The end of the Seven Years War in 1763 found Britain the pre-eminent European colonial power. Its main rivals, France and Spain, had little hope of ever controlling North America, the Caribbean, India, and the major sea-going trade routes. Yet, in this position of power lay the seeds of events which would affect the entire world for the next two hundred years. The loss of Britain's American colonies and the rising influence of British power in India were the next steps in that progression.

India

The army of the English East Indian Company (henceforth the ‘Company’), under the command of Robert Clive and assisted by naval and military elements of the Crown, had defeated the Nawab of Bengal. By 1765, the Company was effectively the ruler of his entire province. After the initial shock brought about by the sheer scale of Clive's victories during the Seven Years War, the government realised that a joint stock company now controlled the lives of millions of Indians. The complexities of so doing were hidden from the political elite in London, looking through a fog created by the myths of vast wealth, exotic cultures, wonderful art and literature. The actual business of government fell to the small number of Britons who went out to India. The Directors of the East India Company in London were still focused on trade; they did not want to rule vast tracts of India; trade alone would bring huge profits into the Company's coffers. Unfortunately they were wrong. The costs of government were far greater than imagined.