The greatest discontinuity in the history of Bengal region occurred on June 23, 1757 when the East India Company - a mercantile company of England became the virtual ruler of Bengal by defeating Nawab Siraj-ud Daulah through conspiracy. Territorial rule by a trading company resulted in the commercialization of power.
The initial effects of the British rule were highly destructive. As the historian R.C. Dutt notes, "the people of Bengal had been used to tyranny, but had never lived under an oppression so far reaching in its effects, extending to every village market and every manufacturer's loom. They had been used to arbitrary acts from men in power, but had never suffered from a system which touched their trades, their occupations, their lives so closely. The springs of their industry were stopped, the sources of their wealth dried up". The plunder of Bengal directly contributed to the industrial revolution in England. The capital amassed in Bengal was invested in the nascent British industries. Lack of capital and fall of demand, on the other hand, resulted in deindustrialization in the Bangladesh region. The muslin industry virtually disappeared in the wake of the British rule.
In the long run, the British rule in South Asia contributed to transformation of the traditional society in various ways. The introduction of British law, a modern bureaucracy, new modes of communication, the English language and a modern education system, and the opening of the local market to international trade opened new horizons for development in various spheres of life. The new ideas originating from the West produced a ferment in the South Asian mind. The upshot of this ferment were streams of intellectual movements which have often been compared to the Renaissance. Furthermore, the Pax Britannica imposed on South Asia created an universal empire that brought different areas of the sub-continent closer to each other.
The British rule in Bengal promoted simultaneously the forces of unity and division in the society. The city-based Hindu middle classes became the fiery champions of all-India based nationalism. At the same time, the British rule brought to surface the rivalry between the Hindus and Muslims which lay dormant during the five hundred years of Muslim rule. The class conflict between Muslim peasantry and Hindu intermediaries during the Muslim rule was diffused by the fact that these intermediaries themselves were agents of the Muslim rulers. Furthermore, the scope of exploitation was limited in the subsistence economy of pre-British Bengal.
The economic exploitation of the British provoked an intense reaction against the Raj in Bengal. However, the grievances against the British rule varied from community to community. The Hindu middle class, which styled itself as the bhadralok, was the greatest beneficiary of the British rule. The Hindu middle class primarily originated from trading classes, intermediaries of revenue administration and subordinate jobs in the imperial administration. On the contrary, the establishment of the British rule deprived the immigrant Muslim aristocracy (ashraf) of state patronage. The immigrant Muslim - upper caste Hindu coalition which characterized the Muslim rule was replaced by a new entente of the British and the caste Hindus. The new land settlement policy of the British ruined the traditional Muslim landlords. The Muslim aristocracy which had hitherto been disdainful of their native co-religionists sought the political support of the downtrodden Muslim peasantry (atraf) who were exploited by Hindu landlords and moneylenders. The Muslim elite in Bengal manipulated to their advantage the social insecurity of the less privileged without giving up their exclusiveness.
The conflict between Muslim peasants and Hindu landlords was reinforced by the rivalry between Hindu and Muslim middle classes for the patronage of the imperial rulers. In the nineteenth century, both Hindu and Muslim middle classes expanded significantly. The Muslim middle class did not remain confined to traditional aristocracy which consisted primarily of immigrants from other Muslim countries. The British rule in Bengal contributed to the emergence of a vernacular elite from among locally converted Muslims in the second half of the nineteenth century. This was facilitated by a significant expansion of jute cultivation in the Bangladesh region. The increase in jute exports benefited the surplus farmers (Jotedars) in the lower Bengal where the Muslims were in a majority. The economic affluence of surplus farmers encouraged the expansion of secular education among local Muslims. For example, the number of Muslim students in Bengal increased by 74 percent between 1882-83 and 1912-13.
Faced with the economic and cultural domination of the Hindu intermediaries in Bengal (bhadralok), the ashraf (traditional Muslim aristocracy), the newly created Muslim jotedars who constituted the vernacular elite and Muslim peasants (atraf) closed ranks. Despite their outward unity, the coalition of various Muslim interest groups in Bengal was fragile. The interests and ideological orientations of these groups were dissimilar. Unlike the jotedars and peasants, the ashraf in Bengal spoke Urdu. The vernacular Muslim elites and peasants in Bengal wanted agrarian reforms; the ashraf was a staunch proponent of absentee landlordism. The Muslim vernacular elite and atraf identified themselves with the local culture and language, the ashraf was enthralled by Islamic universalism. The internal contradictions of the Muslim society in Bengal were naturally mirrored in their political life.
Initially, the leadership of the Muslim community in Bengal belonged to ashraf for two reasons. First, the size of the vernacular elite was too small in the beginning of the twentieth century and the vernacular elite itself tried to imitate the traditional aristocracy. Secondly, because of the institutional vacuum in the rural areas, it was very difficult to mobilise politically Muslim masses in the Bengal region. The easiest means of arousing such masses was to appeal to religious sentiments and emotions. In this charged atmosphere the natural leadership of the Muslim masses in Bengal lay with the immigrant ashraf who monopolized the religious leadership.
The rivalry between Muslim ashraf and Hindu bhadralok first surfaced in the political arena, when the British partitioned the province of Bengal in 1905 for administrative reasons. The nascent Muslim middle class under the leadership of the Muslim Nawab of Dhaka supported the partition in the hope of getting patronage of the British rulers. To the Hindu bhadralok who had extensive economic interests on both sides of partitioned Bengal, the move to separate the Bengali-speaking areas in East Bengal and Assam was a big jolt. They viewed it as a sinister design to weaken Bengal which was the vanguard of struggle for independence. The bhadralok class idolized the "Golden Bengal". Though initially the anti-partition movement was non-violent, the dark anger of the Hindu middle class soon found its expression in terroristic activities. The emotionally charged atmosphere culminated in communal riots. The partition of Bengal ultimately turned out to be a defeat for all. The Raj had to eat the humble pie and annul the partition in 1911. To the Muslims, the annulment of the partition was a major disappointment. It virtually shook their faith in the British rulers. To the Hindu bhadralok of Bengal, the annulment was a pyrrhic victory. "The net result of these developments in Bengal during the first decade of this century, so far as the bhadralok leadership of Bengal was concerned, lay in the exposure of its isolation, its inner contradictions and the essentially opportunistic character of its politics".
The communal politics of confrontation and violence which erupted during the partition of Bengal was interrupted by a brief honeymoon during the non-cooperation movement led by the Indian National Congress and the Khilafat movement of the Indian Muslims in the second decade of 20th century. Bengal witnessed in the twenties the emergence of the charismatic; leadership of Chitta Ranjan Das who had the foresight to appreciate the alienation of the Muslim middle classes. In 1923 Das signed a pact with Fazlul Huq, Suhrawardy and other Muslim leaders. This pact which is known as the Bengal Pact provided guarantees for due representation of Muslims in politics and administration. The spirit of Hindu-Muslim rapprochement evaporated with the death of C.R. Das in 1925. However, even if Das were alive he might not have succeeded in containing the communal backlash. The communal problem was not unique to Bengal, it became the main issue in all India politics. As the communal tension mounted in the 1930s, the Muslim ashraf in Bengal which had close ties with the Muslim leadership in other parts of the sub-continent pursued a policy of communal confrontation.