My approach was slightly different, so I will try do add my experience.
I played medium/hard - just for fun.
I do not think that your units are so bad. In the beginning, your hindu swords and muskets are good enough to fight their opponenets from Mysore and Mughal. I even saw them stand a cavalry charge. The swordsmen are excellent to assault fortresses. Your early lancers are good, also. Good enough to chase routing enemies, to make flanking assaults. I found one lancer unit successful against six peasant units.
And there is also your artillery, as good as any in the game.
Alright, the elephants are bad, really bad, slow, weak bunch and vulnarable. Keep them behind the lines, where they can give moral and some extra fire power. They are also good against camels, cause they fear elephants.
The strategy was similar to the others, but slower. India is overpopulated and there is no change in "blitzing". Therefore, slow down. In the first turn, I killed the free enemy army and laid siege on the two cities in the north-northeast.
Usually the enemy salles and you can slaighter them. So on turn two I took Hyderabad. I kept on besiegiing the other town, though.
I also kept on building new troops, esp. in the south.
Usually, Mysore attacks Goa and takes it. As soon as Mysorian soldiers penetrate Portugese territory, you should assault the besieged town. As soon as Mysore whipes out the Port. colony, it is time to attack them - attack both provinves at a time. Move your troops from the northern front and let them attack Goa with some new formations from your capitol.
Also let your troops from the south march into the heart of Mysore. This detachment may be weak, but you can always withdraw and lure troops out of the city. Rely in your defense and weaken the troops of Mysore. As sson as the northern army did her job, it can move to Mysore and finish this enemy.
Now it is time to relax. Normally, Mughal kept on attacking your new provinces in the north with lots of unskilled troop. Good chance to get experience with simple kills.
Make peace with Mughal, together with a trade agreement. Then reduce your army to a couple of experienced veterans. Money is an issue and now it is time to build up your towns.
Trade is the answer to the money problem, as you have many trade ports and can trade with many nations. Use this and do not forget the Turks and the Americas.
However, trade is not reliable. You will see this as soon as there is war with GB.
I reduced my miöitary expenses so I could cover them with tax income. Trade income was spend for building.
After some time, the Brits will attack you. Rely on some experienced units together with your recruiting capacity. The British are not so powerful and usually they have only one stack. They neber managed to take one of my towns.
Mughal will attack you, but you can repel them easily. As soon as the Brits are done, you can move your now experienced troops northwards. Take the provinces in the Indian Sea, to cut of their sea trade and their ability to build warships. You have to go slowly, as you have to convert the peasants to Hinduism on the way. Pretty soon you should be able to take the rest. Persia declared war, but did not bother. I soon saw Ottoman troops taking their provinces.
The Brits will return. I never managed to defeat them in the Sea, they never managed to beat me on land. After some time a gave them money to make peace and trade agreement. It worked.
Now, controoling all of india, lots of money came.
Still keep your army as small as possible, while you increase your economy. You should be able to trade with everyone. Now it is time to build up a marine and to seize trade points.
After this invade Cylon. Not a big deal. It might bring you to war with GB again. Make peace with the Brits and with the Dutch by offering money and technology. Now you control all of India and all of your main objectives.
By the way, do not too much research, at least if you want to keep absolute monarchy.
The end of the game is easy. I invaded the Pirate islands in the Mericas as well as Morroco. Then I took France and the Lower Louisianna and reached the target in the fifties.
Only trouble is unrest at home. Keep a decent army and burn down schools if you do not need them any longer. That is all!
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