Warren Hastings since from his appointment as the governor-general of India sought to impose the British dominance in India. However it was Hastings who framed the imperial fabric of the political sovereignty of England over the whole of India. To establish and strengthen the sovereignty the Company in India, Hastings had to encounter several obstacles. The Gurkhas of Nepal posed the first resistance to the authority of Hastings in India. The Gurkhas from Western Himalaya had wrested the control of Nepal from the successor of Ranjit Malla of Bhatgaon in 1768. With the passage of time the Gurkhas began to expand their control over the region beyond the mountains but the Chinese offered them resistance. As a result they were pushed towards the boundaries of Bengal and Oudh. But the English already occupied the Gorakhpore district in the year of 1801. As a result the territory of the English came in line with the frontiers of the Gurkhas. The dispute between the company and the Nepalese sparked off when the Company occupied the districts of Butwal and Sheoraj.

In response to the company`s occupation of the territories, the Gurkhas in May 1814 attacked the three police stations at Butwal. Lord Hastings, the then Governor General considered it as the open challenge to the Company`s authority. Therefore he resolved to launch war against the Gurkhas along the frontier from the river Sutlej to Koshi. Hastings held the office of the Commander in chief of the army planned for the campaign against the Gurkhas. A large army of 34000 soldiers was gathered against the Gurkha army of 12000.the campaigns of 1814-15 were a miserable failure. General Gillespie`s attack on the mountain fortress of Kalanga met with a crushing defeat. The General lost his life in the action. Gillespie`s successor, Major general Martindell also suffered a rushing defeat, before the stronghold of Jaitak. As a result the English power suffered a terrible set back, which shattered the prestige of company`s supremacy in India.

But the English forces renewed their efforts in order to restore their power and prestige. Colonel Nicholls and Gardner succeeded in capturing Almora in the Kumaon hills in 1815. In the due course General Ochterlony wrested the fort of Malaon from Amar Singh Thapa, the Gurkha chief in may 1815. However the downfall of the Malaon induced the Gurkhas to open negotiations of peace. However Hastings was exorbitant in his demands of the peace treaty. As a result the attitude of the Gurkhas was hardened and the war party came in ascendancy in Nepal. The hostilities between the Company and the Gurkhas of Nepal became bitter again. David Ochterlony now in the supreme command advanced to the heart of the Nepal and inflicted crushing defeat upon the Nepalese at Makwanpur on 28th February 1816. However this defeat proved very difficult for the Gurkhas. They were not in a position to revive their lost glory and power. Finding the further resistance difficult, the Gurkhas accepted the treaty of Sagauli. In March 1816. The Governor General was however content with the moderate treaty. Moreover he did not asked for any excessive demands.

As a result of the treaty the Gurkhas surrendered the districts of Garhwal and Kumaon, including a great portion of Terai region. The Gurkhas of Nepal had no way but to accept a British Resident at Katmandu. At the same the Gurkhas also withdrew their authority from the territory of Sikkim. In the due course the English got a loan of one crore from the Nawab of Oudh. The English in return handed over a part of the Terai in Rohilkhand Pargana to the Nawab.

The northeast frontier of the Company was pushed up to the mountains. The English then used the mountainous sites to set up hill stations and the recreation sites. The northeastern mountainous region became an important route of communication with the remoter regions of central Asia. By a separate treaty with the Raja of Sikkim on February 1817, the Company handed over to the Raja of Sikkim a part of the territory lying between the Mechi and the Tista River. Thus the company established a fortified barrier on the eastern frontier of Nepal.