GS Notes

Modern Indian History Notes 13

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The Treaty of Allahabad (1765)

The Treaty of Allahabad refers to two separate agreements signed on 12th and 16th August 1765, following the decisive victory of the English East India Company (EIC) at the Battle of Buxar (1764). The treaty was negotiated by Robert Clive on behalf of the EIC with the Mughal Emperor Shah Alam II and Shuja-ud-Daulah, the Nawab of Awadh. This treaty is a landmark event, as it formally established the EIC as a political power in India, laying the legal groundwork for British rule.

Provisions and Impact on Bengal:

  • Grant of Diwani: The first treaty, signed with Mughal Emperor Shah Alam II, granted the EIC the Diwani rights—the authority to collect revenues and administer civil justice—for the provinces of Bengal, Bihar, and Orissa. In return, the EIC agreed to pay the Emperor an annual tribute of 26 lakh rupees and cede the districts of Kora and Allahabad to him.
  • Establishment of Dual Government (1765-1772):
    • This grant of Diwani led to the establishment of a “Dual System of Government” or Dyarchy in Bengal. Under this arrangement, the EIC held the real power through its control over revenue (Diwani), while the administrative and judicial responsibilities (Nizamat) theoretically remained with the Nawab of Bengal, Najm-ud-Daulah.
    • In practice, this created a system of ‘power without responsibility’. The EIC controlled the finances but was not directly accountable for governance. The Nawab, conversely, had the responsibility for administration but lacked the financial resources or military power to enforce it effectively.
    • To manage the revenue collection, the EIC appointed two Indian Deputy Diwans: Mohammad Reza Khan for Bengal and Raja Shitab Rai for Bihar. Significantly, Mohammad Reza Khan was also appointed as the Deputy Subadar, effectively controlling the Nizamat on behalf of the Nawab, which gave the Company indirect control over the entire administration.
    • Consequences: Historian Percival Spear in The Oxford History of Modern India, 1740-1975 (1978) described this system as an “institutionalized plunder.” It led to administrative breakdown, severe oppression of the peasantry through exorbitant revenue demands, and a decline in agriculture and trade. The devastating Great Bengal Famine of 1770, which wiped out an estimated one-third of the population, is widely considered to have been exacerbated by the exploitative policies of the Dual Government.
    • The system was abolished by Warren Hastings in 1772, who brought the administration of Bengal, Bihar, and Orissa under the direct control of the Company.

Provisions and Impact on Awadh:

  • The second treaty was signed with Shuja-ud-Daulah, the Nawab of Awadh.
    • He was forced to pay a war indemnity of 50 lakh rupees to the EIC.
    • He had to cede the districts of Allahabad and Kora to the Mughal Emperor Shah Alam II.
    • A mutual defence alliance was signed, making Awadh a buffer state for the EIC’s territories in Bengal. Under this agreement, the EIC was obligated to provide troops for Awadh’s defence, for which the Nawab would pay.
    • A British Resident was stationed at the Nawab’s court in Lucknow, marking the beginning of the EIC’s political influence in the state’s internal affairs.
    • The Company was also granted duty-free trading rights in Awadh.
  • The ‘Ring Fence’ Policy: Clive’s arrangement with Awadh is seen as the genesis of the ‘Ring Fence’ policy, a strategy later perfected by Warren Hastings. This policy aimed to protect the Company’s core territories by creating a ring of allied, buffer states around them. The defence of Awadh was, in effect, the defence of Bengal, but at Awadh’s expense. This treaty was a precursor to the Subsidiary Alliance, as it involved a subordinate military relationship and the payment of a subsidy.

Subsidiary Alliance

The Subsidiary Alliance system was a policy of indirect rule perfected by Lord Wellesley, the Governor-General of India from 1798 to 1805. While the practice of providing military assistance for a subsidy was used by predecessors like Dupleix and Clive, Wellesley transformed it into a systematic tool for establishing British paramountcy over Indian states without the costs and complications of direct annexation.

