History ch 2 - Europe and India — History & Civics STD 8 — Question

Many traders participated in the competition for trade with Asia after the discovery of the new sea routes to the east.
As it was not possible to carry out trade single-handedly, it was decided by the traders to pool their resources to raise capital for trade.
Many trading companies like the East India Company were formed.
Trade with Oriental countries was very profitable and responsible for economic prosperity.
The ruling powers gave protection and trade concessions to these companies.
This led to the accumulation of wealth in Europe. This wealth was used as capital for trade and commerce which gave rise to capitalism in Europe.