The Company had two basic objectives at this stage:

1.The first was to acquire a monopoly of trade with India.

2.This meant that other English or European merchants or trading companies should not compete with it in purchase and sale of Indian products. Nor should the Indian merchants do so.

3.This would enable the East India Company to buy endian products as cheaply as possible and sell they in World markets at as high a price as possible. Thus Indian economic surplus was to bi appropriated through monopoly trade.

4.The English competitors were kept out by persuading the British Government to grant the East India Company through a Royal Charter a monopoly of the right to trade with India and the East.

5.To acquire monopoly against Indian traders and to prevent Indian rulers from interfering with its trade, the Company took advantage of the disintegration of the Mughal Empire to acquire increasing political domination and control over different parts of the country.

6.The second major objective of colonialism at this stage was to directly appropriate or take over governmental revenues through control over state power.

7. The East India Company required large financial resources to wage wars in India and on the seas against European rivals and Indian rulers and to maintain naval forces, forts and armies around their trading posts, etc.

8.British industrial products could not compete with Indian handicraft products till the beginning of the 19th century. British Government, heavily influenced by mercantilist theories, was also unhappy with the export of gold and silver from Britain.

9. The East India Company now used its political power to acquire monopolistic control over Indian trade and handicraft products. Indian traders were gradually replaced and ruined, while the weavers and other craftsmen were compelled either to sell their products at uneconomic rates or to work for the Company at low wages.

10. An important feature of colonialism during this period was that no basic changes were introduced in the colony in administration, judicial system, transport and communication, methods of agricultural or industrial production, forms of business management or economic organization (except for the Permanent Settlement in Bengal which really belonged to the second stage of colonialism).