The correct option is A Both statements are correct and statement 2 is the correct justification of statement 1.
During the 18th century, the British were still traders. They had not established power and relied on the kings' concessions to maintain their trading posts. They managed to gain the trust of Indian merchants who sold textiles and other goods. The company made huge profits by selling Indian cotton textiles, silks, and printed cloth in England and other parts of Europe, to China and Japan, and Burma and Arabia, and Persia and parts of Africa.