Vol. 7, Issue 2, Part F (2025)

The grant of the Diwani of Bengal, Bihar, and Orissa to the East India Company in 1765 stands as a crucial turning point in the political history of eighteenth-century India. While conventionally identified as the formal inauguration of colonial rule, the event must also be examined as a reconfiguration of authority that bridged the waning structures of the Mughal order and the emergent practices of Company administration. The Diwani not only transferred fiscal rights but also restructured the very texture of regime: it displaced indigenous patterns of sovereignty, altered the institutional balance between the Mughal emperor, the Nawab of Bengal, and the Company, and redefined the relationship between land revenue and political authority.
This paper argues that the Diwani functioned less as a singular rupture and more as a moment of layered transformation. The Company, initially acting as the emperor’s revenue agent, quickly adapted Mughal bureaucratic practices to consolidate its position, thereby producing a hybrid framework of governance that was both continuous with and disruptive of earlier models. By examining archival records, revenue settlements, and contemporary accounts, the study highlights how the grant of the Diwani enabled the Company to legitimate its authority under a Mughal idiom even as it introduced a logic of extractive fiscal control. The analysis situates the Diwani within broader debates on sovereignty, legitimacy, and colonial state formation, showing how this episode recast the political economy of Bengal and provided the foundation for the Company-state. Ultimately, the grant of the Diwani emerges as a decisive episode in the restructuring of power and regime, marking the subtle yet irreversible transition from imperial to colonial governance.