<P> 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 . </P> <P> 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 . </P> <P> 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 . </P> <P> 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 . </P>

Where did the french east india company first established its factory in india