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The company built a factory near the banks of river Hugli in 1651 to
1. buy Neel (Indigo) from local farmers and send it to England
2. manufacture cotton textiles for exporting to England
3. establish a base from which the factors could operate
4. buy spices for sending them to England

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Correct Answer - Option 3 : establish a base from which the factors could operate

The correct answer is establish a base from which the factors could operate.

  • The first factory of British was established at Hugli in 1651.
  • In 1600, the East India Company acquired a charter from the ruler of England, Queen Elizabeth I, granting it the sole right to trade with the East, without competition from other British traders.
  • The employees of the Company also carried on their private trades, and so they were expected to pay duty. But they refused, which angered the Nawab of Bengal, Murshid Quli Khan, and led to fierce battles.

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