The treaty of Bassein was an important landmark in the history of British supremacy in India. The British East India Company had established their rule over most parts of India during the latter half of eighteenth century. The Head of Indian administration was the Governor-General. Lord Wellesley was appointed as the Governor-General on April 26, 1798. He conceived the policy of Subsidiary Alliance due to his firm conviction that, the best way of safeguarding the interests of England was to reduce the whole of India into a military dependence on the East India Company.
During the tenure of Lord Wellesley, Marathas, the rulers of Maharashtra, had weakened considerably. In the war that broke out between the various factions of the Maratha kingdom, Bajirao, the ruler of Maharashtra, had to seek refuge in Bassein (in Maharashtra). Being in a helpless situation, Baji Rao had to accept the Subsidiary Alliance and signed with the East India Company the Treaty of Bassein on December 31, 1802.
According to the treaty an English force of 6,000 would be permanently stationed with the Peshwa, the ruler of Maharastra, and for its maintenance the districts had to pay over two and a half million rupees to the Company. It also stated that the Peshwa could not enter into any treaty or declare war without first consulting the Company and that the Peshwa's claim upon other rulers would be settled by the Company.
On May 13, 1803 Baji Rao II was restored to Peshwarship (ruler of Maharashtra) under the protection of the East India Company. This treaty of Bassein led to rapid expansion of the supremacy of East India Company over the Indian subcontinent.