14. The East India Company established and monopolized the opium trade in China
In the late 18th century, the EIC eliminated the private cultivation of opium in Bengal and created a monopoly in the opium trade by licensing growers and establishing quotas in Bengal. China banned the importation of opium, and the EIC circumvented the ban by selling opium to vendors in Calcutta, who then smuggled it, with EIC support, into China. By the end of the 1700s, nearly 1,000 tons of opium were being smuggled into China annually. The EIC used its troops and ships to combat piracy along the opium trade routes, protecting the illegal shipments from being interdicted by Chinese and Malaccan ships.
After the importation of illegal opium reached nearly 1,500 tons annually, China made the activity subject to the death penalty. The result was a series of wars known as the Opium Wars. The end of the First Opium War led to the cession of Hong Kong to Great Britain, and to the legalization of the opium trade with China. The EIC continued to monopolize the opium trade in India and Afghanistan, shipping the opium to third-party traders who operated in China. Eventually, competition from opium growers in Turkey and other regions outside of the control of the EIC led to its reducing its interest in the production of opium and shifting it to other products.