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In 1661 King Charles II of Britain married the Portuguese princess Catherine and received Bombay, an island along India's west coast, as part of the dowry. Later, the King rented Bombay to the British East India Company. Soon after, the British East India Company already had several trading establishments in India, at Surat, Masulipattam and Fort St.George (Madras). King Charles also gave the Company the right to issue currency, erect forts, exercise jurisdiction over English subjects and declare war/peace with natives.

The Company faced competition from the French, Dutch and Portuguese, all of whom had trading interests in India. English and French had their companies in India. Madras and Pondicherry were the chief trading centres for the English whereas the French centre was on the Coromandel Coast. The relations between both companies were uncertain.

The Carnatic region was totally disturbed politically. The governor was so engrossed with Marathas and Northern India that he hardly had any time for the Carnatic. Later the governor was killed by the Marathas. The appointment of the new Nawab worsened the problems of the Carnatic region. But untill this time the English and French did not take active interest in Indian politics.

In 1740, England and France took opposite sides in the War of the Austrian Succession. This brought the two companies in India technically in the state of war.

After three Carnatic wars, eventually the British East India Company defeated the French forces at the battle of Wandiwash ending almost a century of conflict over supremacy in India. The last battle gave the British trading company a far superior position in India compared to the other Europeans.

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