napoleon Bonaparte’s Continental System in Europe prohibited the import of British goods into Europe and its allies. The British traders and merchants suffered immensely due to this. They demanded a fair share in the British trade in Asia and dissolve the monopoly of the East India Company. The Company objected to this, stating that its political authority and commercial privileges cannot be separated.

Under the Charter Act 1813, British merchants could trade in India under a strict licensing system. The Company maintained its monopoly in trade with China and the tea trade. Get the complete details including the features and importance of this act below. Charter Act 1813 UPSC notes will allow you to prepare the topic in a comprehensive manner for the upcoming IAS Exam.

Table of Content

What is Charter Act 1813?

Go through the highlights of Charter Act 1813 for easy and quick revision.

Charter Act 1813 Overview

Introduced by

The British Parliament

Purpose of Charter Act 1813

To end the East India Company’s monopoly over trade in India. Though, the company's monopoly in trade with China and trade in tea with India was kept intact. 

Also Known as

East India Company Act, 1813

Governor-General

Lord Hastings

Territories Affected

Territories under British possession in India

Status

The Charter Act 1813 was repealed by the Government of India Act, 1915.

Features of Charter Act 1813

The Charter Act of 1813 explicitly defined the constitutional position of the British territories in India and asserted the Crown’s sovereignty. The features of the Charter Act 1813 are:

Charter Act 1813 UPSC

  • It ended the East India Company’s monopoly in India. But the East India Company retained its monopoly on the trade in tea, opium, and with China.
  • The company’s rule was extended to another 20 years.
  • The Charter Act 1813 asserted the Crown’s sovereignty over British possessions in India.
  • The Act granted permission to Christian Missionaries who wished to come to India to promote moral improvements and religious proselytization.
  • The Act also empowered the local governments to tax people, subject to the jurisdiction of the Supreme Court. It gave more powers to the courts in India over European British subjects.
  • Those who did not pay taxes were punished under the Charter Act of 1813.
  • It regulated the company’s territorial revenues and commercial profits. The company’s dividend was fixed at 10.5%.
  • The provision was to keep the territorial and commercial accounts separate.
  • Clause 43 of the Charter Act 1813 stated that the Company should invest ₹1 Lakh every year in the education of Indians. The act provided for a financial grant for the revival of Indian literature and the promotion of science.

Significance of Charter Act 1813

The importance of the Charter Act 1813 must be understood in a detailed manner. The significance of the Charter Act 1813 is as follows:

  • It asserted the Crown’s sovereignty over British possessions in India. 
  • It ended the East India Company’s monopoly in India.
  • The Act also empowered the local governments to tax people, subject to the jurisdiction of the Supreme Court.

Charter Act 1813 UPSC

The Charter Act 1813 is an important topic in Modern Indian History. Over the years, several questions have been asked about this topic in both UPSC Prelims and UPSC Mains GS Paper- 1. To cover this topic, a candidate needs to be well versed with the Indian History Notes for UPSC and readings of the NCERT Books for UPSC.

The importance of the Charter Act 1813 must be understood in a detailed manner, along with the comparison between several other charter acts.

Also Check:

Charter Act 1813 UPSC Question

One of the sample UPSC Prelims Questions on Charter Act 1813 can be,

Which of the following is one of the reasons for considering the Charter Act 1813 important for India?

  1. It banned propaganda by Christian missionaries in India.
  2. It emphasized industrialization in India.
  3. It made the Financial allocation for the education of the Indian people.
  4. It approved the development of the railway system in India.

It is good to practice UPSC Previous Year Question Papers and try writing answers for any Mains questions asked related to the topic.

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FAQs on Charter Act 1813

  • The Charter Act 1813 or the East India Company Act, of 1813 was passed by the British Parliament, which renewed the East India Company’s Charter for another 20 years. The Charter Act of 1813 defined the constitutional position of British Indian territories for the first time. Go through the Charter Act 1813 UPSC Notes to get a more comprehensive understanding of the topic.

  • Lord Hastings was the Governor-General of India when the British Parliament passed the Charter Act of 1813.

  • Napoleon Bonaparte’s Continental System in Europe prohibited the import of British goods into Europe and its allies, which caused immense losses to British traders and merchants. The British traders and merchants looked for a fair share of British trade in Asia and demanded the dissolution of the monopoly of the East India Company. The aim of the Charter Act 1813 was to end the monopoly of the trade of EIC. The British parliament, through this act, abolished the East India Company completely and took the responsibility of ruling India directly under the British Crown.

  • The Charter Act 1813, ended the East India Company monopoly in India, except for trade and tea, with China. As a result of this, the craftsmen of India had to compete with the machine-made goods of England. This led to the loss of the market for handmade handicrafts and ultimately led to the decline of the Indian handloom and handicraft industry. Moreover, in the 18th Century, when England was going through Industrialisation, India faced deindustrialization.

  • The Charter Act of 1853 abolished East India Company's monopoly of trade entirely in India. The British parliament, through the Charter Act 1853 abolished the East India Company completely and took the responsibility of ruling India directly under the British Crown.

  • Under clause 43 of the Charter Act of 1813, one lakh rupees from the royal treasury was allotted for the education of Indians. The clause compelled the East India Company to accept responsibility for the education of the Indians. The act provided a financial grant for the revival of Indian literature and the promotion of science.

  • Charter Act 1813 UPSC Notes PDF can be easily downloaded and assessed from here. UPSC aspirants must read this article thoroughly and revise through the PDF above to get a good hold of this concept from the exam point of view.

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