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Conflicts with Maratha Confederacy

The Maratha Empire under its new Peshwa Madhavrao I regained most of Indian subcontinent, twice defeating Tipu's father in 1764 and then in 1767. In 1767 Maratha Peshwa Madhavrao defeated both Hyder Ali and Tipu Sultan and entered Srirangapatna, the capital of Mysore. Hyder Ali accepted the authority of Madhavrao who gave him the title of Nawab of Mysore.

Subsequently, to escape the treaty, Tipu tried to take some Maratha forts in Southern India captured by in the previous war and also stopped the tribute to Marathas which was promised by Hyder Ali. This brought Tipu in direct conflict with the Marathas, leading to Maratha–Mysore War Conflicts between Mysore (under Tipu) and Marathas:

Conflict ended with Treaty of Gajendragad in March 1787, as per which Tipu returned all the territory captured by Hyder Ali to Maratha Empire. Tipu would elease Kalopant and return Adoni, Kittur, and Nargund to their previous rulers. Badami would be ceded to the Marathas and Tipu would also pay an annual tribute totaling 12 lakhs for an agreed period of 4 years to the Marathas. In return, Tipu Sultan would get all the region that he had captured during the war. This included Gajendragarh and Dharwar. The Marathas in return agreed to recognize his authority and to address Tipu sultan as "Nabob Tipu Sultan Futteh Ally Khan". However the Marathas ultimately reneged on the treaty and in the Fourth Anglo-Mysore War the Marathas presented their support to the British East India Company which helped the British to take over Mysore in 1799.