Following the death of Aurangzeb in 1707, the Mughal Empire enters a period of decline under less capable rulers, leading several occupied territories to strive for independence. Bengal emerges as a key region during this shift, incorporating areas like present-day Odisha, Bihar, and Bangladesh, while maintaining thriving industries in textiles and cotton. In 1717, Farrukhsiyar grants the British East India Company free trade rights in Bengal for an annual fee, while local leaders like Murshid Quli Khan begin governing the region with increasing autonomy.
After Murshid Quli Khan’s death in 1727, Shuja-ud-Daula becomes the Nawab and appoints Allivardi Khan as the deputy governor of Bihar. Following Shuja-ud-Daula's death in 1739, his son Sarfaraz Khan takes power but is soon overthrown and killed by Allivardi Khan in a 1740 rebellion. Allivardi Khan consolidates his rule by paying a large tribute to the Mughal emperor, effectively governing Bengal independently and famously comparing Europeans to bees that yield honey if left alone but sting if provoked.
Siraj-ud-Daula succeeds Allivardi Khan in 1756, facing immediate resentment from rivals and tensions with the British over their fortification of settlements and harboring of his enemies. In retaliation, the Nawab attacks Fort William in Calcutta, forcing the British to retreat to Fulta and setting the stage for the infamous black hole tragedy reported by Holwell. These events lead to a conspiracy involving the Nawab's chief commander Mir Jafar and the British under Robert Clive, culminating in the 1757 Battle of Plassey where Siraj-ud-Daula is defeated and Mir Jafar is installed as a puppet ruler.
Dissatisfied with Mir Jafar, the British replace him with Mir Qasim in 1760, but he soon begins asserting his independence by moving the capital to Munger and reforming trade taxes to benefit local merchants. After Mir Qasim's efforts to curb British influence lead to conflict, he joins forces with the Nawab of Awadh and the Mughal Emperor in the 1764 Battle of Buxar, where they are defeated by Hector Munro's forces. This victory enables the British to impose the Treaty of Allahabad, granting them Diwani rights over Bengal, Bihar, and Odisha, and establishing a dual system of governance that marks the beginning of formal British rule in India.