The druk desi, failing to receive help from Tibet, signs a Treaty of Peace with the British East India Company on April 25, 1774.

Bhutan agrees to return to its pre-1730 boundaries, pays a symbolic tribute of five horses to Britain, and, among other concessions, allows the British to harvest timber in Bhutan.

Subsequent missions to Bhutan are made by the British in 1776, 1777, and 1783, and commerce is opened between British India and Bhutan and, for a short time, Tibet.

In 1784 the British turn over to Bhutanese control the Bengal Duars territory, where boundaries are poorly defined.

As in its other foreign territories, Bhutan leaves administration of the Bengal Duars territory to local officials and collects its revenues.

Although major trade and political relations fail to develop between Bhutan and Britain, the British have replaced the Tibetans as the major external threat.