The City of London is full of monuments, but none record the East India Company's existence. Like a snake, the City seems embarrassed of an earlier skin. This being Britain, however, what remains is a pub - the East India Arms on Fenchurch Street. Popular with office workers, it stands at the centre of the Company's former commercial universe. Westwards lies Philpott Street, where it was originally based in its founding governor Thomas Smythe's mansion. Just up where Lime Street meets Leadenhall Street is the site of East India House, the Company's headquarters for more than two centuries, a plot currently occupied by the steel and glass of the Lloyds insurance building. And heading south is Mincing Lane, once the centre of Britain's tea trade.

The absence of any memorial to the East India Company at any of these sites is odd. For this was not just any corporation. Not only was it the first major shareholder owned company, but also a pivot that changed the course of economic history. During its lifetime, the Company first reversed the ancient flow of wealth from West to East, and then put in place new systems of exchange and exploitation. For the first 150 years after its establishment by Queen Elizabeth I in 1600, the Company remained Asia's commercial supplicant, shipping out gold and silver in return for spices, textiles and luxury goods.

The situation changed dramatically in the middle of the 18th century, as the Company's officials took advantage of the decline of the Mughal Empire to gain territorial control and manipulate the terms of trade in its favour. Within a few years of Clive's freak victory over the Nawab of Bengal at Plassey in 1757, the Company had managed to halt the export of bullion eastwards, creating what has poetically been called the "unrequited trade" - using the East's own resources to pay for exports back to Europe.

Beside Battersea Bridge in Chelsea, the Jacobean Crosby Hall stands newly scrubbed, a fine brickwork palace that gives little clue that it once hosted the Company during its first efforts to turn a profit. This was the copy-cat, catch-up world of 17th century England, a marginal island kingdom competing for survival against both the catholic empires of Portugal, France and Spain, and the commercial calvinism of Holland. The four small ships that set sail from Deptford in 1601 were desperate to find an English niche in this lucrative trade. And initially the voyages to the East reaped huge returns: cloves sold from the Company's third voyage made profits of 234 per cent.

But the Company progressively lost the 'spice race' in East Indies, outgunned and outclassed by the Dutch. Forced from the spice islands, the Company refocused its gaze on India, building up a string of forts along the coast, starting with Madras in 1640. Bombay followed in 1661, a wedding gift to Charles II from his Portuguese wife, Catherine of Braganza and leased to the Company by the cash-strapped king for a sizeable loan and an annual rent. Calcutta came almost thirty years later, a crucial outpost in Bengal, by far the richest region of India. In fact, India went through a boom of unparalleled proportions as the influx of silver boosted demand for textiles and other goods. And the Company's shareholders prospered too: annual dividends from the Company's monopoly control on trade with the East exceeded 25 per cent in the last years of the 17th century.

Looking at the fine lines of Crosby Hall, there is a certain symmetry between this buccaneering past and its more recent history. Originally built on Bishopsgate in the City, at the turn of the last century, a public campaign saved it from the developers and paid for its relocation to Chelsea, many miles to the West. Converted into a college, its course changed again in the 1980s after Britain's Prime Minister Margaret Thatcher's abolition of the Greater London Council and the disposal of its assets. Sold off against much community resistance, Crosby Hall was bought by a financier who had been drummed out of the insurance giant, Lloyds - itself the site for the next phase of the Honourable Company's rise.

Sitting in his airy study, Om Prakash - a professor at the Delhi School of Economics, says: "Asia played a great role in civilizing Europe." From the middle of the 17th century on, the growing influx of cottons radically improved hygiene and comfort, while tea transformed the customs and daily calendar of the people. And it was in the huge five acre warehouse complex at Cutlers Gardens that these goods were stored prior to auction at East India House. Here, over 4,000 workers sorted and guarded the Company's stocks of wondrous Indian textiles: calicoes, muslins and dungarees, ginghams, chintzes and seersuckers, taffetas, alliballlies and hum hums. Today, the Company's past at Cutlers' Gardens is marked with ceramic tiles that bear a ring of words: 'silks, skins, tea, ivory, carpets, spices, feathers, cottons'.

