Aware of the high stakes involved in seizing control over the Indus for navigation, the British persuaded two Sindh amirs, Rustam Khan, the Amir of Khanpur, and Murad Ali of Hyderabad, to enter into a one-sided treaty and act as proxies to throw the Indus open to British military and political penetration. Under the treaty, signed reluctantly by the Sindh amirs, the British obtained the right to take the final decision regarding taxation duties on goods passing through the Indus to the Arabian Sea.

This was a variation of gunboat diplomacy with which the advancing British seized the veto in their hands to control the entire trade flow from Central Asia to Sindh, and thereby the right to manipulate the economies of the regions and the states, including that of Ranjit Singh, whose removal was not on their agenda. The next step was to coerce Ranjit Singh to sign the treaty, opening the Sutlej to commerce as well.

The British agent, Captain Wade, told the Maharaja that the expansion of trade in his dominions would result only after signing the treaty. But the British agencies had disrupted the economy of the Sikh state by imposing a heavy toll of Rs. 570 on the boats carrying large loads.

This included the pashmina shawl output from 20,000 looms that were operating in Kashmir. The shawls were exported mainly to the European market, especially France, where they posed stiff competition to woollen manufacturers from Britain.