Creation of Jammu and Kashmir
Following the agreement with the British, the Sikh Darbar accused Gulab Singh of duplicity and stripped him of the Prime Ministership. The new Prime Minister, Lal Singh, offered Gulab Singh’s own territories to the British in lieu of the war indemnity, signalling a complete break with Gulab Singh. The British, however, demanded the entire hill territory between Beas and the Indus in lieu of the indemnity, which included the Kashmir Valley and Hazara in addition to Gulab Singh’s dominions. This was agreed. Having accepted the territory, the British then transferred it to Gulab Singh in the Treaty of Amritsar a week later, in return for a payment of 7.5 million rupees (half the indemnity demanded from the Sikhs). The British as well as the Sikh Empire recognized him as an independent Maharaja.
Lahore however instructed its governor of Kashmir, Sheikh Imam Uddin, to resist the hand-over of Kashmir. Gulab Singh’s emissary Wazir Lakhpat was killed by the Sikh army in Kashmir. Gulab Singh also faced rebellions in the provinces of Rajouri and Rampur. Beset by all sides, Gulab Singh appealed to the British to implement its treaty obligations. Subsequently, a combined force from Lahore, the British and the Dogras arrived in Kashmir and acquired the surrender of Kashmir. Wazir Lal Singh of the Sikh Darbar was dismissed for inciting rebellions. Gulab Singh entered Srinagar on 9 November 1846 as the Maharaja of Jammu and Kashmir.