This lifestyle revolution was not without opposition. For hundreds of years, India had been renowned as the workshop of the world, combining great skill with phenomenally low labour costs in textile production. As the Company's imports grew, so local manufacturers in England panicked. In 1699, things came to a head and London's silk weavers rioted, storming East India House in protest at cheap imports from India. The following year, Parliament prohibited the import of all dyed and printed cloth from the East, an act to be followed 20 years later by a complete ban on the use or wearing of all printed calicoes in England. It was behind these protectionist barriers that England's mechanized textile industry was to grow and eventually crush India's handloom industry.

Standing on Leadenhall Street facing the site of East India House, it is difficult to appreciate the raw energy, envy and horror that the Company generated in 18th-century England. On auction days, the noise of 'howling and yelling' from the Sale Room could be heard on the street outside.

For 30 years after Robert Clive's victory at Plassey, East India House lay at the heart of both the economy and governance of Britain, a monstrous combination of trader, banker, conqueror and power broker. It was from here that the 24 directors guided the Company's commercial and increasingly political affairs, always with an eye to the share price: when Clive captured the French outpost of Chandernagore in Bengal in 1757, stocks rose by 12 per cent.

The booty gained by the few soldiers and officials who managed to survive the wars, disease and debauchery in India created a new class of 'nabobs' (a corruption of the hindi word nawab). Clive obtained almost a quarter of a million pounds in the wake of Plassey. Thomas Pitt, Governor of Madras earlier in the century, used his fortune to sustain the political careers of his grandson and great-grandson, both of whom became Prime Minister later. These 'nabobs' inspired deep bitterness among aristocrats angry at the way they bought their way into high society: by the 1780s, about a tenth of the seats in Parliament were held by 'nabobs'. A few lone voices - such as the Quaker William Tuke - also pointed to the humanitarian disaster that the Company had wrought in India.

All these forces converged to create a new movement to regulate the Company's affairs. In the early 1780s, a Whig alliance of Charles James Fox and Edmund Burke sought to place the Company's Indian possessions under Parliamentary rule. But their efforts were crushed by an unholy alliance of Crown and Company. George III first dismissed the government and then forced a general election, which the Company funded to the hilt, securing a compliant Parliament.

Yet the case for reform was overwhelming, and the new Prime Minister, William Pitt the Younger - that beneficiary of his great-grandfather's time in Madras - pushed through the landmark India Act of 1784. This transfered executive management of the Company's Indian affairs to a Board of Control, answerable to Parliament. In the final 70 years of its life, the Company would become less of an independent commercial venture and more a sub-contracted administrator for the British state, a Georgian example of a 'public-private partnership'.

For centuries, the City of London has ruled itself from the fine mediaeval Guildhall. It was here in 1794 that the Mayor of London made the Governor-General of Bengal, Lord Cornwallis, an Honorary Freeman of the City, awarding him a gold medal. Cornwallis had certainly earned this prize from Britain's merchant class. He had defeated Tipu Sultan of Mysore, extracting an eight- figure indemnity, and had just pushed through the 'permanent settlement' in Bengal, securing healthy tax revenues for the Company's shareholders. Seeking to increase the efficiency of tax collection in the Company's lands, Cornwallis cut through the complex existing patterns of mutual obligation and introduced an essentially English system of land tenure. At the stroke of a pen, the zamindars, a class of tax-farmers under the Mughals, were transformed into landlords. Bengal's 20 million smallholders were deprived of all hereditary rights. Two hundred years on, and after decades of land reform, the devastating effects have still to be righted in Bengal.

This 'permanent settlement' was simply a more systematic form of what had gone before. Just five years after the Company secured control over Bengal in 1765, revenues from the land tax had already tripled, beggaring the people. These conditions helped to turn one of Bengal's periodic droughts in 1769 into a full-blown famine. An estimated 10 million people died. But rather than organise relief efforts to meet their needs, the Company actually increased tax collection during the famine.

