How Did the Assumption of Diwani Benefit the East India Company?

By Shivank Goel|Updated : September 5th, 2022

The assumption of Diwani benefitted the East India Company in meeting their trade expenses with the revenues that they collected in India. In 1765, the East India Company was made the Diwan of Bengal, sanctioned by the then Mughal emperor. The title was accepted by Robert Clive on behalf of the Company. Appointed as the Diwan, the East India Company had the assumption of Diwani in hand. As per the Diwani system, they got the right to collect revenue and handle the administration of the Bengal region.

The assumption of Diwani benefited the East India Company by cutting down on the gold and silver that was being imported from Britain to purchase goods in India. Now, with the Diwani revenue, the Company could purchase Indian goods using Indian revenue itself. It helped the Company to purchase textiles like silk and cotton in India and maintain its offices, forts, buildings, and company troops using the Diwani revenue.

Assumption of Diwani and the East India Company

In the early 18th century, the British government started increasing its trade with India. Since the East India Company did not have any goods to sell in trade, they had to purchase Indian goods in exchange for gold and silver that came from Britain. Here's how that changed after the assumption of Diwani:

  • Being appointed the Diwan of Bengal in 1765, the East India Company got the Diwani rights.
  • According to this right, the Britishers could collect revenue and handle the administration of Bengal.
  • They no longer had to use their own gold and silver to make trade in India. They could use the Diwani revenue to conduct trade.

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FAQs

  • Through the Diwani system, the East India Company got the right to collect revenue and handle the administration of the Bengal region. This helped them cut down on the expenses from Britain for trade and replace it with revenue collected from India itself.

  • Diwani refers to the right to collect revenue from a region and to handle its administration as well. The assumption of Diwani helped the East India Company to purchase silk textiles and cotton in India and maintain its offices, forts, buildings, and company troops.

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