Sir John Child, whose autocratic behavior as president of Surat, where the British East India Company had established their first Indian factory (trading post) in 1612), had led in 1683 to Keigwin's unsuccessful rebellion in Bombay, had been made a baronet in 1684.

The first person to be placed in control of all the Company's trading establishments in India, he is, like Sir Josiah Child, the powerful governor of the company in London, utterly unscrupulous and has a passion for intrigue (the two Childs are stated by the Oxford Dictionary of National Biography to be unrelated).

Following orders from London, Child becomes involved in war with Aurangzeb, whose troops capture Surat and force Child to make peace.

One of the peace terms requires Child to leave India, but he dies in 1690 while the matter is still pending.

Narayanrao (August 10, 1755 – August 30, 1773) had become Peshwa of the Maratha Empire after the death of his brother Madhavrao Peshwa in 1772.

Madhavrao had been a minor when appointed Peshwa.

Raghunathrao, appointed as the regent to the young Peshwa, had soon fallen out of favor with Madhavrao and even tried to conspire against him by joining the Nizam of Hyderabad against the Peshwa.

The alliance had been defeated at Ghodegaon, and Raghunathrao had been placed under house arrest.

After Madhavrao I's death, Raghunathrao had been released from house arrest.

He then became the regent of Madhavrao's younger brother Narayanrao.

Together with his wife Anandibai, he has his nephew Narayanrao murdered by his palace guards in August 1773.

Narayanrao's widow, Gangabai, had given birth to a posthumous son, who was legal heir to the throne.

The newborn infant is named 'Sawai' Madhavrao (Sawai means "One and a Quarter").

Twelve Maratha chiefs, led by Nana Phadnavis, direct an effort to name the infant as the new Peshwa and rule under him as regents.

Raghunathrao had been tried, convicted, and sentenced to death by the justice Ram Shastri Prabhune but the sentence has never been carried out.

At Kasegaon near Pandharpur the first battle between the Baarbhai and Raghobadada takes place in 1774.

Raghunathrao, unwilling to give up his position of power, goes to Khambhat with hope of getting help from the British, who do not help but transport him to Surat from their ship. 

Here he signs the Treaty of Surat on March 6, 1775.

According to the treaty, Raghunathrao cedes the territories of Salsette and Bassein to the British, along with part of the revenues from Surat and Bharuch districts.

In return, the British promise  to provide Raghunathrao with twenty-five hundred soldiers.