Wellesley developed the system of Subsidiary Alliance. The main features of the system were:
(a) The native ruler who became a subsidiary ally of the English would be protected by the Company’s government against foreign attack.
(b) In lieu of this guarantee the native ruler had to maintain a force under British command and pay a subsidy for its maintenance to the Company.
(c) He was forbidden to negotiate with any foreign power without the knowledge of the English.
In short, Lord Wellesley’s ‘Subsidiary Alliance’ was designed to meet two objectives, namely, to make the English the paramount power in India and to exterminate the French influence from India for good.
The first native ruler who accepted the Subsidiary Alliance was the Nizam of Hyderabad. Lord Wellesley also forced the Nawab of Oudh to accept it.
The rulers of Tanjore, Surat and the Carnatic also became subsidiary allies of the English.
Refusal by Tipu Sultan and Nana Phadnavis to accept the Subsidiary Alliance made their confrontation with the English inevitable.