Third battle of Panipat in the context of Shuja-ud-Daula

Colonial India was the part of the Indian subcontinent that was occupied by European colonial powers during and after the Age of Discovery. European power was exerted both by conquest and trade, especially in spices. The search for the wealth and prosperity of India led to the colonisation of the Americas after Christopher Columbus went to the Americas in 1492. Only a few years later, near the end of the 15th century, Portuguese sailor Vasco da Gama became the first European to re-establish direct trade links with India by being the first to arrive by circumnavigating Africa (c. 1497–1499). Having arrived in Calicut, which by then was one of the major trading ports of the eastern world, he obtained permission to trade in the city from the Saamoothiris (Zamorins). The next to arrive were the Dutch, with their main base in Ceylon. Their expansion into India was halted after their defeat in the Battle of Colachel to the Kingdom of Travancore, during the Travancore–Dutch War on the hands of Marthanda Varma.

Trading rivalries among the seafaring European powers brought other coastal powers from the empires of Europe to India. The Dutch Republic, England, France, and Denmark–Norway all established trading posts in India in the early 17th century. As the Mughal Empire disintegrated in the early 18th century, and then as the Maratha Empire became weakened after the third battle of Panipat, many relatively weak and unstable Indian states which emerged were increasingly open to manipulation by the Europeans, through dependent Indian rulers.