French East India Company The French East India Company ( ) was a commercial enterprise , founded in 1664 to compete with the British and Dutch East India companies in the East Indies . Planned by Jean - Baptiste Colbert , it was chartered by King Louis XIV for the purpose of trading in the Eastern Hemisphere . It resulted from the fusion of three earlier companies , the 1660 Compagnie de Chine , the Compagnie d ' Orient and Compagnie de Madagascar . The first Director General for the Company was De Faye , who was adjoined two Directors belonging to the two most successful trading organizations at that time : François Caron , who had spent 30 years working for the Dutch East India Company , including more than 20 years in Japan , and Marcara Avanchintz , a trader from Ispahan , Persia . History . French king Henry IV authorized the first " Compagnie des Indes Orientales " , granting the firm a 15 - year monopoly of the Indies trade . This precursor to Colbert ' s later " Compagnie des Indes Orientales " , however , was not a joint - stock corporation , and was funded by the Crown . The initial capital of the revamped " Compagnie des Indes Orientales " was 15 million livres , divided into shares of 1000 livres apiece . Louis XIV funded the first 3 million livres of investment , against which losses in the first 10 years were to be charged . The initial stock offering quickly sold out , as courtiers of Louis XIV recognized that it was in their interests to support the King ’ s overseas initiative . The " Compagnie des Indes Orientales " was granted a 50 - year monopoly on French trade in the Indian and Pacific Oceans , a region stretching from the Cape of Good Hope to the Straits of Magellan . The French monarch also granted the Company a concession in perpetuity for the island of Madagascar , as well as any other territories it could conquer . The Company failed to found a successful colony on Madagascar , but was able to establish ports on the nearby islands of Bourbon and Île - de - France ( today ' s Réunion and Mauritius ) . By 1719 , it had established itself in India , but the firm was near bankruptcy . In the same year the " Compagnie des Indes Orientales " was combined under the direction of John Law with other French trading companies to form the " Compagnie Perpétuelle des Indes ) " . The reorganized corporation resumed its operating independence in 1723 . With the decline of the Mughal Empire , the French decided to intervene in Indian political affairs to protect their interests , notably by forging alliances with local rulers in south India . From 1741 the French under Joseph François Dupleix pursued an aggressive policy against both the Indians and the British until they ultimately were defeated by Robert Clive . Several Indian trading ports , including Pondichéry and Chandernagore , remained under French control until 1954 . The Company was not able to maintain itself financially , and it was abolished in 1769 , about 20 years before the French Revolution . King Louis XVI issued a 1769 edict that required the Company to transfer to the state all its properties , assets and rights , which were valued at 30 million livres . The King agreed to pay all of the Company ’ s debts and obligations , though holders of Company stock and notes received only an estimated 15 percent of the face value of their investments by the end of corporate liquidation in 1790 . The company was reconstituted in 1785 and issued 40 , 000 shares of stock priced at 1 , 000 livres apiece . It was given monopoly on all trade with countries beyond the Cape of Good Hope for an agreed period of seven years . The agreement , however , did not anticipate the French Revolution , and on 3 April 1790 the monopoly was abolished by an act of the new French Assembly which enthusiastically declared that the lucrative Far Eastern trade would henceforth be " thrown open to all Frenchmen " . The company , accustomed neither to competition nor official disfavor , fell into steady decline and was finally liquidated in 1794 . Liquidation scandal . Even as the company was headed consciously toward extinction , it became embroiled in its most infamous scandal . The Committee of Public Safety had banned all joint - stock companies on 24 August 1793 , and specifically seized the assets and papers of the East India Company . While its liquidation proceedings were being set up , directors of the company bribed various senior state officials to allow the company to carry out its own liquidation , rather than be supervised by the government . When this became known the following year , the resulting scandal led to the execution of key Montagnard deputies like Fabre d ' Eglantine and Joseph Delaunay , among others . The infighting sparked by the episode also brought down Georges Danton and can be said to have led to the downfall of the Montagnards as a whole .