Bombay soon developed as a trading port thanks to its fine harbour and the number of merchants who were attracted from other parts of India by the British promise of religious freedom and land grants. Migrants included sizeable communities of Parsis and Gujaratis, and south Indian Hindus fleeing Portuguese persecution in Goa. Their arrival, and that of later immigrant groups, laid the basis for Bombay's celebrated multicultural society. Within 20 years, the presidency of the East India Company was transferred to Bombay from Surat, and the town soon became the trading headquarters for the whole west coast of India.

Bombay's fort was built in the 1720s, and soon after land reclamation projects began the century-long process of joining the seven islands into a single land mass. Although Bombay grew steadily during the 18th century, it remained isolated from its hinterland until the British defeated the Marathas and annexed substantial portions of Western India in 1818. Growth was spurred by the arrival of steam ships and the construction of the first railway in Asia from Bombay to Thana in 1853. Cotton mills were built in the city the following year, and the American Civil War - which temporarily dried up Britain's supply of cotton - sparked Bombay's cotton boom. The fort walls were dismantled in 1864 and the city embarked on a major building spree as it sought to construct a civic townscape commensurate with its new found wealth. The opening of the Suez Canal in 1869 and the massive expansion of Bombay's docks cemented the city's future as India's primary port.

Modern History
Bombay played a formative role in the struggle for Independence, hosting the first Indian National Congress in 1885 and the launch of the 'Quit India' campaign in 1942. After Independence the city became capital of the Bombay Presidency but this was divided on linguistic grounds into Maharashtra and Gujarat in 1960. Since then, the huge number of rural (especially Maharashtran) migrants attracted by Bombay's commercial success has strained the city's infrastructure and altered its demographics. It gave rise to a pro-Marathi right-wing regionalist movement, spearheaded by the Shiv Sena municipal government, which shook the city's multicultural foundations by discriminating against non-Maharashtrans and Muslims. This increased communalist tensions, which erupted in murderous post-Ayodhya riots in 1992 and was followed by 13 bomb blasts that ripped through the city on a single day in March 1993. Shiv Sainaks were implicated in the former while the city's mafia got blamed for the latter - though the dividing line between the political establishment and organised crime has been hard to pinpoint.

In 1996 the Shiv Sena officially renamed the city Mumbai. The change of name led to linguistic confusion, and signalled the intention of the Maharashtra state government to assert the city's Marathi identity, despite the strength and success of its multicultural foundations. The Shiv Sena and their leader, Bal Thackeray (noted for his stated admiration of Adolf Hitler), ruled the state of Maharashtra behind the scenes until October 1999, when the administration that had protected them lost to the Congress Party in assembly elections. Attempts by the state's new political leaders to prosecute Thackeray in July 2000 for his alleged involvement in the 1992 anti-Muslim riots led to his supporters effectively shutting Mumbai down for several days through violent protests - the charges against this still influential person were then quickly withdrawn.