- The policy aimed to defend the Company's own territories by strategically placing buffer states around them. - These buffer states were either protected by the Company or compelled to maintain their own defence against potential external enemies. - The idea was to keep the potential enemy at a distance from the Company's borders by fighting wars on the frontiers of friendly states. - Examples include Hastings' policy towards Awadh (treating it as a buffer state against the Marathas) and his interactions with the Maratha Confederacy.