Subsidiary Alliance System was formulated by Lord Wellesley in British India. Indian princely states who entered into this alliance with the British 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. Further the Comapny controlled the foreign affairs of the state. The Indian states who signed this alliance with the British lost their independence. A British resident also stayed in the princely state to regulate its affairs. Subsidiary Alliance System helped the British to expand its rule in India.