Battle of Buxar

Background

Mir Qasim had been installed as Nawab of Bengal by the East India Company in 1760, succeeding Mir Jafar, but relations soon deteriorated over Company merchants' abuse of duty-free trading privileges and Mir Qasim's efforts to build an independent, better-administered state and army. The immediate trigger was the dastak system: Company servants and their Indian agents used duty-free trading passes, granted for the Company's official business, to carry on private trade without paying the internal transit duties owed by Indian merchants, giving them a decisive commercial advantage. When Mir Qasim responded in 1763 by abolishing internal customs duties altogether, placing Indian traders on an equal footing with the Company's men, Company officials in Calcutta treated the move as an intolerable challenge to their privileges. Mir Qasim had also relocated his capital from Murshidabad to Munger, further from Company oversight, and built up a modernized army trained and partly officered along European lines, with its own arms manufactory. Conflict broke out in 1763, and after early clashes Mir Qasim was driven from Bengal. He allied with Shuja-ud-Daula, the Nawab of Awadh, and with the Mughal emperor Shah Alam II, who was then largely a figurehead ruler dependent on regional powers, to mount a joint campaign to expel the Company from Bengal.

The battle

The allied forces, considerably larger than the Company's army, met a Company force under Major Hector Munro at Buxar on 22 October 1764. Despite the numerical disadvantage, Company forces, benefiting from superior discipline, training and artillery use, inflicted a decisive defeat on the coalition. Mir Qasim fled and disappeared from political life; Shuja-ud-Daula continued resistance briefly before also being defeated; and Shah Alam II, whose position in the coalition had in any case been ambiguous, went over to the Company side.

Treaty of Allahabad and the Diwani

The battle's political consequences were settled by the Treaty of Allahabad in 1765, negotiated by Robert Clive, who had returned to India as Governor of Bengal. Under its terms, Shah Alam II granted the East India Company the Diwani, the right to collect and administer land revenue, in Bengal, Bihar and Odisha, in exchange for an annual payment to the emperor and a nominal continuation of Mughal sovereignty. Awadh was restored to Shuja-ud-Daula as a subordinate ally, indemnified but under Company influence. The Diwani grant is generally treated by historians as the point at which the East India Company converted itself from a trading concern with a private army into a territorial revenue-collecting power in eastern India, laying the administrative and fiscal foundation for the expansion of Company rule across the subcontinent over the following century.

Dual Government

Rather than administer Bengal directly, Clive left the Nizamat, the executive and criminal-justice functions of government, nominally in the hands of a reinstated Bengal Nawab and his officials, while the Company exercised the Diwani through Indian revenue officers acting under Company supervision. This arrangement, later known as the system of Dual Government, divided responsibility for revenue collection from responsibility for law and order and proved poorly coordinated in practice; contemporaries, including the parliamentarian Edmund Burke, later criticized it as a structure that extracted revenue without accountability for the governed population's welfare. The system is widely linked by historians to the administrative disorder that contributed to the severity of the Bengal famine of 1770, and it was formally ended in 1772 when Warren Hastings, on becoming Governor of Bengal, brought revenue administration under direct Company control.