NCERT Class 8 History — Chapter 1: From Trade to Territory The Company Establishes Power

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The "Farman" issued by Aurangzeb granted the East India Company:

Official previous-year question

Verified 1 Aug 2026.

Options

AThe right to mint coins in Bombay.
BThe ownership of the city of Calcutta.
CThe right to trade duty-free.
DThe right to keep a private army.

Did you get this right?

Solution

Correct Option

The correct option is

The right to trade duty-free.

Explanation

Royal Farmans (imperial decrees) issued by Mughal Emperors were instrumental in defining the legal and commercial status of European trading companies in India. These decrees often regulated customs duties and trading rights within specific provinces.

Detailed Analysis

Context of the Grant: In 1691, a Farman was issued during the reign of Emperor Aurangzeb regarding the East India Company's operations in Bengal.

Privilege Granted: The Farman granted the East India Company the right to carry on trade in Bengal without paying customs duties (duty-free trade).
Condition: In lieu of customs duties, the Company was required to pay a fixed annual sum of Rs. 3,000 to the imperial treasury.

Analysis of Incorrect Options:

The right to mint coins in Bombay.: The right to mint coins in Bombay (which would be valid throughout the Mughal Empire) was granted by Emperor Farrukhsiyar in his Farman of 1717, not by Aurangzeb.
The ownership of the city of Calcutta.: The Company acquired the Zamindari rights of three villages (Sutanuti, Gobindapur, and Kalikata) in 1698 from Prince Azim-us-Shan, the Subahdar of Bengal. This led to the development of Calcutta but was not a direct grant of city ownership via Aurangzeb's Farman.
The right to keep a private army.: The right to maintain a private army was not the subject of this specific trade-related Farman.

Key Takeaway: Aurangzeb's Farman of 1691 exempted the East India Company from paying customs duties on their trade in Bengal in exchange for a fixed annual payment of Rs. 3,000.

Your note

More from Chapter 1: From Trade to Territory The Company Establishes Power

With reference to the entry of European trading companies into India, consider the following statements: 1. The Royal Charter of 1600 granted the East India Company the exclusive right to trade with the East, preventing all European powers from competing with it. 2. The Portuguese had established a presence on the western coast of India before the English ships arrived. 3. Vasco da Gama discovered the sea route to India in 1502. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the early trade of the East India Company in Bengal: 1. The first English factory was set up on the banks of the river Hugli in 1651. 2. The Company acquired zamindari rights over three villages, excluding Kalikata. 3. Emperor Aurangzeb issued a farman granting the Company the right to trade duty-free. Which of the statements given above is/are correct?

medium

Who among the following commanders of Sirajuddaulah led a contingent but did not participate in the fighting during the Battle of Plassey?

easy

Consider the following statements regarding the Battle of Plassey (1757): 1. It was the first major victory the French East India Company won in India. 2. Robert Clive secured the support of Mir Jafar by promising to make him the Nawab after crushing Sirajuddaulah. 3. After the defeat, Sirajuddaulah was assassinated. Which of the statements given above is/are correct?

medium

With reference to the grant of Diwani rights to the East India Company, consider the following statements: 1. The Mughal Emperor appointed the Company as the Diwan of the provinces of Bengal in 1765. 2. The Diwani rights restricted the Company from using the revenue resources of Bengal to finance its expenses. 3. The assumption of Diwani increased the outflow of gold and silver from Britain to India. Which of the statements given above is/are correct?

medium

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Correct Option

The correct option is

The right to trade duty-free.

Explanation

Detailed Analysis

Context of the Grant: In 1691, a Farman was issued during the reign of Emperor Aurangzeb regarding the East India Company's operations in Bengal.

Privilege Granted: The Farman granted the East India Company the right to carry on trade in Bengal without paying customs duties (duty-free trade).
Condition: In lieu of customs duties, the Company was required to pay a fixed annual sum of Rs. 3,000 to the imperial treasury.

Analysis of Incorrect Options:

The right to mint coins in Bombay.: The right to mint coins in Bombay (which would be valid throughout the Mughal Empire) was granted by Emperor Farrukhsiyar in his Farman of 1717, not by Aurangzeb.
The ownership of the city of Calcutta.: The Company acquired the Zamindari rights of three villages (Sutanuti, Gobindapur, and Kalikata) in 1698 from Prince Azim-us-Shan, the Subahdar of Bengal. This led to the development of Calcutta but was not a direct grant of city ownership via Aurangzeb's Farman.
The right to keep a private army.: The right to maintain a private army was not the subject of this specific trade-related Farman.

Key Takeaway: Aurangzeb's Farman of 1691 exempted the East India Company from paying customs duties on their trade in Bengal in exchange for a fixed annual payment of Rs. 3,000.