Company’s Struggle for Equality with Indian States from a Position of Subordination (1740-1765): Starting with Anglo-French rivalry with the coming of Dupleix in 1751, the East India Company asserted political identity with capture of Arcot (1751). With the Battle of Plassey in 1757, the East India Company acquired political power next only to the Bengal Nawabs. In 1765 with the acquisition of the Diwani of Bengal, Bihar and Orissa, the East India Company became a significant political power.
Policy of Ring Fence (1765-1813): This policy was refl ected in Warren Hastings’ wars against the Marathas and Mysore, and aimed at creating buff er zones to defend the Company’s frontiers. The main threat was from the Marathas and Afghan invaders (the Company undertook to organise Awadh’s defence to safeguard Bengal’s security).Wellesley’s policy of subsidiary alliance was an extension of ring fence—which sought to reduce states to a position of dependence on British Government in India. Major powers such as Hyderabad, Awadh and the Marathas accepted subsidiary alliance. Thus, British supremacy was established.
Policy of Subordinate Isolation (1813- 1857): Now, the imperial idea grew and the theory of Paramountcy began to develop—Indian states were supposed to act in subordinate cooperation with the British Government and acknowledge its supremacy. States surrendered all forms of external sovereignty and retained full sovereignty in internal administration. British Residents were transformed from diplomatic agents of a foreign power to executive and controlling officers of a superior government. In 1833, the Charter Actended the Company’s commercial functions while it retained political functions. It adopted the practice of insisting on prior approval/ sanction for all matters of succession. In 1834, the Board of Directors issued guidelines to annex states wherever and whenever possible. This policy of annexation culminated in usurpation of six states by Dalhousie including some big states such as Satara and Nagpur.
Policy of Subordinate Union (1857- 1935): The year 1858 saw the assumption of direct responsibility by the Crown. Because of the states’ loyalty during the 1857 revolt and their potential use as breakwaters in political storms of the future, the policy of annexation was abandoned. The new policy was to punish or depose but not to annex. Now the ruler inherited the gaddi not as a matter of right but as a gift from the paramount power, because the fi ction of Indian states standing in a status of equality with the Crown as independent, sovereign states ended with the Queen adopting the title of “Kaiser-i-Hind” (Queen Empress of India). The paramount supremacy of the Crown presupposed and implied the subordination of states. The British Government exercised the right to interfere in the internal spheres of states— partly in the interest of the princes, partly in the interest of people’s welfare, partly to secure proper conditions for British subjects and foreigners and partly in the interest of the whole of India.