Overview
On 17 May 1782, representatives of the Maratha Confederacy and the British East India Company signed the Treaty of Salbai after prolonged negotiations. The agreement sought to settle the First Anglo-Maratha War, a conflict shaped by competing claims to the Maratha peshwaship and by the Company's expanding political ambitions in western India.
The treaty produced a compromise. The Company retained Salsette and the smaller islands near Bombay, while many territories seized during the war were returned to the Marathas. The British also abandoned their support for Raghunath Rao and recognized Madhavrao II as peshwa. In return, the Marathas accepted limits on their relations with other European powers and agreed to preserve the Company's earlier trading privileges.
The settlement created relative peace between the Marathas and the Company for roughly twenty years, until the Second Anglo-Maratha War began in 1802. Its immediate effect was conciliatory, but its long-term consequences strengthened the British position by isolating Mysore and exposing divisions within the Maratha Confederacy.
Background
The treaty emerged from the First Anglo-Maratha War. A central issue in that conflict was the position of Raghunath Rao, whom the British supported as a claimant to the peshwaship. The Maratha government, led politically from Pune, instead recognized Madhavrao II. Earlier diplomacy had already produced the Treaty of Purandar in 1776, but disagreements between the Bombay Council and the authorities associated with Warren Hastings undermined that settlement.
Nana Fadnavis, a leading figure in the Pune government, distrusted the British because the Bombay Council had sheltered Raghunath Rao despite the earlier agreement. The prolonged war placed pressure on all sides. The East India Company's resources were strained, administrative problems were mounting in London, and Britain was receiving no immediate assistance because it was engaged in the American War of Independence.
Within the Maratha Confederacy, Mahadji Shinde sought to assert his leadership and avoid another extended conflict. These circumstances encouraged a negotiated settlement, though Nana Fadnavis and the Pune government initially remained cautious.
Prelude
Mahadji Shinde independently brokered the agreement at Salbai, described as a small village near Gwalior. David Anderson negotiated and signed on behalf of the East India Company, while Mahadji signed for the Maratha side on 17 May 1782. Warren Hastings ratified the treaty on 6 June.
The Maratha ratification took longer. Haidar Ali of Mysore died on 7 December 1782, and his death hastened the decision of Nana Fadnavis and the Pune government to accept the arrangement. The peshwa ratified the treaty on 20 December 1782. The treaties were formally exchanged on 24 February 1783.
The Event
The Treaty of Salbai contained seventeen articles. Its territorial provisions required the English to return places taken during the war after the Treaty of Purandar, including Bassein, to the peshwa. Territories conquered by the Company in Gujarat were also to be restored to the peshwa and the Gaikwad, to whom they had previously belonged.
The Company retained Salsette and the smaller islands near Bombay. The treaty also stated that Broach would remain with the English. However, the later outcome is described differently in the historical assessment of the settlement: Broach in its entirety was given to Mahadji Shinde upon ratification. This distinction reflects the difference between the stated terms and the territorial result recorded after ratification.
The Company agreed to stop supporting Raghunath Rao, whether with money or by other means. He was to choose his residence and receive a monthly pension of Rs 25,000 from the peshwa. Madhavrao II was acknowledged as peshwa, while Fatesinh Gaikwad was to retain the territory he had previously possessed and continue serving the Maratha state.
The treaty also addressed Mysore. The peshwa undertook that Haidar Ali would relinquish territory recently seized from the English. Haidar Ali was required to restore territories taken from the English and the Nawab of Arcot. The agreement defined the allies of both parties and required each side not to molest the other's allies.
The Company was to retain its earlier trading privileges. The peshwa agreed not to offer support to another European power, and the Marathas guaranteed that the French would not establish settlements in their territories. Mahadji Shinde was appointed mutual guarantor, responsible for overseeing proper observance of the treaty and attempting to crush whichever party violated its conditions.
Turning Points
The most important diplomatic turning point was the abandonment of Raghunath Rao's cause. By ending British support for him and recognizing Madhavrao II, the treaty removed the immediate dynastic issue that had helped sustain the war.
A second turning point was the separation of the Marathas from Mysore. By placing pressure on Haidar Ali's territorial gains and defining the allies of both sides, the settlement helped the Company isolate a major South Indian power. This weakened the possibility of a wider alignment among the Marathas, Mysore, and the Nizam.
Participants
Maratha Confederacy
Mahadji Shinde was the central Maratha negotiator and the treaty's mutual guarantor. His independent diplomacy reflected his desire to avoid renewed conflict and strengthen his authority within the Confederacy. Nana Fadnavis represented the caution of the Pune government, which had serious reasons to distrust British commitments but ultimately ratified the agreement on behalf of the peshwa.
Madhavrao II benefited politically from the treaty's recognition of his position. Raghunath Rao, by contrast, lost British backing and was assigned a pension.
British East India Company
Warren Hastings was the senior British figure associated with the settlement, while David Anderson concluded the treaty for the Company. The British accepted the return of substantial territories but secured Salsette, trading privileges, restrictions on Maratha relations with other European powers, and a peaceful strategic environment.
Aftermath
The treaty ended the First Anglo-Maratha War and reduced immediate military pressure on the Company. The Marathas recovered territories taken after the Treaty of Purandar, while the British kept Salsette. War indemnities promised by the Marathas in 1776 were written off, and the Company gained no substantial territorial expansion beyond Salsette according to the historical assessment of the settlement.
The agreement also helped the British neutralize Mysore before turning their attention again to Maratha politics. Its guarantee mechanism, centered on Mahadji Shinde, was intended to ensure compliance, but the treaty did not eliminate rivalries within the Confederacy.
Historical Significance
The Treaty of Salbai is often viewed as a short-term diplomatic success for both sides but a long-term setback for Maratha unity. It gave the Marathas peace and restored territory at a time when continued war was costly. For the British, it secured breathing space despite limited resources and the absence of support from London.
Its larger importance lay in its political consequences. The treaty broke up the possibility of a durable Maratha-Mysore-Nizam alignment and gave the Company grounds to intervene separately in disputes involving individual Maratha chiefs. In this interpretation, the settlement represented a lost opportunity for Indian powers to coordinate against British expansion.
Legacy
The treaty's enduring legacy lies less in a permanent territorial settlement than in the political balance it created. It preserved Maratha power for a time while allowing the Company to consolidate its position. The peace lasted until 1802, but the divisions exposed by the negotiations remained available for later British diplomacy.
Historiography
Historical assessments of Salbai differ according to whether its immediate or long-term effects are emphasized. In the short term, it was a practical compromise: the Marathas recovered territory, the British retained Salsette and commercial privileges, and both sides avoided another costly war. In the long term, it has been described as a Maratha blunder because it weakened unity, isolated Mysore, and enabled the British to deal with Maratha chiefs separately. Mahadji Shinde's independent role and Nana Fadnavis's hesitation also reveal tensions between Maratha regional authority and the Pune government.