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Synopsis When the administration of India and its allied states was taken over by the British Parliament the Queen's proclamation had assured the Indian states that agreements entered into by the East India Company would be fully honoured. The East India Company through its long association with Indians had developed a style of administration in which its colonial subjects were seen as the allies of the British administration. The British believed in the involvement of the Indian leaders and the masses with the continuance of the British colonial rule. The fact was that during the crowns administration British paramountcy over the states was made explicit while during the days of the company it was only implicit. The study of British colonial policy towards Indian states is an interesting study for political scientists, constitutionalists and historians. It is hoped that the study will provide interesting material to students of constitutional history and political scientists.