Extending Company’s Rule – Charter Act 1813

The 1813 Charter Act asserted the Crown’s jurisdiction over British India, which defined the British constitutional position in India. It also expands the private trading scope for British merchants. Due to the long-running Napoleonic war, the operation of the continental system resulted in a significant fall in British trade. The British merchants wanted company trade to be allowed to all individual traders; therefore, the Charter Act was enacted to suit their demand.

Charter Act

The East India Company Act of 1813 is another name for the Charter Act of 1813. The British Parliament passed the Charter Act 1813, a continuation of the Company’s Charter to prolong its authority in India. The Company’s charter was previously extended in the Charters Act of 1793. It was renewed again in the Charter Acts of 1833 and 1853, each of which maintained the Company’s reign in India for another twenty years.

Introduction of Charter Act 1813

  • Napoleon Bonaparte promulgated the Berlin and Milan decree in 1806 and 1807.
  • The importation of British goods was prohibited in European countries that relied on France’s allies under this order. As a result, a continental system was established in Europe. So, the British merchants faced difficulties.
  • British merchants desired access to Asia’s ports, monopolised by the British East India Company.
  • Furthermore, Adam Smith’s laissez-faire philosophy was gaining popularity. It was a liberal trade philosophy in which the government interfered as little as possible in the economic matters of people or society. As a result of the continental system and laissez-faire philosophy, merchants insisted on ending the British East India Company’s monopoly.
  • In 1813, the United Kingdom’s Parliament approved the 1812 Charter Act and got royal assent on July 21, 1813.
  • An Act to continue the ownership of the British Territories in India, together along with certain exclusive privileges, in the East India Company for a further term;
    • to establish additional regulations for the Government of territories as mentioned above and the improved administration of justice inside the same, and
    • to regulate trade to and from places inside the boundaries of the said Company’s Charter.
  • The Charter Act of 1813 (East India Company Act 1813) ended the British East India Company’s monopoly on commercial commerce in India.

Provisions of the 1813 Charter Act

  • The 1813 Charter Act dissolved the East India Company’s monopoly in India, but the company’s monopoly in commerce with China and trade in tea with India was preserved.
  • The corporation’s control was extended for a further 20 years.
  • The act allowed people who wanted to go to India to promote moral and religious reform to do so (Preachers of Christianity).
  • This act regulated the company’s territorial income and commercial earnings. It was requested that it separate its jurisdictional and commercial accounts.
  • The company’s annual dividend was set at 10.5 per cent.
  • There was also a requirement that the company invested Rs.1 lakh in the education of Indians per year.
  • It gave local authorities in India the right to levy taxes on individuals and penalise those who won’t pay the

Role of Charter Act of 1813 in advance education in India

The Charter Act of 1813 was a turning point for India’s educational system. It established the framework for western culture and education in India, and the funding for education advancement was set at one lakh. The British took steps and initiatives to encourage education among the general public and revitalise Indian literature.


The 1813 Charter Act established and extended the direction and supervisory powers of the Board of Control. One of the most important clauses of the Charter Act of 1813 included— a sum of rupees 1 lakh per year for the reemergence and advancement of literary works and inspiration of India’s learned natives, as well as the emergence and advancement of scientific understanding among the residents of British Indian territories. It was the first move towards acknowledging state responsibility for education, and this term was one of the British government’s most significant measures concerning India.


What was the objective of introducing the 1813 Charter Act?

To give the company another 20 years of control,

When did the 1813 Charter Act get the Royal assent?

21st July 1813

What is the other name for the 1813 Charter Act?

The East India Company Act of 1813

At what percentage does the charter act set the annual dividend?

10.5 per cent of the dividend on India's revenue was distributed to the company's shareholders.

Why was the 1813 Charter Act important?

The United Kingdom's parliament enacted the Charter Act of 1813 to renew the Company's Charter. Laissez-Faire and Napoleon Bonaparte's continental system ended the Company's monopoly over all trade, except for tea and trade with China.

How frequently were Charter Acts enacted?

The Charter Acts extended the Company's Charter for a further twenty years, and it was done once every 20 years. It increased the Company's authority over India.

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