But even in good times the Company's exactions proved ruinous. The Company became feared for its brutal enforcement of its monopoly interests - particularly in the textile trade. Savage reprisals would be exacted against any weavers found selling cloth to other traders, and the Company was infamous for cutting off their thumbs to prevent them ever working again. In rural areas, almost two-thirds of a peasant's income would be devoured by land tax under the Company - compared with some 40 per cent under the Mughals. In addition, punitive rates of tax were levied on essentials such as salt.

As the Company forced salt consumption well below the minimum prescribed for prisoners in English jails, the effect was to treat the people as sub-human, a class below the criminal. And this for an institution that was starting to claim in the early 19th century that it ruled for the moral and material betterment of India.

On the other side of the river Thames from the Millennium Dome, the East India Docks stand empty of shipping. The streets of a nearby office complex echo its trading past: Clove Crescent, Nutmeg Lane, Saffron Avenue. Built in 1806, the docks were a wonder of the age. Yet, as is so often the case with monumental infrastructure, the Docks were built just as the Company's commercial days were coming to a close. Its dual role as trader and governor was viewed as increasingly anachronistic - not least by the rising free trade lobby which despised the Company's mercantilist hegemony. Eager to sell its now competitive cloth, in 1813, Britain's textile manufacturers forced the ending of the Company's monopoly of trade with India. The hammer blow came in 1834 with the final removal of all trading rights, and the Company's docks and warehouses (including those at Cutler Street) were sold off.

Technology, free trade and utilitarian ethics now came together in a powerful package to uplift the degraded people of India. This European triumphalism was codified by the father and son duo, James and John Stuart Mill, who both worked at East India House for the bulk of their careers. The removal of the Company's trading monopoly led to a rapid influx of mill-made cloth, shattering both the village economy based on an integration of agriculture and domestic spinning, and the great textile capitals of Bengal. Between 1814 and 1835, British cotton cloth exported to India rose 51 times, while imports from India fell to a quarter. During the same period, the population of Dacca shrunk from 150,000 to 20,000. Even the governor-general William Bentinck, was forced to report that "the misery hardly finds parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India."

Walk to the Foreign and Commonwealth Office from St. James Park and you will go up 'Clive's steps', named after the statue of Robert Clive that stands outside the old India Office buildings. It was here that the government transferred the administration of India in the wake of the disastrous 'mutiny' of 1857. Many explanations have been given for this uprising against Company rule in northern India, but the Company's increasing racial and administrative arrogance lay at the root.

All these sleights and apprehensions came to a head when sepoys in northern India rejected a new type of rifle cartridge said to be greased with cow and/or pig fat. What turned a mutiny into a rebellion, however, was the Company's crass behaviour towards local rulers in Oudh, Kanpur and Jhansi, who all turned against the Company as the soldiers rose. Symbolically, the first act of the mutineers at Meerut was to march the 36 miles to Delhi to claim the puppet Emperor Bahadur Shah as their leader.

The war lasted for almost two years, and was characterised by extreme savagery on both sides. Bahadur's two sons and grandson were killed in cold blood, and the old Mughal was stripped of his powers and sent into exile in Rangoon. On November 1,1858, a proclamation was read from every military cantonment in India: the East India Company was abolished and direct rule by Queen and Parliament was introduced.

The Company's legacy was quickly erased. East India House was demolished in 1861. India was no longer ruled from a City boardroom, but from the imperial elegance of Whitehall. Today, relics of Company rule can still be found in the modern Foreign Office that occupies the site. Statues of Company officials, such as Eyre Coote dressed as a Roman general, stand mute by a doorway. Spiridone Roma's grand mural, The East Offering its Riches to Britannia, brightens an otherwise dull stairwell. Originally commissioned by the Company to decorate the ceiling of the Revenue Room at East India House, the painting is an odd mixture of the classical and the exotic, the nationalistic and the commercial. A fair Britannia is offered pearls, tea, silks and spices by dark-skinned Indians. A garlanded Old Father Thames looks on, while a fully laden East Indiaman sails into the distance.