By the 18th century, the Portuguese in India lost their commercial influence, though some of them still carried on trade in their individual capacity and many took to piracy and robbery. The decline of the Portuguese was brought about by several factors.
Causes for Decline of Portuguese
Emergence of powerful dynasties
The local advantages gained by the Portuguese in India were reduced with the emergence of powerful dynasties in Egypt, Persia, and North India and the rise of the turbulent Marathas as their immediate neighbours. (The Marathas captured Salsette and Bassein in 1739 from the Portuguese.)
Religious policies of the Portuguese
The religious policies of the Portuguese, such as the activities of the Jesuits, gave rise to political fears. Their antagonism for the Muslims apart, the Portuguese policy of conversion to Christianity made Hindus also resentful.
The Portuguese adopted forced inter-marriage & conversion to the Christian faith which made the
natives hostile.
Dishonest trade practices
Their dishonest trade practices also evoked a strong reaction. The Portuguese earned notoriety as sea pirates.
Arrogance and violence
Their arrogance and violence brought them the animosity of the rulers of small states and the imperial Mughals as well.
Discovery of Brazil
The discovery of Brazil diverted colonising activities of Portugal to the West.
Union of Spain and Portugal
The union of the two kingdoms of Spain and Portugal in 1580–81, dragging the smaller kingdom into Spain’s wars with England and Holland, badly affected Portuguese monopoly of trade in India. It also neglected the Portuguese interest in India.
Monopoly of knowledge of the sea route to India could not remain a secret
The earlier monopoly of knowledge of the sea route to India held by the Portuguese could not remain a secret forever; soon enough the Dutch and the English, who were learning the skills of ocean navigation, also learnt of it.
Dutch and the English had greater resources
As new trading communities from Europe arrived in India, there began a fierce rivalry among them. In this struggle, the Portuguese had to give way to the more powerful and enterprising competitors. The Dutch and the English had greater resources and more compulsions to expand overseas, and they overcame the Portuguese resistance. One by one, the Portuguese possessions fell to its opponents.
Goa lost its importance as a port
Goa which remained with the Portuguese had lost its importance as a port after the fall of the Vijayanagara empire and soon it did not matter in whose possession it was. The spice trade came under the control of the Dutch, and Goa was superseded by Brazil as the economic centre of the overseas empire of Portugal. In 1683, after two naval assaults, the Marathas invaded Goa.
Successors of Albuquerque were weak & inefficient
After Albuquerque the Portuguese administration in India became inefficient because his successor were
weak & inefficient.
Corruption and malpractice
The Portuguese officials were neglected by the home government. Their salaries were low. Thus they
indulged in corruption and malpractice.
Must read: Significance of the Portuguese rule in India
External link: https://www.britannica.com/place/Portuguese-India/The-decline-of-Portuguese-India