Subsidiary alliance is a system developed by the East India Company by Lord Wellesley. It solved the problem of ruling a nation which is under the rule of a king.
Some of the rules of the subsidiary alliance were:
An Indian ruler entering into a subsidiary alliance with the British had to accept British forces in his territory and also agreed to pay for their maintenance.
Such a ruler would not form an alliance with any other power, nor would he declare war against any power without the permission of the British.
The ruler would not employ any Europeans other than the British, and if he were already doing so, he would dismiss them.
In case of a conflict with any other state, the British would decide what to do, and he would accept their solution.
The ruler would acknowledge the East India Company as the power in India.
In return for the ruler accepting its conditions, the Company undertook to protect the state from external dangers and internal disorders.
If the Indian rulers failed to make the payments required by the alliance, then part of their territory was to be taken away as a penalty.
Under this doctrine, Indian rulers under British protection surrendered the control of their foreign affairs to the British. Most disbanded their native armies, instead maintaining British troops within their states to protect them from attack. As British power grew, in most parts of India this became increasingly unlikely. The system also allowed the British to maintain their army at the expense of local rulers.