The fall of the Safavid Dynasty in 1722, the Afghan occupation, and subsequent anarchy naturally depressed trade throughout Persia. With the accession of Nāder Shah in 1736, attempts were made by agents of the British “Russia Company” to expand their trade across the Caspian Sea to northern Persia with Nāder’s support, but Russian opposition forced the end of this venture by 1746 (see ELTON). The East India Company maintained its factories in Kermān and Isfahan throughout Nāder’s reign, but a renewal of civil war after his assassination in 1747—and lack of encouragement by Nāder’s immediate successors—persuaded them to withdraw from Isfahan to Bandar(-e) ʿAbbās in 1750. A representative stayed at Kermān until 1758, and an Armenian interpreter into the 1760s. In 1763 their last outpost in Persia, at Bandar(-e) ʿAbbās, was evacuated (after a bloody skirmish with the khan of Lār) to Baṣra, in the Ottoman domains, where the company was already represented. Within a few months, however, Shaikh Nāṣer b. Maḏkūr of Būšehr invited them to set up an agency at his port, strategically located in respect of Shiraz, which was now in effect the capital of the new ruler of western Persia, Karīm Khan Zand. In July a commercial treaty was concluded with Karīm’s brother and viceroy Ṣādeq, and trade initially prospered: during 1763-67 more than half of the company’s sale of woolens in the Persian Gulf (annually averaging 1,407 bales) went through Būšehr (Amin, pp. 50, 73-75, 79, 82, 151, 155; Perry, pp. 256-60).

The Zand ruler, however, expected in the bargain that the company’s ships would aid him in operations against rival Arab polities on the Persian coast, which the Bombay presidency, concerned for the company’s neutrality, refused to sanction. The new agent at Baṣra, Henry Moore, was resolutely opposed to negotiating with Karīm Khan, and within three years relations with Shiraz were at a breaking point. There are garbled allusions to these events in the Persian chronicles: in the Golšan-e morād, the company’s envoy George Skipp is misidentified as a Russian ambassador (Ḡaffāri, pp. 286-87 and note 143; Perry, pp. 261-62, 305) and in the Rostam al-tawārikò, Skipp’s visits to Shiraz in 1767 and 1768 are conflated with the episode of the expulsion of the Dutch from Ḵārg island in 1766 (Rostam-al-Ḥokamāʾ, pp. 386-90, tr. Hoffmann, pt. 2, pp. 236ff.; Perry, p. 267 note 96). In 1769 Moore attempted to seize Ḵārg island, but was forestalled by a landing by Karīm Khan’s troops; fearing reprisals, the factors at Būšehr hastily withdrew to Baṣra. Despite misgivings by the presidency and repeated feelers from Shaikh Nāṣer, they were not to return until 1775.

An epidemic that struck Baṣra in 1773, and the siege and occupation by Zand forces in 1775-76, crippled the city economically and twice forced the temporary evacuation of the agency to Bombay. A company ship was captured by boats from Bandar(-e) Rīg, and two company employees on board were sent to Shiraz to serve for two years as hostages for the resumption of trade at Būšehr. This Moore refused to countenance, but was finally overridden by the presidency; in April 1775 the company’s ship and personnel were restored by Karīm Khan, and its flag was once more hoisted at Būšehr (Perry, pp. 261-67).

However, trade had slumped considerably since the occupation of Baṣra, and with the anarchy that ensued on the death of Karīm Khan in 1779 it was not to revive for decades. Both Baṣra and Būšehr were downgraded to the status of company residencies and, with the threat of renewed war with France, were maintained more as communications links with India than for their waning commercial value. As the company’s fortunes elevated it to the very government of India, involving it in a closer relationship with the British government, so its interest in Persia and the Persian Gulf declined. In 1789 Bombay sent a Persian, Mahdī-Qolī Khan, as resident at Būšehr, as much for political as for commercial advantages, i. e., to incline Fatḥ-ʿAlī Shah to the British, rather than the French, cause. In 1800 and again in 1810, the governor general at Bombay dispatched Sir John Malcolm with a flotilla to the Persian Gulf as envoy to the Qajar monarch; but Whitehall’s appointment of Sir Harford Jones as ambassador formalized direct diplomatic relations between London and Tehran, and the company’s role in Persia was virtually ended (see BRYDGES).

Even in India, the company’s trading monopoly was abolished in 1813, and by the 1850s it was little more than a managing agency for the British government’s administration of India. After the Indian mutiny in 1857, for which the company was held partly to blame, it was liquidated and its assets transferred to the crown on 2 August 1858.

The meticulous records and letters of the company’s employees provide a valuable source for the history of Persia during the 17th and 18th centuries. They are preserved in the India Office Library in London, under the headings Persia and the Persian Gulf Records and Bombay Public Consultations (or Proceedings); in the National Archives of India at New Delhi; and in the Maharashtra State Archives, Bombay (Basra and Gombroon factory diaries). Particulars are to be found in Abdullah Thabit, Amin, and Perry.