The Marathas after their victory over Nizam were also feeling emboldened. Sciendia had a powerful army which trained by Frenchman Perron. Undoubtly, the key position occupied by the French Officers in the Indian states who were a source of real danger to the English company.

Similarly Tipu Sultan had not forgotten the humiliation of which he was subjected by Lord Cornwallis when he was forced to give up half of his territory, paid huge war indemnity. He was deadly enemy of the English company. He had employed French Officers to drill his soldiers and train them. There was also danger from the Napoleon Bonaparte. He was already on his way to the East.

So political situation in India is volatile. The English company had not enough and humbles the enemies of the English company.

Subsidiary Alliance System:

One of the greatest master strokes of Lord Wellesley was the application of the system of Subsidiary alliance to large number of Indian states. It was also compared to Trojan horse tactics. It was used by Wellesley as sword to bring Indian states within the orbit of British political power.

However, subsidiary system was not the brain child of Wellesley. According to Sir Alfred Lyll, there were four stages in the evolution of the subsidiary system. To began with, the English company, contended itself with leading military contingent to help some Indian princes.

This was done by Warren Hastings when he lent resources and it was left to the intelligence, bravery and resourcefulness of Lord Wellesley to tackle the situation in a masterly manner. Wellesley had a clear vision, before him.

He wanted to make the company the supreme power in India. He gave up the policy of peace and non-intervention and inaugurated the policy of war and conquest against the Indian powers. In his forward policy he was backed by the War Ministry of England.

He adopted a very high handed and offensive attitude towards Indian rulers. He described himself as Bengal tiger and was always looking for prey. He was egoistic and held an unusually high esteem for this own view and sentiments.

Within next 7 years Lord Wellesley was able to send British troops to the Nawab of Oudh to fight against Rohillas. 2nd stage came when the English company took the field on its own account.

It was usually assisted by the army of some Indian prince who was not strong enough to do the Job single-handed. In the third stage, the English company asked the ruler of the state to give money so that troops might be maintained for the defence of the state such a treaty was made by Sir John Shore with the Nawab of Oudh in 1797.

The Nawab promised to pay a sum of Rs. 76 lakhs a year. A similar treaty was made with Nizam by Lord Wellesley. The final stage was next logical step. The company undertook to defend the territories of an Indian ally and for that purpose stationed a subsidiary force in the territories of the state.

The Indian ally was asked not to pay money but surrender territory from the revenue of which the expenses of the subsidiary force were to be met. A similar treaty was made with the Nizam.

According to the subsidiary system, any ruler who entered into a subsidiary alliance, was to give money or some territory to the

English company for the maintenance of a contingent force. In addition to that, he was also to agree to deal with foreign states only through the English company. If the ruler has any dispute with any other state, he was to make the company his arbitration.

The ruler cannot employ any non-English Europeans in army and civil administration. The English company under took to safeguard internal strife and external invasion. It is clear that the subsidiary state surrender the sovereignty in the name of British protection.


1. It enhanced company’s power and resources:

The subsidiary system added to the resources of the English company and it was partly with the help of these resources that the English company was to able to establish itself as the paramount power in the country.

The Indian states entering into the alliance gave money or territories out of whose revenue troops could be maintained by the English company. The result was although outwardly the troops were maintained with the money of the Indian states for their defence actually they added to the resources of the English company.

2. It increased the Political influence of the company in the states where their forces were stationed:

Such alliances increased the political influence of the company in the state concerned. Without having to shoulder the burden of administration this system increased the political influence of the Company.

3. Disturbances were removed far away from the frontiers of the Company:

The system of subsidiary alliances enabled the English Company to throw forward their military frontier in advance of their political frontier. The evils of war kept at a distance from the territories of the English Company.

4. It allayed the jealousy of other European nations:

Though the independence of the states which joined subsidiary alliance had been snatched away yet another cover of independence of the native state was maintained so as to allay the jealousy of other European nations.

5. It enabled the English Company to remove French influence from the native Courts:

The English Company was able to exclude the influence of the French from the Indian states. Whenever a state entered into a subsidiary alliance the ruler had to drive out all Europeans who were not Englishmen.


1. It ended the independent existence of native rulers:

The foreign policy of the native state joining the alliance was controlled by the English Company. The British resident interfered in the internal affairs of the state.

2. The neglect of welfare of the people by the ruler:

The native rulers became careless and indifferent to the welfare of the people. They became lax and criminally neglectful of their duties.

3. Misgovernment led to annexation on a large scale:

These native rulers became careless and neglectful. This let to mismanagement. The English ultimately annexed such territories on the excuse of mismanagement.

4. It produced decay in states:

The subsidiary system resulted in the internal decay of the protected states. It destroyed the initiative of the ruling princes. It made them dependent of the English company.

The result was the Indian princes led lives of vice and corruption on account of the assurance that the English company was always there to help them in times of trouble. The people of the states were deprived of the natural remedy of revolution. They had no chance of success even if they dared to revolt against their corrupt ruler.

