In the following, I will briefly go through the story of British India. The information below is mainly from The New Encyclopaedia Britannica (NEB; 1974), Kachru (1982 and 1983), Bailey (1991). It was Vasco da Gama who, in 1498, came ashore at Calicut, and restored a link between Europe and the East. India was "a land of spices and of marvels" to European people. Portugal's control of the Indian Ocean lasted throughout the 16th century. The turning point came in the 1580s: in 1580 Portugal was annexed to Spain. Spain was not too interested in former interests of Portugal, and gradually the control of the East fell through their hands. The route to the East was opened to the Dutch and English. The Dutch were first ones to arrive in 1595. The Dutch objective was, plain and simply, the trade. They were not so interested in proselytizing people, or trying to expand their empire; they were monopolists rather than imperialists (NEB 392).
The document establishing the British contact with the Indian subcontinent was the Charter of December 31, 1600, granted by Queen Elizabeth I. It granted a monopoly on trade with India and the East to some merchants of London - the East India Company was formed (Kachru 1982:353). The company's objective was actually the spices of Indonesia, but because of Dutch opposition (e.g. massacre of Amboina in 1623), they decided to change plans and go to India instead. The English won victory of some Portuguese in India as well, and the Mughal court, which resented the Portuguese, granted the English the right to trade and to establish factories in return for becoming the virtual naval auxiliaries of the empire (NEB 393).
The English trade became more profitable than that of the Dutch, and the region gradually fell under British contact and domination. In 1818, the British Empire became the British Empire of India, instead of the British Empire in India. The diplomatic settlement remained in force until 1947 (401).
A question that has frequently been asked is: How was this sort of subjection of a whole subcontinent possible? Probably the answer lies in the innate divisiveness of Hindu society (class and caste divisions); for the Indians the neighbours were more unwelcome than outsiders; and the outsiders could actually help in defeating the neighbour. The outsiders were, in the end, accepted as masters; the Indians would rather be mastered by them than dominated by a rivaling family inside India (402).