Context and Justification:

  • Pitt’s India Act (1784): The Act had explicitly forbidden the Company from pursuing “schemes of conquest and extension of dominion,” reflecting the British government’s desire to consolidate gains rather than engage in costly wars.
  • Wellesley’s Imperial Ambition: Wellesley was a staunch imperialist who sought to expand British influence and eliminate French competition in India.
  • The Napoleonic Threat: Wellesley masterfully used the perceived threat of a French invasion of India as his primary justification. Napoleon’s campaign in Egypt (1798) and his communications with Tipu Sultan of Mysore were presented as evidence of an imminent danger. Historians like Edward Ingram, in his work Commitment to Empire: Prophecies of the Great Game in Asia (1981), have argued that Wellesley deliberately exaggerated this threat to persuade the authorities in London to sanction his aggressive policies.

Key Features of a Subsidiary Treaty:

  1. British Protection: The EIC would assume responsibility for protecting the allied Indian state from all external and internal threats.
  2. Permanent British Force: To provide this protection, a contingent of the Company’s army, known as the “subsidiary force,” would be permanently stationed within the state’s territory.
  3. Subsidy Payment: The Indian ruler had to pay an annual subsidy for the maintenance of this force. If the ruler failed to make the payment, a portion of their territory would be ceded to the Company in lieu of the subsidy.
  4. British Resident: A British Resident would be stationed at the ruler’s court, acting as a diplomatic channel but in reality, being the instrument of British control and interference.
  5. Control over Foreign Policy: The Indian state was forbidden from engaging in diplomatic negotiations or warfare with any other state without the consent of the Governor-General.
  6. Expulsion of Other Europeans: The ruler could not employ any Europeans in their service other than the British without prior permission.
  7. Promise of Non-Interference: The EIC pledged not to interfere in the internal affairs of the state. This promise was almost universally violated.

Impact on Indian States:

  • Economic Ruin: The subsidies were exorbitant and often arbitrarily increased, leading to a massive drain of wealth from the state’s treasury. Cession of territories, like the Nizam of Hyderabad ceding the ‘Ceded Districts’ in 1800 and the Nawab of Awadh ceding half his kingdom (including Rohilkhand and Gorakhpur) in 1801, crippled their economies.
  • Political Subjugation: The states lost their sovereignty, independence, and control over foreign relations. The ruler was reduced to a figurehead, with the British Resident becoming the de facto power centre.
  • Military Demobilization: The states were forced to disband their own armies, leading to widespread unemployment among soldiers, who often turned to plunder (e.g., the Pindaris). This also stripped the states of their ability to defend themselves.
  • Administrative Decay: Protected by British arms from both internal rebellion and external invasion, rulers often became complacent and neglectful of their administrative duties and the welfare of their subjects, leading to accusations of “maladministration” which the British later used as a pretext for annexation (e.g., Awadh in 1856). Karl Marx noted that this system rendered Indian princes completely subservient tools of British policy.

Major States under Subsidiary Alliance:

  1. Nizam of Hyderabad (1798): The first to accept, seeking protection against the Marathas and Mysore.
  2. Mysore (1799): Imposed on the Wodeyar dynasty after the defeat and death of Tipu Sultan in the Fourth Anglo-Mysore War.
  3. Awadh (1801): Forced to cede vast territories as permanent payment for an increased subsidy.
  4. Peshwa Baji Rao II (1802): Signed the Treaty of Bassein to regain his position after being ousted by the Holkars, a move that precipitated the Second Anglo-Maratha War.
  5. Bhonsle of Nagpur & Scindia of Gwalior (1803): Forced to sign after their defeat in the Second Anglo-Maratha War.
  6. Travancore (1805): Accepted after the company helped suppress a military mutiny.

