The correct answer is: b) Subject to British control in foreign affairs.
The British policy of ‘Paramountcy’ meant that the princely states were subject to British control in foreign affairs, but were otherwise autonomous. This meant that the British had control over the princely states’ relations with other countries, but the states were free to govern themselves in all other matters.
Option a) is incorrect because the princely states were not fully independent. They were subject to British control in foreign affairs.
Option b) is correct because the princely states were subject to British control in foreign affairs.
Option c) is incorrect because the princely states were not merged into British India. They were autonomous states.
Option d) is incorrect because the princely states were not granted equal status as provinces. They were autonomous states.