3. The company faced stiff competition in the spice trade from the Dutch
Trading in spices from the Spice Islands had been long established by the Dutch by the time the East India Company became involved in the activity, and the newcomer was hampered in its dealings accordingly. In 1608, English ships began stopping in India, trading with the Mughals there, and in 1610 its first factory was established, on the Bay of Bengal. Profits from Indian trade were high, and after receiving an extension of the monopoly from James I in 1609, the company asked his majesty to send a diplomatic envoy to the Mughal Empire to establish exclusive trade rights and gain territory to be occupied by company facilities and employees.
In 1612 James I sent Thomas Roe to meet with Emperor Jahangir. The East India Company was given exclusive rights to erect settlements and factories. In return, Jahangir was to receive rare goods and gold from the company. Jahangir was so pleased with the arrangement that he sent a letter to James I, promising to protect the settlements and company property from enemies. “Neither Portugal nor any other shall dare to molest their quiet” he wrote, adding “I have commanded all my Royal governors to give them freedom…to buy, sell, and to transport into their country at their pleasure”. It was the beginning of the British Empire in India.