In March 1752, Damaji finally agreed to abandon Dabhades in favour of the Peshwa.
In return, he was made the Maratha chief of Gujarat, and the Peshwa offered him assistance in expelling the Mughals from Gujarat.
Gaekwad promised to pay an annual tribute of ₹ 525,000 to Peshwa in addition to a one-time payment of ₹ 1,500,000.
He was also asked to maintain a cavalry of 20,000 horses in service of the Peshwa.
The Dabhade family was respectfully removed from power, and provided an annual maintenance expense by Gaekwad.

On 10 December 1752, Peshwa Balaji Baji Rao dispatched an army from Pune to Gujarat, under the commandment of Raghunathrao.
This army was joined by Damaji's troops, resulting in the formation of a 50,000-strong Maratha army.
The Marathas sieged Ahmedabad, where the Mughal Governor Jawan Mard Khan Babi put up a strong defence.
Babi surrendered Ahmedabad in March 1753 after a long siege.
The Peshwa appointed Shripatrao Bapuji as the Governor of Ahmedabad; a part of the city was given to Damaji.
In July 1756, the Nawab of Cambay Momin Khan invaded Ahmedabad with Mughal support, while Shripatrao was away in Pune.
The Peshwa sent a force led by Sadashiv Shenvi, which regained control of Ahmedabad with Damaji's help.
Subsequently, the town remained under the Marathas until the First Anglo-Maratha War.
The British later handed it over to Damaji's son Fateh Singh Rao Gaekwad after the Treaty of Salbai in 1782.

He died at Patan on 18 August 1768.
In March 1752, Damaji finally agreed to abandon Dabhades in favour of the Peshwa. In return, he was made the Maratha chief of Gujarat, and the Peshwa offered him assistance in expelling the Mughals from Gujarat. Gaekwad promised to pay an annual tribute of ₹ 525,000 to Peshwa in addition to a one-time payment of ₹ 1,500,000. He was also asked to maintain a cavalry of 20,000 horses in service of the Peshwa. The Dabhade family was respectfully removed from power, and provided an annual maintenance expense by Gaekwad.
On 10 December 1752, Peshwa Balaji Baji Rao dispatched an army from Pune to Gujarat, under the commandment of Raghunathrao. This army was joined by Damaji's troops, resulting in the formation of a 50,000-strong Maratha army. The Marathas sieged Ahmedabad, where the Mughal Governor Jawan Mard Khan Babi put up a strong defence. Babi surrendered Ahmedabad in March 1753 after a long siege. The Peshwa appointed Shripatrao Bapuji as the Governor of Ahmedabad; a part of the city was given to Damaji. In July 1756, the Nawab of Cambay Momin Khan invaded Ahmedabad with Mughal support, while Shripatrao was away in Pune. The Peshwa sent a force led by Sadashiv Shenvi, which regained control of Ahmedabad with Damaji's help. Subsequently, the town remained under the Marathas until the First Anglo-Maratha War. The British later handed it over to Damaji's son Fateh Singh Rao Gaekwad after the Treaty of Salbai in 1782.
He died at Patan on 18 August 1768.
Damaji Rao Gaekwad