Factory  a business centre and warehouse of European maritime companies in Bengal wherefrom they used to conduct their trade and commerce in the 'East Indies'. It was a warehouse where the incoming cargo was stored for marketing. The cargo for export were also gathered and processed there. It was also the residence of the European officials of the particular company. For managing the affairs of the factory there was a council of merchants, the chief of which was called the Factor. The Factor was responsible for receiving and selling the incoming cargoes and procuring and processing the export items. The factor advanced money to the local banians and gomastas who, in turn, advanced it to local producers and paikars.

The process was called Investment. Thus both these words, factory and investment, belong to the jargons of the European maritime activities in India, and are therefore not comparable to the two terms as we understand them today. The earliest factory of the English east india company was set up at Ballasore in 1651. This was followed by factories at Hughli, Patna, Dhaka, Kasimbazar and Calcutta. All these factories had numerous dependent factories under their jurisdiction. The English had their regional headquarters at hughli, but it was later transferred to Calcutta. chandannagar was the headquarters of the French, chinsura of the Dutch and serampore of the Danes. These were settlements of the Europeans for the purpose of trade and commerce. They obtained sanads from the Mughal government in lieu of nazars, Peshkash and regular customs and rents. The sanads defined the terms and conditions of the settlement right. In reality, all these settlements gradually became the exclusive preserves of the respective companies. [Sirajul Islam]