After establishing the colony in India, the Company used its resources and establishment it’s central from Sri Lanka in south, Mauritius in south-west and many other countries too. The English interest of expansion was influenced by two major factors the one being need to find new market and goods procured in India to be used in exchange for trade with China and for feeding the England in south and south-east Asia.

The other was needed to safeguard the Indian empire and trade routes to India and China, besides there was the compulsion of British foreign policy in India. The relative important of these factors varied from the situation to situation.

The British was keenly interested in Burma due to interplay of different set of commercial and strategic reasons. Besides exporting tin, pepper and ivory it was also a major supplier of timber. Besides that Delta was also need of British Government.

The settlements outside India were in straits of Malacca so they are known as straits settlement.

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i. Penang:

In 1592, the first English ship, the Edward Bonaventure, reached the island of Penang in the Straits of Malacca. By 1600, the East India Company had established twelve factories in the Malay Archipelago. But by 1625, it felt that the Malaya spices did not provide adequate profits and then decided to concentrate its trade activities on India. Private British traders, though, continued to maintain trade contact with the Straits, trading mostly in and pepper from the Straits and cotton piece-goods from India.

In 1784, Fracia Light, acting on behalf of the East India Company, signed an agreement with the Sultan of Kedah allowing an English settlement on the and of Penang. The English in return promised to help the Sultan militarily in case of attacks from his neighbours. Government of Madras refused to ratify this agreement for fear that it involves the Company in unnecessary wars without bringing in adequate gains.

At this the Sultan of Kedah tried to retake Penang by force. His armies however, were defeated by Fracia Light. In the subsequent treaty, signed in 1791, Penang was handed over to the English in return of an annual payment to the Sultan. The English were given control over a small strip of land on the Malayan mainland opposite Penang. The English were thus able to establish a major naval station on the eastern side of the Bay of Bengal. The added advantage was that the trade in Sumatran pepper, about 60% of world produce in pepper passed through Penang.

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In 1805, Penang was made into a presidency like Bombay and Madras, administered by a Governor. Bengal paid for the maintenance of the settlement at Penang. Its over 50 British officers drew their salary from the Bengal treasury and the average deficit of Penang during these years was paid by Bengal.

ii. Sumatra:

The British had also established contact with the Bugi rulers at Riau in Sumatra. The Company’s government in Bengal felt that a settlement at Riau would safeguard the trade routes to China and make Riau an entrepot of archipelagic trade. But a Dutch attack on the Bugis in 1784, forced the East India Company to shelve its plans.

The French revolution took place and the armies of the French revolution, in 1794, overran Holland. The new Dutch government was hostile to the English. The English on their part retaliated by conquering the Dutch possessions in India, Sri Lanka, west coast of Sumatra, Molucca, Menado in Sulawesi, Malacca and Riau.

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No action was taken against the Dutch possession of Java because by the second half of the 1790s the Governor-General in India, Wellesley, had involved the Company in costly wars within India and the French seemed to threaten India from Egypt in the West.

However, when the Dutch in Europe allied once again with Napoleon then the Board of Control, in August 1810, instructed the Governor-General Minto, to expel the Dutch from Java in order to prevent the French from having another base in South-East Asia.

Over a hundred ships and 12,000 men from India were used to establish English control over Java. The restoration of peace and friendly relations with the Dutch in Europe after 1813 made for a reordering of the conquests in South-East Asia. The English retained Sri Lanka and Penang for strategic reasons. But by now the commercial importance of the archipelago had come down because clove and nutmeg, the two important spices of the archipelagic trade were now cultivated outside the Meluccas too. Moreover, the opium grown in Malwa was fast replacing other goods in the China trade. The Dutch then were given back their colonies in the Straits.

iii. Burma:

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The case of Burma involved the interplay of a different set commercial and strategic reason. Burma exported some costly items like pepper and ivory. More importantly it was a major supplier of timber for small but important ship-building and repair industry based in Calcutta. Also, towards the end of the eighteenth century the deltas of the Irrawaddy river became important suppliers of rice to the growing settlements in the South­east and to Bengal.

The Company’s Directors, on their side did not react to the situation because they had decided that Negrais was after all not worth its cost. After that the Company kept clear of Burma for about twenty years. There was very little contact between the English and the Burmese.

Towards its Asian neighbours, however, Burma continued to be very aggressive. In 1823-24, the Burmese military, pursuing rebels, entered and occupied Assam and Manipur and prepared to attack Chittagong. These territories of Assam, Manipur and Chittagong, however, were claimed by the English in India. The resultant attack by British Indian army on Burma has come to be known as the First Anglo-Burmese War.