Portuguese India was founded six years after the discovery of of a sea route between Portugal and the Indian Subcontinent to serve as the governing body of a string of Portuguese fortresses and colonies overseas. After 1510, the capital of the Portuguese viceroyalty was transferred to Goa. Until the 18th century, the Portuguese governor in Goa had authority over all Portuguese possessions in the Indian Ocean. This inaugurated a new chapter in Indian history.

The first Portuguese, Vasco da Gama sailed to Calicut on the Malabar Coast on 20th May 1498. This event was considered to be a landmark in maritime history. Other European trade communities followed the Portugal expedition and soon Indian coastal trade was monopolized by European traders.

The European merchants of this era had political support. The government was backed by a strong military which was not the case with earlier traders. Traders of this era expedited in groups, represented their countries and were stronger than medieval or ancient period merchants. In order to immune themselves from local rulers, they fortified their factories. They understood local rulers are dwindling and considered it as an opportunity for expanding territories. Europeans traders came in India as exporters but gradually turned into importers of industrially manufactured goods.

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