Treaty of Allahabad

The Treaty of Allahabad was signed on August 12, 1765, following the decisive Battle of Buxar in 1764. Negotiated by Robert Clive on behalf of the British East India Company, the treaty laid the foundation of British political and financial rule in India. It was concluded through two distinct agreements: one with Mughal Emperor Shah Alam II and another with Shuja-ud-Daula, the Nawab of Awadh.

Historical Background and Battle of Buxar

The joint forces of Nawab Mir Qasim of Bengal, Nawab Shuja-ud-Daula of Awadh, and Mughal Emperor Shah Alam II fought the British East India Company led by Hector Munro at Buxar on October 22, 1764. The defeat of the allied forces left the Mughal Emperor and the Nawab of Awadh at the mercy of the Company. Robert Clive, who returned to Bengal as Governor in May 1765, negotiated the terms at Allahabad.

Terms of the Treaty with Shah Alam II

The agreement signed with Mughal Emperor Shah Alam II on August 12, 1765, transformed the financial authority of the British East India Company.

• Grant of Diwani Rights: The Emperor granted the Diwani (right to collect revenue and administer civil justice) of Bengal, Bihar, and Orissa to the East India Company.
• Annual Tribute: The Company agreed to pay an annual tribute of Rs 26 lakh to the Mughal Emperor.
• Territorial Transfers: The districts of Kora and Allahabad were taken from the Nawab of Awadh and handed over to Shah Alam II for his maintenance.
• Residences and Protection: The Emperor was placed under Company protection and was housed at the fort of Allahabad.

Terms of the Treaty with Shuja-ud-Daula

The second agreement was signed with Shuja-ud-Daula, the Nawab of Awadh, on August 16, 1765.

• Surrender of Territories: Shuja-ud-Daula surrendered the districts of Kora and Allahabad to Emperor Shah Alam II.
• War Indemnity: The Nawab agreed to pay Rs 50 lakh to the East India Company as war indemnity.
• Restoration of Awadh: Awadh was restored to Shuja-ud-Daula, except for Kora and Allahabad, establishing Awadh as a buffer state between the Company’s territories and potential invaders like the Marathas.
• Estate of Balwant Singh: The Zemindari of Banaras and surrounding areas was secured for Raja Balwant Singh, a vassal of Awadh who aided the British.
• Duty-Free Trade: The British East India Company obtained duty-free trading rights throughout the territory of Awadh.

Comparison of the Two Agreements

Implementation of Dual Government in Bengal (1765–1772)

The Treaty of Allahabad introduced the Dual System of Government (Diarchy) in Bengal, devised by Robert Clive. Power was separated from responsibility.

• Diwani: Revenue collection and civil justice controlled directly by the East India Company.
• Nizamut: Criminal justice and general administration remained with the Nawab of Bengal.
• Deputy Subahdar: The Company appointed Deputy Subahdars (such as Mohammad Reza Khan for Bengal and Raja Shitab Rai for Bihar) to collect revenue on its behalf, maintaining a puppet administrative facade.
• Financial Drain: The Company used revenue collected from Bengal to purchase Indian goods for export to Europe, ending the inflow of British silver to India.

Consequences and Strategic Impact

The Treaty of Allahabad altered the geopolitical landscape of the Indian subcontinent.

• Financial Autonomy: Direct control over Bengal’s revenues financed the Company’s merchant activities and military expansion across India.
• Buffer State Creation: Restoring Awadh to Shuja-ud-Daula created a defensive shield protecting Bengal from Maratha incursions.
• Bengal Famine of 1770: Exorbitant revenue collection demands combined with severe drought led to a catastrophic famine, killing roughly one-third of Bengal’s population.
• End of Dual System: Warren Hastings abolished the Dual System in 1772, bringing revenue administration directly under British collectors.

Essential Facts and Exam Trivia

• Robert Clive’s Second Governorship: Clive signed the treaty during his second term as Governor of Bengal (1765–1767).
• Location: The signing took place at Allahabad Fort, built originally by Mughal Emperor Akbar in 1583.
• Diwani Revenue Figures: In the first year of acquiring Diwani rights (1765–66), the Company collected approximately Rs 2.25 crore from Bengal, Bihar, and Orissa.
• Reversal by Marathas: In 1771, Maratha leader Mahadji Shinde escorted Shah Alam II back to Delhi. Emperor Shah Alam II subsequently left British protection, losing his right to the Allahabad and Kora districts as well as the Rs 26 lakh tribute.