Treaty of Bassein
After being victorious over the Nizam at Kharda, Nana Phadnavis' influence in Poona was enhanced. But soon the Marathas indulged in internal quarrels. Tired of Nana Phadnavis' dictatorship, Peshwa Madhavrao Narayan committed suicide on October 25, 1795. After various plots and counter-plots on December 4, 1796, Baji Rao II, son of Raghoba, became the Peshwa and Nana Phadnavis as his chief minister. Taking advantage of the instable situation among the Marathas, the Nizam recovered the territories which were taken by the Marathas after his defeat at Kharda.
When Lord Wellesley arrived as a Governor-General on April 26, 1798, he engineered the policy of Subsidiary Alliance. He was of the firm conviction that the best way of safeguarding the interest of England was to reduce the whole country into a military dependence on the East India Company. Though there was no conflict between the English and the Marathas, the English began to gain more strength.
The English prospects were brightened after the death of Nana Phadnavis on March 13, 1800. Thus the last chance of keeping the Marathas in order was wiped out. This has been nicely said in the words of Colonel Palmer, the British resident at Poona: "With him departed all the wisdom and moderation of the Maratha government." It was Nana who could forsee the danger of Subsidiary Alliance. Nana's death meant the removal of the barrier that had checked to a great extent the disruptive activities of the Maratha chiefs.
Both Daulat Rao Sindhia and Jaswant Rao Holkar entered into a fierce struggle with each other for supremacy at Poona. The Peshwa favoured Sindhia and finally became a puppet in his hand. On April 12, 1800 Wellesley advised the Poona Residents to manage the secret treaty with Poona for turning out Sindhia. But the Peshwa remained unmoved and the Resident suggested that only immediate destruction will make the Peshwa bow.
Treaty of Bassein signed
Matters among the Marathas were becoming worse by the Peshwa's own intrigues. It worsened more when the Peshwa murdered Vithuji Holkar, brother of Jaswant Rao Holkar in April 1801. This made Holkar rise in rebellion with a huge army and on October 23, he defeated the combined armies of Sindhias and the Peshwas at Poona and captured the city. Jaswant Rao Holkar made Amrit Rao's son Vinayak Rao the Peshwa and on the other hand Baji Rao took refuge in Bassein. And in this helpless situation, Baji Rao had no hesitation to accept the Subsidiary Alliance and signed with the East India Company the Treaty of Bassein on December 31, 1802.
The treaty provided for an English force of 6,000 to be permanently stationed with the Peshwa, and for its maintenance the districts yielding twenty six lakh rupees were to be given to the Company. It also stated that the Peshwa could not enter into any treaty or declare war without consulting the Company and that the Peshwa's claim upon the Nizam and Gaekwar would be subject to the arbitration of the Company. The Peshwa also renounced his claim over Surat.
On May 13, 1803 Baji Rao II was restored to Peshwarship under the protection of the East India Company. This treaty of Bassein was an important landmark in the history of British supremacy in India. This led to expansion of the sway and influence of the East India Company over the Indian subcontinent. However, the treaty was not acceptable to both the Marathas chieftains - the Shindes nd Bhosales. This directly resulted in the Second Anglo-Maratha war in 1803.