2. Expel all non-English foreigners from his state;
3. Allow the British to supervise his relations with other Indian states; and
4. Accept a British resident in his court.
In return, the British would protect his state from invasions. However, the British could depose him in case of any lapse. The British exercised this right in deposing the rulers of Tanjore (Thanjavur), Surat and the Carnatic.
The subsidiary alliance enabled the British to control Indian states without waging wars to annex them. The British could maintain large armies at the expense of Indian rulers.
The danger of Indian rulers forming alliances against the British was also removed. Besides, the British resident in a subsidiary state could keep a close watch on the state’s internal affairs.
Assured of British protection, the Indian rulers who accepted the subsidiary alliance neglected administration. They imposed heavy taxes on the people to meet the cost of maintaining British troops. They lost their sovereignty due to the presence of the British resident. The Nizam, in 1798, became the first ruler to accept the alliance.