Dalhousie implemented the Doctrine of Lapse. It declared that if an Indian ruler died without male heir his kingdom would lapse, that is, become part of Company territory.

The Subsidiary Alliance was introduced in India by Lord Wellesley.  This System was used by Wellesley to bring Indian States within the orbit of British power. It was first accepted by Nizam of Hyderabad. This system was not accepted by many Maratha rulers, Holkar state of Indore was one of them.

The doctrine of subsidiary alliance was introduced by Lord Wellesley, British Governor-General in India from 1798 to 1805.  As per the system, Indian rulers were not allowed to have their independent armed force. They were to be protected by the company, but had to pay for the 'subsidiary forces' that the company was supposed to maintain for the purpose of this protection. It played an important role in the conquest of lndia.

The doctrine of subsidiary alliance was introduced by Lord Wellesley. According to the term of this alliance, Indian rulers were not allowed to have their independent armed force. They were to be protected by the company, but had to pay for the 'subsidiary forces' that the company was supposed to maintain for the purpose of this protection. If the Indian rulers failed to make the payment, then part of their territory was taken away as a penalty. The Indian ruler could not employ any European in their service without prior approval of British. Also, they could not negotiate with any other Indian rulers without consulting the Governor-General.

The Nizam of Hyderabad was the first to enter into such an alliance. Tipu Sultan of Mysore refused to do so, but after the British victory in the fourth anglo-mysore war, Mysore was forced to become a subsidiary state. The Nawab of Awadh was the next to accept the Subsidiary Alliance, in 1801. After the third anglo maratha war, the maratha ruler Baji Rao II also accepted a subsidiary alliance.

The main principles of a subsidiary alliance were:

1. An Indian ruler entering into a subsidiary alliance with the British had to accept British forces within his territory and also agreed to pay for their maintenance.
2. The ruler would accept a British Resident in his state.
3. An Indian ruler who entered into a subsidiary alliance would not enter into any further alliance with any other power, nor would he declare war against any power without the permission of the British.
4. The ruler would not employ any Europeans other than the British, and if he were already doing so, he would dismiss them.
5. In case of a conflict with any other state, he would agree the resolution decided upon by the British.
6. The ruler would acknowledge the East India Company as the paramount power in India.
7. In return for the ruler accepting its conditions, the Company undertook to protect the state from external dangers and internal disorders.
8. If the Indian rulers failed to make the payments required by the alliance, then part of their territory was to be taken away as a penalty.

The Nizam of Hyderabad was the first to enter into such an alliance. Tipu Sultan of Mysore refused to do so, but after the British victory in the Fourth Anglo-Mysore War, Mysore was forced to become a subsidiary state. The Nawab of Awadh was the next to accept the Subsidiary Alliance, in 1801. After the Third Anglo-Maratha War, the Maratha ruler Baji Rao II also accepted a subsidiary alliance. several states like: Hyderabad (1798 and 1800), Tanjore (1799), Awadh (1801), Bhonsle (1803), and Indore(1817) adopted this system.

Because of the Subsidiary Alliance System, the native Indian rulers lost their prestige and dignity. As per the Subsidiary Alliance, an Indian ruler entering into a subsidiary alliance with the British had to accept British forces within his territory and also agree to pay for their maintenance.

According to the terms of a subsidiary alliance, princely rulers were not allowed to have an independent armed force. They were to be protected by the East India Company, but had to pay for the 'subsidiary forces' that the company was supposed to maintain for the purpose of this protection. If the Indian rulers failed to make the payment, then part of their territory was taken away as a penalty. For example, the ruler of Awadh was forced to give over half of his territory to the company in 1801, as he failed to pay for the "subsidiary forces".

Defects of Subsidiary Alliance:-

1. The native rulers lost their prestige and dignity,

2. The subsidy demanded from the Indian rulers was beyond their means and they could not afford it. So they taxed their people very heavily,

3. The Indian rulers were compelled to disband their own armies. The disbanded soldiers, in course of time, joined robber gangs such as Thugs and Pindaris and troubled the public,

4. The local rulers lived a life of irresponsibility and degradation because they considered

that their security was the British concern and

 5. Though the Indian rulers were not allowed to wage war with each other directly, they were slowly preparing themselves for wars and they were plotting against one another.

After the Third Anglo-Maratha War, the Maratha ruler Baji Rao II also accepted a subsidiary alliance. several states like: Hyderabad (1798 and 1800), Tanjore (1799), Awadh (1801), Bhonsle (1803), and Indore(1817) adopted this system.

According to the terms of a subsidiary alliance, princely rulers were not allowed to have an independent armed force. They were to be protected by the East India Company, but had to pay for the 'subsidiary forces' that the company was supposed to maintain for the purpose of this protection.

The system of subsidiary alliance was applied to many Indian states by Lord Wellesley. Using this system, subsidiary states surrendered its political independence in return for British protection. The ruler who entered into subsidiary alliance had to pay money or give some territory to the English Company. 

The Doctrine of Lapse was an annexation policy introduced by Lord Dalhousie. It was based on the idea that in case a ruler of dependent state died childless, the right of ruling over the State lapses to the sovereign. It was used by him to annex the independent Indian States such as the States of Satara, Jaipur, Sambhalpur, Baghat, Udaipur, Jhansi and Nagpur.

Dalhousie provided the British with the tool called Doctrine of lapse that they used to annex an Indian kingdom if its ruler died without a male heir. They annexed Satara(1848), Sambalpur(1850), Udaipur(1852), Nagpur(1853) and Jhansi(1854) using that.

The Doctrine of Lapse was an annexation policy introduced by Lord Dalhousie. It was based on the idea that in case a ruler of dependent state died childless, the right of ruling over the State lapses to the sovereign. It was used by him to annex the independent Indian States such as the States of Satara, Jaipur, Sambhalpur, Baghat, Udaipur, Jhansi, Nagpur.