The Subsidiary Alliance System was used by Wellesley to bring the Indian states within the boundary of the British political power. The system served the double powers of asserting British supremacy in India and at the same time save India from the threat of Napoleon. The System of Subsidiary Alliance played a part in the expansion of the Company`s dominion. Under this doctrine, Indian rulers under British protection suspended their native armies, instead maintaining British troops within their states. They surrendered control of their foreign affairs to the British. In return, the East India Company. would protect them from the attacks of their rivals.
Alfred Lyall mentioned four stages of the company`s participation in the Indian Wars according to the policy of the Subsidiary Alliance. In the first step the Company undertook to lend its troops to a friendly native prince. For this reason the company invited the Nizam of Oudh to sign the Treaty of Subsidiary Alliance with them. In the second phase the Company used the Subsidiary Alliance diplomatically. The Company now assisted with troops to that Indian ally who made common cause with them. In the next stage of applying Subsidiary Alliance the company demands only money and not men from the native princes. According to this policy the company undertook to maintain and equip an army under the English officers. The Company at the same time also declared that it would render the availability to the ally in a fixed umber of troops in return of a fixed sum of money to the Company. The treaty of Hyderabad in 1798 falls under the third stage of the subsidiary alliance. The final stage of the Subsidiary Alliance was a logical step and utterly useful for the company to strengthen its political authority over the native provinces. According to this policy the Company undertook to defend the territories of the Indian ally. Thus they placed a subsidiary force in the territory of the State. The Indian allies were asked not to pay money but to surrender the territory from the revenues. According to the Company the revenues collected would be required to meet the expenses of the subsidiary forces. The treaty of Nizam in1800 was the result of the final stage of the Subsidiary Alliance .In this way most of the native territories surrendered their political authority to the East India Company. Thus Subsidiary Alliance was nothing but one of the tactical policy of the Company in order to control the political machinery of India.
However Wellesley did not introduce the policy of Subsidiary Alliance. Long before him the French Chief Dupleix introduced the policy of lending the European troops in return of a fixed amount of money. The English also adopted the system. Ever since the governorship of Clive, almost every governor applied it, though with little insight. The special achievement of Wellesley was that he developed and elaborated the policy and applied in almost every Indian state. The earliest subsidiary treaty negotiated by the Company was with the Nawab of Oudh. By this treat, the Company undertook to defend the frontiers of Oudh on the condition that Nawab would discharge the expenses of such defence.
A typical subsidiary treaty was negotiated by a several fixed terms and condition. According to the Subsidiary Alliance, the Indian state was to surrender its external relation and had to refrain from waging any war, a bigger state was to maintain an army within its territories commanded by the British officers to preserve the public peace. Moreover the ruler or the native prince had to cede the territory with its political sovereignty for the maintenance of that force. The smaller States were also bound to pay tribute in cash to the Company. The Subsidiary Alliance also declared that the state had to accept a British resident in the capital. This resident would be entrusted to look after the maintenance of the army and administration of the native states. The states were denied the power to employ any Europeans in its service without the prior permission of the Company. The Company had the absolute authority to control the administrative policies and interfering in the internal affairs of the state. Through the subsidiary Alliance it became the responsibility of the Company to protect the Indian state from the foreign enemy.
The system of the Subsidiary Alliance was one of the significant tactical policies of the British in India. It shattered the Indian states completely and established the foundation of the political authority of the British in India. Thus the subsidiary Alliance deprived the Indian princes from taking any measure or forming any confederacy against the British authority in India. Moreover it enabled the Company to maintain a big army at the expense of the Indian princess. The posting of the Company`s army in the capital of the Indian territories enabled the English to control the strategic position in India. The Subsidiary Alliance also helped the Company to effectively counteract any possible French moves in India. Being the ally of the Indian states the Company asked the native princes to dismiss the French official from the Court. Thus the company won the power of becoming an arbiter in the inter-state disputes. All avenues of the direct contact of the Indian states and the foreign powers were shattered. However the immediate effect of the subsidiary Alliance is that the Company became the sovereign authority and the native prices acted merely as the cipher as a result of the policy of the Subsidiary Alliance.
Unlike the British, the Subsidiary Alliance proved demoralizing for the Indian princes and the people of these states were subjected to abject misery. According to the terms and of the Subsidiary Alliance, the Indian princes accepting the treaty, had to surrender their sovereignty. As a result they themselves acted as the subordinate or a mere cipher in their own territory. The Indian princes in this way lost their independence virtually. The interference of the British residents in the day-to-day administration completely paralyzed the easygoing administrative machinery. Hence the common people had to endure enormous sufferings. The Subsidiary System supported the weak and the oppressive rulers and deprived the strong people who could put resistance to this misrule. Hence the Indian states under the policy of the Subsidiary Alliance suffered from the absence of any strong rulers who could put an end to the oppression. Moreover the native state that accepted the subsidiary Alliance with the company courted the financial ruin. The amount of one-third money of the state revenue, which was demanded by the company, was so high that the state fell in debts. Eventually when the prince became unable to pay the tax, the territory was taken over by the Company. The policy of the Subsidiary alliance thereby became the instrument of the Company to extend the political and the territorial authority of the British East India Company.
The Subsidiary Alliance was primarily aimed for the extension of the political authority of the Company. Lord Wellesley, the shrewd diplomat used the policy to ruin the Indian states financially. The financial breakdown of the Indian states left nothing but to accept b the British submission. In due course the administrative system was completely paralyzed. The Company eventually took over the territory according to the terms and condition of the Subsidiary Alliance/. The policy of the Subsidiary Alliance laid the foundation of the political sovereignty of the British in India.