Subsidiary Alliance System Modern History Notes for UPSC

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The Subsidiary Alliance system was an agreement between the British and Indian rulers in which the Indian rulers would receive protection from the British in exchange for giving them control over their internal affairs. The system allowed the British to maintain control over large parts of India while avoiding the costs of directly governing those areas. The purpose of this article is to give us an understanding of the features, merits and demerits of the subsidiary alliance system with an emphasis on the UPSC and other examinations in mind.

Subsidiary Alliance system – Introduction

In order for the English to gain supremacy on the Indian subcontinent, Lord Wellesley implemented the Subsidiary Alliance policy. However, it is not clear whether it was his idea in the first place. According to M.S. Ranade, Shivaji first initiated this policy. He obtained Chauth and Sardesh Mukhi from the rules of South India, just like the Subsidiary Alliance.

The practice was first devised by the French Governor Dupleix, who offered military support in exchange for money to native rulers. As well as adopting this practice, the English also used it as a means of strengthening the company’s political influence, from Clive to Wellesley. This system went through several stages of development over time.

Provisions of Subsidiary Alliance

The native Indian princes who accepted this treaty also recognized British supremacy, a provision that would have rendered the treaty meaningless in the absence of it.

Following the signing of the treaty, the Indian Princes were prohibited from entering into any kind of alliance with any other power without the permission of the English. Moreover, they could not appoint any other European to any post in their states.

As a result of this treaty, every ruler in India had to keep an English army in their territory to assist them. Even though the army was of the English, the Indian rulers borne all its expenses. When that ruler couldn’t afford to pay for the army’s maintenance in cash, he had to surrender a portion of his territory to the British Company.

As well as keeping an army, the Indian Prince was also to have a Resident Englishman in his Court. He was to consult him on both internal and external administrative matters.

Its responsibility was to protect the state against internal revolts and external attacks in return.

Indian rulers were assured that the Company would never interfere with their internal affairs.

The English gained much from the native rulers under the subsidy system. Those rulers who accepted it became dependent, kind of like a salve to the British Government. However, they had to face a number of hardships in the long run. As a matter of fact, the alliance not only ended their freedom and liberty, but also proved a curse upon them.

Various Stages of Subsidiary Alliances

First stage of Subsidiary Alliance

In its first stage, the Company provided troops to friendly native rulers and received some money in exchange for them. Lord Warren Hastings did the same by lending troops to the Nawab of Oudh to fight the Rohillas. The Nizam of Hyderabad signed a treaty of this kind with the English in 1768 AD.

Second stage of Subsidiary Alliance

As part of the second phase, the English agreed to maintain a fixed and permanent military force for the benefit of a native prince. This force was not based on the Company’s territory.

Third stage of Subsidiary Alliances

For the third stage, the English agreed to maintain a fixed force to aid the native prince. Sir John Shore signed such a treaty with the Nawab of Oudh in 1797. The Nawab agreed to pay Rs. 76 lakhs annually in order to keep British forces in his territory. The Company received some fixed amount of money annually and kept the forces within the territory of the native prince.

Fourth stage of Subsidiary Alliances

The fourth and final stage was when the English agreed to maintain a permanent and fixed subsidiary force within the territory of the native prince. Rather than accepting money for maintaining these forces, the Company insisted on securing some territories. The Company was able to occupy certain strategic places and permanently reduce the strength of the native prince by maintaining subsidiary forces with regular, fixed income.

Subsidiary Alliances in Practice

In 1798, to stop the Marathas and Tipu Sultan attacks, the Nizam of Hyderabad accepted this.

Wellesley and the Nawab of Oudh formed such an alliance in 1798, and the former received Rohilakhand for maintaining the cost of these forces.

Following the Fourth Mysore War (1799), Krishna Rao accepted the subsidiary system.

In 1802, when Peshwa Baji Rao II was defeated by HoIkar, he signed the Treaty of Bassein with the English.

After Second Maratha war Scindia and Bhonsle (in 1803) accepted the system and the same was also accepted by Gaekwad of Baroda (1803).

Merits of Subsidiary Alliance

As a result, the company was able to boost the government’s resources and allow the queen to establish her supremacy over the native rulers. The Company also provided security to the native rulers who accepted the dominion of the queen.

The native rulers had to pay for the British army to remain in India.

Company forces encamped in native states, so there was no fear of native rulers revolting. This alliance system kept the Company’s empire from external invasions.

Due to the Company’s responsibility of solving the native rulers’ problems, the mutual differences among them ended automatically, and the native rulers’ existence depended on the mercy of the English.

The Company began to influence some internal affairs of the native rulers as the British residents lived in the native rulers’ courts. This prevented the native rulers from acting against the English’s will.

The English agreed not to interfere in the internal affairs of the native rulers under this system, so they did not offend any European power.

A major benefit of the treaty was that no war was fought on English soil, which prevented dangerous consequences.

Due to the high expenses of maintaining the subsidiary force, the native rulers were compelled to surrender some territory to the English in lieu of paying for it.

With the subsidiary alliance, the French influence on the native rulers was ended. Only the English were allowed to be employed. This protected the native rulers from the French conspiracies.

The Company was freed from fear of invasion by this alliance, which established its rule over native rulers.

Native rulers did not join any organizations against the English, which helped them extend their empire.

Demerits of the Subsidiary Alliance

A gradual bondage of slavery gradually entrapped the native rulers. This hurt their independence.

Those who accepted the alliance were forced out of their jobs and resorted to theft and robbery. Some of these soldiers joined the Pindaris and caused trouble for the natives.

There was no right for the English residents appointed in the kingdoms of native rulers to interfere with their internal affairs, but they never really followed this condition. As a result, the rulers lost their self-confidence and became disinterested in government.

In response to the English taking responsibility for the safety of the native rulers from internal revolts and foreign invasions, the native rulers became lazy and inactive.

Several parts of the East India Company’s kingdoms were annexed as well, accusing the native rulers of corruption and maladministration.

The native rulers lost their national identity, responsibility towards the kingdom, courage, and military organization.

In order to please the English and save their empire, the native rulers became cruel and harassed their people to gain more and more money.

The native rulers gradually became completely dependent on the English as a result of this alliance, and they began to think of them as all in all. They not only became the supporters of the English but also created hindrances in the way of the national freedom movement of India.

In the course of time, native rulers lost most of their fertile lands and important territories to the English. As a result, this treaty was very damaging from the point of view of the Indians. Sooner or later, the native rulers became rubber stamps for the English government.


There is no doubt that Lord Wellesley’s Subsidiary Alliance was a great diplomatic success, and he trapped almost all the powerful native rulers in this web, but they were too late to repair the damage. By introducing the subsidiary alliance system introduced by Lord Wellesley, the Company gained a lot of financial resources as well as territories, and over time the Company annexed all of the territories that it gained through alliances. However, Indian princes were adversely affected as they became dependent on the Company on the one hand and lethargic and corrupt on the other hand. They neglected administration and could not engage their people in welfare activities.

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