In 1608 Mughal authorities allowed the English East India Company to establish a small trading settlement at Surat (now in the state of Gujarat), and this became the company's first headquarters town. It was followed in 1611 by a permanent factory at Machilipatnam on the Coromandel Coast, and in 1612 the company joined other already established European trading companies in Bengal in trade. However, following the decline of power the Mughal Empire in 1707 by the hands of the Marathas and later due to invasion from Persia (1739) and Afghanistan (1761) and after the East India Company's victory at the Battle of Plassey in 1757 and Battle of Buxar, both in Bengal 1764 and the abolishment of local rule (Nizamat) in Bengal in 1793, the Company gradually began to formally expand its territories across India. By the mid-19th century, and after the three Anglo-Maratha Wars the East India Company had become the paramount political and military power in South Asia, its territory held in trust for the British Crown.
Company rule in Bengal from 1793, however, ended with the Government of India Act 1858 following the events of the Bengal Rebellion of 1857. From then known as British India, it was thereafter directly ruled by the British Crown as a colonial possession of the United Kingdom, and India was officially known after 1876 as the Indian Empire. India was divided into British India, regions that were directly administered by the British, with Acts established and passed in British Parliament, and the Princely States, that were ruled by local rulers of different ethnic backgrounds. These rulers were allowed a measure of internal autonomy in exchange for British suzerainty. British India constituted a significant portion of India both in area and population; in 1910, for example, it covered approximately 54% of the area and included over 77% of the population. In addition, there were Portuguese and French exclaves in India. Independence from British rule was achieved in 1947 with the formation of two nations, the Dominions of India and Pakistan, the latter also including East Bengal, present-day Bangladesh.
The term British India also applied to Burma for a shorter time period: starting in 1824, a small part of Burma, and by 1886, almost two thirds of Burma had come under British India. This arrangement lasted until 1937, when Burma commenced being administered as a separate British colony. British India did not apply to other countries in the region, such as Sri Lanka (then Ceylon), which was a British Crown colony, or the Maldive Islands, which were a British protectorate. At its greatest extent, in the early 20th-century, the territory of British India extended as far as the frontiers of Persia in the west; Afghanistan in the northwest; Nepal in the north, Tibet in the northeast; and China, French Indo-China and Siam in the east. It also included the Aden in the Arabian Peninsula.
The East India Company, which was incorporated on 31 December 1600, established trade relations with Indian rulers in Masulipatam on the east coast in 1611 and Surat on the west coast in 1612. The company rented a small trading outpost in Madras in 1639. Bombay, which was ceded to the British Crown by Portugal as part of the wedding dowry of Catherine of Braganza in 1661, was in turn granted to the East India Company to be held in trust for the Crown.
Meanwhile, in eastern India, after obtaining permission from the Mughal Emperor Shah Jahan to trade with Bengal, the Company established its first factory at Hoogly in 1640. Almost a half-century later, after Mughal Emperor Aurengzeb forced the Company out of Hooghly due to tax evasion, Job Charnock purchased three small village and later renamed Calcutta in 1686 making it company's new headquarter. By the mid-18th century the three principal trading settlements including factories and fort, now called the Madras Presidency (or the Presidency of Fort St. George), the Bombay Presidency, and the Bengal Presidency (or the Presidency of Fort William) were each administered by a Governor.