This chapter continues the discussion of the evolving nature of the British approach to the princely states leading up to Indian independence and British efforts to create an All-India Federation under the Government of India Act of 1935, intended to ensure British control over India and undermine the strength of the Indian nationalist movement. It first discusses the intention of the British government in introducing plans for the All-India Federation and then analyzes the reasons behind the princes’ opposition to it, which ultimately blocked the federation from being implemented. The discussion of the princes’ refusal to accede to the Indian federation demonstrates their resistance to any external constitutional changes which might threaten their direct relationship with the British Crown, whose recognition as the paramount power in India served as the source of the princes’ sovereignty. This further demonstrates the princely order’s commitment to the layered sovereignty of British indirect rule and their opposition to any changes in the political status quo within the changing political environment of India, even in the face of efforts by British authorities to reform it. Under the federation scheme, the princes held grave concerns about the future strength of the central government and the extent of its authority over the princely states that acceded to it. Thus the federation, controlled by the political parties within British India, would become an intermediary between the princely states and the British government and could infringe on their political autonomy and sovereignty.