Read the given passage and answer the questions that follow.
In 1600, the East India Company acquired a charter from the ruler of England, Queen Elizabeth I, granting it the sole right to trade with the East. This meant that no other trading group in England could compete with the East India Company. With this charter, the Company could venture across the oceans, looking for new lands from which it could buy goods at a cheap price and carry them back to Europe to sell at higher prices.
The Company did not have to fear competition from other English trading companies. Mercantile trading companies in those days made profit primarily by excluding competition, so that they could buy cheap and sell dear. The royal charter, however, could not prevent other European powers from entering the Eastern markets. By the time the first English ships sailed down the west coast of Africa, round the Cape of Good Hope, and crossed the Indian Ocean, the Portuguese had already established their presence in the western coast of India, and had their base in Goa. In fact, it was Vasco da Gama, a Portuguese explorer, who had discovered this sea route to India in 1498. By the early seventeenth century, the Dutch too were exploring the possibilities of trade in the Indian Ocean. Soon the French traders arrived on the scene.The problem was that all the companies were interested in buying the same things. The fine qualities of cotton and silk produced in India had a big market in Europe. Pepper, cloves, cardamom and cinnamon too were in great demand. Competition amongst the European companies inevitably pushed up the prices at which these goods could be purchased, and this
reduced the profits that could be earned. The only way the trading companies could flourish was by eliminating rival competitors. The urge to secure markets, therefore, led to fierce battles between the trading companies.
The charter of ‘the sole right to trade with the East’ meant for the East India Company that: In 1600, the East India Company acquired a charter from the ruler of England, Queen Elizabeth I, granting it the sole right to trade with the East. This meant that no other trading group in England could compete with the East India Company. With this charter, the Company could venture across the oceans, looking for new lands from which it could buy goods at a cheap price and carry them back to Europe to sell at higher prices.
The Company did not have to fear competition from other English trading companies. Mercantile trading companies in those days made profit primarily by excluding competition, so that they could buy cheap and sell dear. The royal charter, however, could not prevent other European powers from entering the Eastern markets. By the time the first English ships sailed down the west coast of Africa, round the Cape of Good Hope, and crossed the Indian Ocean, the Portuguese had already established their presence in the western coast of India, and had their base in Goa. In fact, it was Vasco da Gama, a Portuguese explorer, who had discovered this sea route to India in 1498. By the early seventeenth century, the Dutch too were exploring the possibilities of trade in the Indian Ocean. Soon the French traders arrived on the scene.The problem was that all the companies were interested in buying the same things. The fine qualities of cotton and silk produced in India had a big market in Europe. Pepper, cloves, cardamom and cinnamon too were in great demand. Competition amongst the European companies inevitably pushed up the prices at which these goods could be purchased, and this
reduced the profits that could be earned. The only way the trading companies could flourish was by eliminating rival competitors. The urge to secure markets, therefore, led to fierce battles between the trading companies.
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Correct answer: A
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