Portuguese Empire
Second empire (1663–1822)

The loss of colonies was one of the reasons that contributed to the end of the personal union with Spain. In 1640 John IV was proclaimed King of Portugal and the Portuguese Restoration War began. Even before the war's final resolution, the crown established the Overseas Council, conceived in 1642 on the short-lived model of the Council of India (1604–1614), and established in 1643, it was the governing body for most of the Portuguese overseas empire. The exceptions were North Africa, Madeira, and the Azores. All correspondence concerning overseas possessions were funneled through the council. When the Portuguese court fled to Brazil in 1807, following the Napoleonic invasion of Iberia, Brazil was removed from the jurisdiction of the council. It made recommendations concerning personnel for the administrative, fiscal, and military, as well as bishops of overseas dioceses. A distinguished seventeenth-century member was Salvador de Sá.

In 1661 the Portuguese offered Bombay and Tangier to England as part of a dowry, and over the next hundred years the English gradually became the dominant trader in India, gradually excluding the trade of other powers. In 1668 Spain recognized the end of the Iberian Union and in exchange Portugal ceded Ceuta to the Spanish crown.

After the Portuguese were defeated by the Indian rulers Chimnaji Appa of the Maratha Empire and by Shivappa Nayaka of the Keladi Nayaka Kingdom and at the end of confrontations with the Dutch, Portugal was only able to cling onto Goa and several minor bases in India, and managed to regain territories in Brazil and Africa, but lost forever to prominence in Asia as trade was diverted through increasing numbers of English, Dutch and French trading posts. Thus, throughout the century, Brazil gained increasing importance to the empire, which exported brazilwood and sugar.
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