A subsidiary alliance, in South Asian history, was a tributary alliance between an Indian state and a European East India Company. The system of subsidiary alliances was pioneered by the French East India Company governor Joseph François Dupleix, who in the late 1740s established treaties with the Nizam of Hyderabad, India, and other Indian princes in the Carnatic.
it stated that the indian rulers who formed a treaty with the british would be provided with protection against any external attacks in place that the rulers were (a) required to keep the british army at the capitals of their states (b)they were either to give either money or some territory to the company for the maintenance of the british troops (c) they were to turn out from their states all non-english europeans whether they were employed in the army or in the civil service and (d)they had to keep a british official called 'resident' at the capital of their respective states who would oversee all the negotiations and talks with the other states which meant that the rulers were to have no direct correspondence or relations with the other states .
The method was subsequently adopted by the British East India Company, with Robert Clive negotiating a series of conditions with Mir Jafar following his victory in the 1757 Battle of Plassey, and subsequently those in the 1765 Treaty of Allahabad, as a result of the company's success in the 1764 Battle of Buxar. A successor of Clive, Richard Wellesley initially took a non-interventionist policy towards the various Indian states which were allied to the British East India Company, but later adopted, and refined the policy of forming subsidiary alliances. The purpose and ambition of this change are stated in his February 1804 dispatch to the East India Company Resident in Hyderabad:
His Excellency the Governor-General's policy in establishing subsidiary alliances with the principal states of India is to place those states in such a degree of dependence on the British power as may deprive them of the means of prosecuting any measures or of forming any confederacy hazardous to the security of the British empire, and may enable us to reserve the tranquility of India by exercising a general control over those states, calculated to prevent the operation of that restless spirit of ambition and violence which is the characteristic of every Asiatic government, and which from the earliest period of Eastern history has rendered the peninsula of India the scene of perpetual warfare, turbulence and disorder...
Richard Wellesley, 4th February 1804
In a Subsidiary Alliance, princely rulers were forbidden from making any negotiations and treaty with any other Indian ruler without first making inquiries to Company officials. They were also forbidden from maintaining any standing armies. They were instead to be protected by the troops of the European companies, paying for their upkeep.
By the late 18th century, the power of the Maratha Empire had weakened and the Indian subcontinent was left with a great number of states, most small and weak. Many rulers accepted the offer of protection by Wellesley, as it gave them security against attack by their neighbors.
Indian rulers under British protection surrendered the control of their foreign affairs to the British East India Company. Most subordinate disbanded their native armies and instead maintained British troops within their states to protect them from attack, but that became increasingly unlikely in most parts of India as British power was consolidated.
The kingdom of Awadh was the first to enter an alliance like this through Treaty of Allahabad (1765), after its defeat in Battle of Buxar (1764). Though annexation of Awadh was done on the basis of maladministration and hence is not counted under the subsidiary alliances. Tipu Sultan of the Kingdom of Mysore refrained from doing so, but after the British victory in the Fourth Anglo-Mysore War in 1799, Mysore became a subsidiary state before coming under Company rule.
The Nizam of Hyderabad was the first to accept a well-framed subsidiary alliance in 1798. After the Third Anglo-Maratha War (1817–19), Maratha ruler Baji Rao II also accepted a subsidiary alliance.
Other states Tanjore/Mysore (1799), Awadh (1801), Peshwa (1802), Bhonsle (1803), Scindia (1804), Singrauli (1814), Jaipur Jodpur(1818) accepted this alliance.
The Holkar State of Indore was the last Maratha confederation to accept the Subsidiary Alliance in 1818.