British success at the Battle of Plassey in 1757 marked a decisive upswing in the East India Company's fortunes, for less than a decade later in 1765 the Mughal emperor gave it the official right to collect Bengal's revenues. This was little more than a recognition of the Company's actual position as de facto ruler of Bengal; by this time the independent government of Bengal had been rendered toothless. A good deal of Bengal's resources was already entering the coffers of the EIC and its employees; now all of the state's revenues would officially belong to the Company, except for the annual tribute owed to the Mughal emperor in Delhi. The conferment of an official position on the East India Company was primarily a pragmatic means for the imperial court to ensure that it obtained some small share of Bengal's riches. Its symbolic significance was tremendous, however, since it meant that the English were now formally incorporated into the Mughal imperial system. Foreigners and merchants they might be, but now they were also sanctioned participants in the realm of Indian politics.

In practical terms, by 1765 the Mughal state was merely a small regional kingdom among a welter of others. Several Mughal successor states had made cash payments to the imperial dynasty in their first decades of existence, but by this time had ceased to express any loyalty other than in name.