The Dutch gained control of the Indian Ocean trade by creating a network of fortified posts that stretched from the Netherlands to the Horn of Africa, and further to the continent of India. The Dutch used these forts to protect shipping and monopolize the nutmeg and cinnamon trade.
Dutch merchants and investors established the Dutch East India Company in 1602 to create a Dutch colonial empire, and to assist in the national effort of independence from the Hapsburg Dynasty. The company acted as a representative of the Dutch government in India and Asia. Investors used their own capital to pay for merchant shipping and create a military.
Starting in 1610, the Dutch East India Company used its naval fleets and armies to gain footholds in the Indian Ocean. By 1641, they had gained control of the major Portuguese Fortresses and conquered the Island of Ceylon. The company used these strongholds as warehouses for trade goods, and as logistical points to maximize efficient use of dominant winds.
After revolutionizing the organization of the Indian Ocean trade system, and monopolizing the spice trade, by 1720 the Dutch East India Company’s influence in Asia began to decline. The English East India Company gained a large portion of Dutch power, and used it to build the British Empire.