Treaty of Allahabad

The Treaty of Allahabad was a treaty signed on August 12, 1765 between the Mughal Emperor Shah Alam II and the British East India Company. It was signed in the aftermath of the Battle of Buxar, which had been fought the previous year and ended in a decisive victory for the British.

The main cause of the treaty was the increasing conflict between the Mughal Empire and the British East India Company, which had been growing in power and influence in India. The Mughal Empire, which was in decline, had granted the Company the right to trade in parts of India in exchange for an annual payment, but as the Company grew in power, it began to demand greater concessions and assert itself more aggressively.

The main features of the Treaty of Allahabad included the following:

1. With this treaty, East India Company got a strong political footing in India. Before the treaty, the British only had a strong trading relation with Indian rulers. The Mughal Emperor granted the British East India Company the right to collect taxes and administer justice in parts of India, effectively making the Company the de facto ruler of those areas.
2. The Company agreed to pay an annual tribute to the Mughal Emperor in exchange for this right.
3. The Mughal Emperor also granted the Company the right to build a fort at Allahabad, which became a major center of British power in India.
4. The treaty also recognized the autonomy of the Nawabs of Bengal, who had allied with the Mughal Empire in the Battle of Buxar.

The treaty gave the Company access to nearly 40,000 square kilometres of taxable fertile land. British were entitled to collect tax directly in lieu of Rs 26 lakhs tribute to be paid annually to the Mughal. The districts of Kora and Allahabad were returned to the Mughal Emperor. The Nawab of Awadh had to pay Rs 53 lakhs in war indemnity and was sent back to Awadh, with a promise to money to operate the court and a subsidiary army. Nawab of Bengal retained the judicial functions but the Company had the power to collect revenue. This new set up called Dual System of Government and acquisition of the diwani rights by the Company is an important event in the history of India. This legally acknowledged the British control over Bengal, Bihar and Orissa; only foujdari and administrative authority was left to the Nawab.

The consequences of the Treaty of Allahabad were significant for both the Mughal Empire and the British East India Company. For the Mughal Empire, the treaty marked the beginning of the end of its power and influence in India. The Company’s expansion into new areas and its growing control over the administration of justice and taxation marked the beginning of British rule in India. For the British East India Company, the treaty marked a major step in its expansion and consolidation of power in India, and set the stage for its eventual domination of the region. With this, the East India Company got richer than before and needed no money from England to buy merchandize. The money earned was send to England and not spent on Bengal, this drain of wealth started from India.