The death of Balaji Viswanath gave way to the rise of Baji Rao as Peshwa (1720-40), who had “the head to plan and the hand to execute”. His aim was to hoist the Maratha flag in the territories from the Krishna to the Indus.

The emergence of Nizam-ul-Mulk as a virtually independent ruler in the Deccan after the battle of Sankarkedla (1724) was an important political change. Hereafter the Maratha activities came to be closely linked up with those of the rules of Hyderabad.

Baji Rao led two expeditions to Karnataka (1725-27) and made a beginning of the extension of the power of the Maratha in the Mysore region. In the west coast he won remarkable successes against the Portuguese. The natives of North Konkan suffered terribly from their policy of religious persecution. They interfered with trade by demanding tribute from ships plying on the west coast. Local chiefs were exposed to their oppressive demands.

No national government of the Marathas could tolerate these atrocities and encroachments of a foreign power. The strong citadel of Bassein was the symbol of Portuguese power in this region. The Maratha operations against the Portuguese started in 1737 under the Commandership of Chimnaji Appa. Basein fell in 1739. It was a great military exploit.

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The power of the Portuguese was broken. The English merchants of Bombay conciliated the Peshwa, sent an emissary to him and arranged a treaty which was finalised after his death. Baji Rao did not aim at liquidating the newly established principality of Nizam-ul-Mulk. He did seek the extension of Maratha power and achieved his purpose to a considerable extent. But his policy was characterised by moderation, toleration and a sense of maturity.