In the early eighteenth century, the province of Bengal was known as the Paradise of Nations, a wealthy and prosperous region that accounted for forty percent of all Dutch exports from Asia. This land was a major exporter of silk and cotton textiles, steel, saltpeter, and agricultural produce, making it the economic heart of the Mughal Empire. The British East India Company had been trading in the East Indies since the early seventeenth century, but following the Amboyna massacre in 1623, they were compelled to abandon their efforts in South-east Asia and shift their focus almost entirely to the Indian Subcontinent and Bengal specifically. They first acquired a lease on the banks of the river Hughli in 1658 and later established their chief fort in the region, Fort William, in 1696. Throughout this period, their relationship with Mughal authorities was one of imbalance, as they mostly acted as junior partners to Mughal authority and rarely butt heads with them. The only exception to that was when they tried using military force, which ended terribly for the company, with them being forced to swear fealty to the Mughals just to get their factories back. In Bengal up till this point, the provincial government was separated into two major cabinets, the Nizamat, presided over by a Subahdar who oversaw general administration, justice, and defense, and the Diwani, presided over by a Chief Diwan who oversaw revenue administration. Both positions were to ultimately answer to the Emperor. In 1704, over a bitter rivalry between the incumbent Subahdar, Royal prince Azim-ush-Shan, and his Chief Diwan Murshid Quli Khan, the former was shifted elsewhere by Aurangzeb, leaving Murshid Quli Khan as sole de-facto governor of all of Bengal Subah. Aurangzeb would die three years later, meaning that, aside from the striking of coins in the Mughal Emperor's name and nominal tribute to the court, Bengal became independent under Murshid in all but name, as became the norm in many other Subahs of the Empire following his death and the various succession crises that followed soon after. This was cemented in 1717 in Bengal when Mughal Emperor Farrukhsiyar officially granted the title of Nawab, equivalent to Grand duke, to him. This allowed for the English to grow their own influence in this anarchy. In 1717, Farrukhsiyar also issued a Farman, a decree, which granted the EIC the right to trade within Bengal coupled with some exemptions for taxation. While as per Indian custom, this was but honorary, in the eyes of company officials it had granted them an encompassing devolved sovereignty over Bengal, making them equals to even the newly christened Nawab and sowing the seeds of tension between the two.
The Sovereignty Trap
With the outbreak of the Austrian War of Succession in Europe, the EIC fought numerous wars against the French for control of the south-eastern coast of the subcontinent. Starting in September 1746, French Navy officer Mahé de La Bourdonnais landed off Madras with a Naval squadron and laid siege to the city, which fell after three days. Following a failed counterattack by the British and the Nawab of Arcot Anwaruddin Khan to retake the city and a failed siege of Pondicherry, the war ended in 1748 with the Treaty of Aix-la-Chapelle, which brought back the status-quo ante bellum. Between the Company's notion of sovereignty over Bengal and the outbreak of the Carnatic wars with France in the south, tensions with the Nawab were high. The attitude of Nawab Alivardi Khan, who ruled from 1740 to 1756, towards the Europeans was described as strict, causing friction between him and the British who frequently complained of Alivardi's taxing of them to finance defenses against the Marathas during the Maratha invasions of Bengal and not being allowed to enjoy the full privileges granted to them as per Farrukhsiyar's Decree. When Nawab Siraj ud-Daulah ascended to the throne in April of 1756, he was deeply suspicious of the large profits made by the British and troubled by their notion of sovereignty by constructing a fort at Calcutta. He began seeking an alliance with France, and despite this, he still tried to keep the line of negotiation with the EIC open, however negotiations broke down soon after the outbreak of the Seven Years' War. This war, while largely taking place in the South on the Indian front, prompted both the French and the British to improve their fortifications in Bengal, which Siraj ud-Daulah opposed. While the French yielded, the British did not, sparking war between both parties. On the 1st of June 1756, a column of the Nawab's men marched on the Company factory at Cossimbazar and seized it easily before setting off towards the other factory at Calcutta, which was besieged on June 16th and fell four days later. When news of this broke Madras on August 16th, the company sent a detachment under Colonel Robert Clive to retake Calcutta and restore the Company's previous privileges. The ensuing conflict lasted nearly a full year, culminating at the Battle of Plassey on the 23rd of June 1757. In the aftermath of which, Siraj ud-Daulah was arrested, tried, and executed by the British, and Mir Jafar was placed on the throne as a puppet of the British up till his removal in 1760, with his son-in-law Mir Qasim taking his place. Upon his ascension, Qasim awarded the company with lavish gifts as did Mir Jafar, though just like his predecessor, he too realized the difficulty of appeasing the company with the royal coffers at Murshidabad nearly depleted and ran into multiple issues with the company regarding trade. For example, to enrich themselves, the company had passed an enactment in virtue of which country goods that had European passes should be allowed to descend the Hooghly river, a major artery of trade, without paying the transit duty, whilst goods unprovided with such passes should pay a heavy tax. Even the English flag flying over a boat or a fleet of boats, or the appearance on board of Bengalis dressed as English Sepoys were sufficient to exempt the boats from the search. This system, initially in place to enrich company officials so greatly disorganized local trade that entire cities were left impoverished and Bengali merchants were left destitute. When Qasim retaliated, placing a modest nine percent duty on European traders' private goods as against a duty of 40 percent for Indians, the Company revolted against it, even after he reduced it from nine percent to 2.5 percent on salt. They further refused to admit the right of the local faujdars or police officers to adjudge disputes. Finally, Qasim abolished all custom duties on internal trade all together, the Company objected to this, demanding that that they be reinstated, to which Qasim refused, charting the path towards war.