Background
Hundreds of princely states existed in India during the period of British rule. These were not parts of British India proper, having never become possessions of the British Crown, but were tied to it in a system of subsidiary alliances.
In 1947 the British finalized their plans for quitting India, and the question of the future of the princely states was a conundrum for them. As they were not British, they could not be partitioned by the British between the new sovereign nations of India and Pakistan. The Indian Independence Act 1947 provided that the suzerainty of the British Crown over the princely states would simply be terminated, with effect from 15 August 1947. That would leave the princely states completely independent, even though many of them had been dependent on the Government of India for defence, finance, and other infrastructure. With independence, it would then be a matter for each ruler of a state to decide whether to accede to India, to accede to Pakistan, or to remain outside both.
Read more about this topic: Instrument Of Accession
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