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The seeds for the war were laid when the Raja Marthanda Varma of Travancore began expanding his small kingdom by entering into territorial disputes with his neighbours, the Kingdoms of Kayamkulam and Kollam in 1731. These disputes began impacting the Dutch East India Company since they had factories for exporting pepper in these areas, collectively known as Dutch Malabar.
The destruction of crops in the war made it difficult for the Kollam merchants to fulfill their agreements with the Dutch. By 1733, VOC pepper exports dropped to less than half the quantities of 1730-31.
To help the three kingdoms mediate, the VOC deputed their emissaries, William Feling, Abraham Van De Welle, Ezechiel Rhabbi and Brouwer to Kayamkulam in May, 1734 to negotiate with the Raja, but they were unsuccessful.
The annexation of Eleyadathu Swarupam, the largest pepper producing area in southern Kerala by Travancore, in 1737, made a confrontation between Travancore and the VOC inevitable. The advent of British traders in this market also made the price of pepper soar. All of this forced the VOC to engage the Raja and thus began, in 1739, the Travancore–Dutch war that led to the Battle of Colachel.
Marthanda Varma crushed the opposition to his rule in his state and then absorbed the Kingdom of Attingal. His next target was Quilon, whose ruler Unni Kerala Varma was an ally of Odanad. The Kayamkulam Raja of Odanad formed an alliance with the rulers of Cochin, Purakkad and Vadakkumkur against Marthanda Varma. In 1734, the ruler of Odanad was killed in battle. Marthanda Varma moved against Kottarakara, the capital of the Elayadathy Swarupam. In 1739, Marthanda Varma refused to recognise the claim of the senior princess of the Kottarakara family to the succession, following the death of the chief of the Elayadathu Swarupam. She in turn, appealed to the Dutch East India Company. The Dutch were unhappy with the annexation of the kingdoms of their allies and a meeting between Marthanda Varma and the Dutch factor Van Imhoff aggravated the situation with Van Imhoff threatening to attack Travancore and Marthanda Varma threatening to carry the war not only into Dutch Indian territories, but to the Dutch Republic itself. In 1741, the Dutch formally installed the princess as the ruler of Kottarakara. A combined Kottarakara-Dutch army was decisively defeated by Marthanda Varma's army and the state of Elayadathu was annexed.
Marthanda Varma then captured the Dutch forts in the vicinity. A Dutch force under the command of De Lennoy landed at Colachel from Cochin and captured the country up to Kottar. Marthanda Varma marched south and prevented the capture of Kalkulam by the Dutch. When the Dutch retreated to their base in Colachel, Marthanda Varma pursued them and caught up with them on the 10 August 1741. In the battle of Colachel Marthanda Varma won a decisive victory over the Dutch and captured 24 officers including the commander De Lennoy. A pillar that celebrates the victory and gives details about the war still stands near the coast of Colachel. There are folk tales among the local Mukkuvar people about this war. The tale says among other things that the local Mukkuvar fishermen were asked to keep their cataraman oars in vertical position on the beach sand, with an inverted pot on top of it along the beach side, so that it looked like a long line of infantry with helmets stood along the beach in multiple rows. The fishermen also kept their oars on their shoulders so that they would appear like soldiers standing with their rifles. They were also instructed to make mock cannons using coconut trees as a diversion. The local fishermen co-operated extensively with the Travancori royal guards and captured the ship during this war.
The Dutch then concentrated their attention on Quilon and the combined Quilon-Kayamkulam-Dutch army seized Vamanapuram. The Travancori army under Ramayyan Dalawa chased them out of Vamanapuram and besieged them in the Quilon fort. The Kayamkulam minister Achutha Warrier led the successful defence, forcing the Travancore army to retreat and even occupying Kilimanur in 1742. Marthanda Varma himself took charge and divided the Travancore army in three squadrons, led by prince Rama Varma, Ramayyan Dalawa and De Lennoy. The allies were crushed in battle and forced to retreat to Quilon. The Travancore army then moved toward Kayamkulam and the Raja of Odanad sued for peace and signed the Treaty of Mannar in 1742.
However, to extricate himself out of the situation, the king of Odanad allied himself with Vadakkumkur, Thekkumkkur and Purakkad and violated the treaty obligations. The Travancore army occupied Kayamkulam in 1746 and the alliance of the Kayamkulam Raja gave Marthanda Varma a casus belli against the allies. The Ambalapuzha army led by Mathur Panikkar and Tekkedathu Bhattatiri defected to the Travancore army, and Marthanda Varma captured the state. In 1749 and 1750, Thekkumkur and Vadakkumkur were annexed.
Following these developments, the Dutch signed the Treaty of Mavelikkara in 1753 with Marthanda Varma, whereby they undertook a strict policy of non-intervention and repudiated their alliances with other Kerala powers.
In 1753, the northern parts of the newly created state of Travancore rebelled under the influences of the exiled rajas of Ambalapuzha, Thekkumkur and Vadakkumkur. The rebels were aided by the Maharaja of Cochin and the Dutch, and their army was commanded by Palliyil Idikkela Menon, a courtier of the Maharaja of Cochin. Towards the end of 1753, the Cochin army occupied Purakkad. On the 3 January 1754, the rebels, backed by the armies of Cochin and the Dutch, met the Travancore forces led by prince Rama Varma, Ramayyan Dalawa and De Lennoy in the battle of Anadeswaram. Even though the battle was tactically a stalemate, it was a strategic victory for Travancore, since the allies were forced to withdraw to Ambalapuzha. In the battle of Ambalapuzha, the allies were decisively defeated and a large number of Cochin nobility were killed or captured. The allied commander Idikkela Menon was captured and executed. The Travancore forces captured all of the Cochin territories up to Arukutti, Udayamperur in the south and Mamala in the east. The Cochin Raja sued for peace and in 1757, under the auspices of the Dutch and the Prime Minister of Cochin, Paliath Komi Achan a peace treaty was signed.