The final wave of annexations occurred under Lord Dalhousie who was the Governor-General from 1848 to 1856. He devised a policy that came to be known as the Doctrine of Lapse.

The doctrine declared that if an Indian ruler died without a male heir his kingdom would lapse, that is, become part of Company territory. Doctrine of Lapse led to a number of independent kingdoms being annexed to the British Empire. These were the states that were enjoying British protection but their rulers had died without leaving a natural heir to the throne. Their adopted sons could now no longer inherit the property or the pension which was granted to them by the British.

One kingdom after another was annexed simply by applying this doctrine: Satara (1848), Sambalpur (1850), Udaipur (1852), Nagpur (1853), Jhansi (1854) and Awadh (1856).