Sambhaji is granted the title of Raja and stationed at Aurangabad

Following the Treaty of Purandar in 1665 and Chhatrapati Shivaji Maharaj's daring escape from imperial detention in Agra in August 1666, relations between the young Maratha state and the Mughal Empire were severely strained. However, both empires required a period of tactical consolidation. Imperial Emperor Aurangzeb was preoccupied with Afghan rebellions on the northwest frontier, while Shivaji Maharaj needed time to rebuild his military infrastructure, restructure administration, and fortify his Swarajya territories without immediately facing another massive imperial invasion.

To secure this crucial breathing space, Shivaji initiated diplomatic negotiations through Maharaja Jaswant Singh of Marwar and Prince Muhammad Mu'azzam (later Emperor Bahadur Shah I), who was then serving as the Mughal Viceroy of the Deccan. In early 1668, a formal settlement was reached. Emperor Aurangzeb agreed to recognize young Sambhaji Maharaj—who was only eleven years old at the time—with the high nobility title of 'Raja' and assigned him a Mughal mansab (military rank) of 5,000 horsemen (Panch Hazari). In return, the Marathas acknowledged nominal imperial suzerainty.

On March 9, 1668, Prince Sambhaji arrived at Aurangabad, the administrative headquarters of Mughal power in the Deccan, to reside at the viceregal court. Because Sambhaji was still a child, his father appointed seasoned Maratha administrators and military commanders to accompany him, including Senapati Prataprao Gujar and the diplomat Niraji Raoji. These experienced officers managed the administrative affairs of Sambhaji's assigned jagir (revenue estate) in Berar (Varhad), which had been granted by the imperial crown to cover the maintenance expenses of his 1,000-horse contingent stationed at Aurangabad.

Sambhaji was received at Prince Mu'azzam's court with high ceremony and imperial honors. For several months, the young prince lived in Aurangabad, observing firsthand the court rituals, political rivalries, and administrative systems of the Mughal Empire. This period provided the young heir with indispensable diplomatic experience and an intimate understanding of imperial court psychology, which would later prove vital during his own sovereign reign as Chhatrapati. However, this peace was fundamentally a tactical truce, and within two years, escalating political tensions would break the arrangement entirely.