The outbreak in 1756 of the Seven Years’ War in Europe resulted in renewed conflict between the French and British forces in India. The Third Carnatic War spread beyond southern India and into Bengal where British forces captured the French settlement of Chandernagore (now Chandannagar) in 1757.
However, the war was decided in the south, as British commander Sir Eyre Coote decisively defeated the French under the Comte de Lally at the Battle of Wandiwash in 1760. After Wandiwash, the French capital of Pondicherry fell to the British in 1761.
The war concluded with the signing of the 1763 Treaty of Paris, which returned Chandernagore and Pondichéry to France, and allowed the French to have “factories” (trading posts) in India but forbade French traders from administering them.
The French agreed to support British client governments, thus ending French ambitions of an Indian empire and making the British the dominant foreign power in India. The anomaly of Clive’s position with regard to the Nawab, however, still continued. Without any formal rights or prerogatives, he exercised an effective control over the actions of Mir Jafar, and, in particular, he prevented the latter from ruining some notable Hindu officials such as Rai Durlabh, the Diwan, and Ram Narayan, the governor of- Bihar.