Prelims Pointers

  • Treaty of Allahabad: Signed in August 1765.
  • Parties: Robert Clive (EIC), Shah Alam II (Mughal Emperor), Shuja-ud-Daulah (Nawab of Awadh).
  • The EIC received Diwani (right to collect revenue) for Bengal, Bihar, and Orissa.
  • The Mughal Emperor received an annual pension of 26 lakh rupees and the districts of Kora and Allahabad.
  • The Nawab of Awadh paid a war indemnity of 50 lakh rupees.
  • Dual Government in Bengal: 1765-1772.
  • Key Indian Officials in Dual Govt: Mohammad Reza Khan (for Bengal), Raja Shitab Rai (for Bihar).
  • The Dual Government system was ended by Warren Hastings in 1772.
  • Ring Fence Policy: Associated primarily with Warren Hastings, but its origins lie in Clive’s treaty with Awadh. It aimed to create buffer states around EIC territory.
  • Subsidiary Alliance System: Systematized and perfected by Lord Wellesley (Governor-General, 1798-1805).
  • First state to accept Subsidiary Alliance: Nizam of Hyderabad (1798).
  • Treaty of Bassein (1802): A subsidiary treaty signed between the EIC and Peshwa Baji Rao II. It was a major cause of the Second Anglo-Maratha War (1803-1805).
  • Chronological Order of states accepting Subsidiary Alliance (Major ones):
    1. Hyderabad (1798)
    2. Mysore (1799)
    3. Awadh (1801)
    4. Peshwa (1802)
    5. Bhonsle & Scindia (1803)
  • Lord Wellesley was recalled in 1805 due to the high financial cost of his expansionist wars and policies.

Mains Insights

Treaty of Allahabad: The Foundation of British Sovereignty

  • Transition of EIC’s Role: The treaty marked the pivotal moment when the EIC transitioned from a commercial entity to a de facto sovereign power. By acquiring the Diwani, it gained control over the vast revenues of India’s richest province, which it then used to finance its trade, administration, and military expansion, effectively using Indian money to conquer India.
  • The ‘Masked’ System of Rule: The Dual Government was a shrewd political move by Clive. He avoided the responsibilities of direct rule, which the Company was ill-equipped to handle at the time. It also served to ‘mask’ the Company’s sovereignty, preventing a united backlash from other Indian powers and avoiding the scrutiny of the British Parliament.
  • Consequences of Power without Responsibility: This system institutionalized irresponsibility. Company officials, focused on maximizing revenue for personal gain and for the Company, had no incentive to invest in administration or public welfare. The result was a catastrophic failure of governance, leading directly to the Bengal Famine of 1770 and exposing the deeply exploitative nature of early colonial rule.

Subsidiary Alliance: An Instrument of Imperialism

  • Evolution of British Policy: The Subsidiary Alliance represents a significant evolution from the more defensive ‘Ring Fence’ policy. While the Ring Fence sought to create buffers for security, the Subsidiary Alliance was an offensive mechanism for establishing political dominance and economic control. It was the crucial step towards the policy of ‘Subordinate Isolation’ under Lord Hastings, where every state was forced to accept British paramountcy.
  • Historiographical Debate (Wellesley’s Motives):
    • Imperialist School: Historians like P.E. Roberts justified Wellesley’s actions as a necessary defensive response to the threat posed by Napoleonic France and intransigent Indian rulers like Tipu Sultan. They view it as a strategy that brought stability to a fragmented India.
    • Nationalist/Revisionist School: Historians such as Bipan Chandra and Edward Ingram argue that the ‘French threat’ was a pretext for a pre-planned policy of aggressive expansionism driven by Wellesley’s personal ambition and the economic interests of the EIC. They see the system as a primary tool for the political and economic subjugation of India.
  • Cause and Effect Relationship:
    • Cause: Political fragmentation in post-Mughal India, inter-state rivalries (e.g., Hyderabad vs. Marathas), Wellesley’s imperialist drive, and the pretext of the French threat.
    • Effect: Systematic dismantling of Indian states’ sovereignty, economic drain through subsidies, creation of a vast British-Indian army funded by Indian states, widespread social dislocation due to demobilization of local armies, and the establishment of undisputed British paramountcy by the early 19th century. This laid the foundation for the political grievances that later culminated in the Revolt of 1857.

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