Encyclopedia of India–China Cultural Contacts v1.c5.s3.t1.4

v1.c5.s3.t1.4

The growth of the opium trade in the 18th century CE was directly linked with the interests of the British East India Company. After the battles of Plassey (1757) and Buxar (1764), the British East India Company gained control over large parts of eastern India. As part of its efforts to raise revenues, the Company organised the large-scale cultivation of opium in areas under its control. The Company was reluctant to carry contraband opium in its own ships to China, in order not to jeopardise its highly profitable trade with China. So, it auctioned the opium to private traders who smuggled it into China. The Company derived huge profits from the sale of opium in this manner. The sale of opium to China also served another purpose. In the course of the 18th century CE, the export of tea from China to Britain increased rapidly. The balance of trade became increasingly unfavourable to Britain as the market for British products in China did not expand much and consequently Chinese tea had to be paid for mainly with silver bullion. The problem became particularly acute for Britain after the passing of the Commutation Act in 1784 by the British Parliament, which, by drastically lowering the duty on tea, led to an exponential increase in tea imports. Initially, the British sought to make up for the trade deficit by exporting raw cotton from western India for which there was a market in China. This was the beginning of the so-called triangular trade between China, Britain and India. However, from the early decades of the 19th century CE and particularly after 1820, opium became the chief export to China from India.