5. It created jealousy in the native powers against the company:

The plan of commending subsidiary for territorial revenue had been disapproved by the court of Directors because it created jealousy in the native power against the company.

6. It marred the initiative of the rulers and made them careless:

Since the foreign policy of the state was controlled by the company the rulers of the state lost all initiative.

Application of the System:


Wellesley got a pretext for making his interference in the state of Tanjore at the time when there was a war of succession going on between rival claimants on the death of the late Raja of Tanjore. Wellseley induced the Raja of Tanjore Sarfauji to inter into subsidiary alliance with the company.

Consequently a subsidiary treaty was concluded between the two parties, according to which the Raja handed over the whole of the civil and military administration to the English, keeping only a small territory at Tanjore and the roundabout region under him for his own administration.

The company compensated him for this loss by a grant of ? 40,000 annually as pension to the Raja. On the death of Sarfauji in 1823, his only son Shivaji succeeded hiruat the gaddi. On his having died issueless, Tanjore was annexed permanently to the British dominions in India.


The state of Surat also suffered the same fate. From the year 1759, the civil administration was in the hands of its ruler and its independence was entrusted by the Mughal Emperor to the East India Company. But the Nawab of Surat could not pay the whole amount to the company for the maintenance of the native army.

Thus, when the Nawab died in 1799, Wellesley finished the double government, which was in vogue in the state of Surat. In March 1800 Welleslely forced the rightful successor of the late Nawab to hand over the entire administration of the country to the East India Company.

Consequently, the Nawab was pensioned off and the whole administration of the state fell into the hands of the East India Company. In this connection Mill says, “It was the most unceremonious act of dethronement, which the English had yet performed as the victim was the weakest and most obscure.” Beveridge also says, “The whole proceeding was characterised by tyranny and injustice.”


After his defeat in the battle of Khardla at the hands of the Marathas, the Nizam had turned an enemy of the East India Company because he had received no support from the company as stipulated in one of the terms of their mutual treaty concluded in the year 1790. But Wellesley was wise enough to prevail upon him and bring him round to his own views.

Consequently, he started negotiations with the Nizam to bring him into the system of Subsidiary Alliance. Hence, the first Subsidiary Treaty was concluded between the Nizam and the company in the year 1798.

According to one of the provisions of this treaty, the subsidy force was stationed in Hyderabad, consisting of six platoons, and the Nawab promised to pay 2, 14,700 rupees annually in the form of subsidy.

All the French companies were disbanded and all other Europeans excepting’the English were expelled from Hyderabad. It was also decided that hence forward the foreign policy of Hyderabad state would completely rest with the East India Company and that in the quarrels of the Nizam with Marathas the East India Company would always oct as an arbitrator and in case the Marathas did not accept their arbitration the company would come forward to help the Nizam against the aggressive and unjust demands of the Marathas Peshwa on the Nizam.


In case of Oudh, bad administration was the pretext for Wellesley’s interference. He aimed at encircling the Nawab Wazir with British dominions, so that he could not contact either the Afghans or the Marathas.

By making the subsidiary force independent of the Wazir, by annexing territory, and lastly, by reducing the Nawab’s military strength by disbanding his troops. As he could not charge the Nawab with treachery, he used bad administration and the rumour of Zaman Shah Invasion as a pretest for carrying out his policy. Zaman Shah was the ruler of Afghanistan who was credited with the intention of invading India. The Nawab resisted the Governor-General but in vain.

The Nawab refused to accept this and at the same time offered to abdicate his throne. But when Wellesley felt inclined to accept the Nawab’s offer of abdication, the Nawab withdrew his offer of abdication.

He told Wellesley that he was prepared to abdicate throne if the Governor-General assured him that he would accept and recognise his son as the future Nawab of Oudh. The Governor- General was beyond himself with rage and expressed a great resentment and hatred for the Nawab on this duplicity and deciet.

Now the Governor-General prepared another draft of a fresh treaty to be signed by the Nawab. According, to this treaty, it was stipulated to enhance the number of British troops and also to increase the amount of subsidy that the Nawab was required to pay to the company.

The Nawab was forced to accept on 19th November, 1801, the terms as laid down in the draft of the new treaty. According to the terms of the treaty, the Nawab had to part with Gorakhpur Rohillakhand and the country lying between the Jamuna and the Ganges to the company, which amounted to one-half of his territory of Oudh. In this way, the state of Oudh became encircled with that of the company’s territory in the Northern India.

In 1798, when Wellesley came to India the company was one of the strong powers in India but by the time he left India in 1805, the company had become the strongest power in India.

During this period the influence of the French at the courts of the native rulers was wiped away for ever; the arch-enemy of the company Tipu was killed, most of his territories was occupied and the rest of it was handed over to the descendants of the Hindu ruler.

Wellesley converted the British Empire in India to British Empire of India. It has also been said that Clive founded the British Empire in India, Warren Hastings strengthened the foundations, Cornwallis began to erect the superstructure, Lord Wellesley completed it and finishing touches were given by later Governor-General. Thus Wellesley was certainly one of the empire builders in India.