The company appointed residents(Commercial and political agent) in Indian states, through which they started interfering in the internal affairs of the state.
States were forced into Subsidiary alliance, according to which the Indian rulers were not allowed to have their independent armies, instead, they were protected by the Company but the maintenance cost for that was to be paid by the Indian rulers.
The failure to pay will lead to a penalty to the rulers in the form of their territory. E.g. Awadh and Hyderabad.
The company resorted to military confrontations wherever they see the danger posed to its political and economic interest. E.g. Mysore
Mysore was ruled by Haider Ali and his son Tipu Sultan, and they controlled the trade at Malabar coast where the company used to buy pepper and cardamom.
Tipu sultan in 1785 stopped the local merchants to trade with the company and stopped the exports
Infuriated Britishers urged war against Tipu and four wars were fought and in the last war i.e. Battleof Seringapatam, Tipu was killed. Mysore came under Woodyear’s and the subsidiary alliance was imposed on it.
The Marathas were another power at the time, Peshwa was the most powerful position.
Marathas became weak after the Third battle of Panipat and later subdued in a series of Anglo-Maratha wars.
The first war was a draw and ended with the treaty ofSalbai (1785), Second war (1803-05) gave the British control of Orissa, north Yamuna river including Delhi and Agra.
The third Anglo-Maratha war crushed the Maratha power, Peshwa was removed and the company gained control over whole territories south of Vindhyas.