Clive consolidates his victory at Plassey at the Battle of Buxar (in Bihar), in which he defeats the Mughal emperor, Shah Alam II, in 1764.

As a consequence, Shah Alam is coerced to appoint the company to be the diwan (collector of revenue) for the areas of Bengal, Bihar, and Orissa.

The company thus becomes the supreme, but not the titular, power in much of the Ganges Valley, and company agents continue to trade on terms highly favorable to them.

This allows the company to exercise a monopoly over opium production and export in India, to encourage ryots (peasant cultivators) to cultivate the cash crops of indigo and opium with cash advances, and to prohibit the "hoarding" of rice.

The Company develops a method of growing opium poppies cheaply and abundantly at Plassey and ...