In the early 18th century, the Malabar Coast region of present-day Kerala was divided among several small chiefdoms. In the 1730s, Marthanda Varma, the ruler of Travancore, adopted an expansionist policy, and conquered several territories from these small states. This threatened the interests of the Dutch East India Company's command at Malabar, whose spice trade depended on procurement of spices from these states. The ruler of Deshinganad (present-day Kollam) requested the Dutch support against an impending attack from Travancore, stating that he would surrender to Marthanda Varma if the Dutch refused to help him.
The Dutch had monopoly contracts with the states of Peritally (Perakattavali or present-day Nedumangad), Eledattu Svarupam (present-day Kottarakkara), and Maruthurkulangara. After Travancore captured these states during 1733-1734, their procurement from these areas stopped completely, and the Dutch trade in Malabar suffered greatly. In 1736, Julius Valentyn Stein van Gollenesse, the Dutch commander at Kochi (Cochin)) requested Marthanda Varma to honour the Dutch monopoly contract with Peritally that had been signed in 1688. He pointed out that the Dutch had declined to join the expelled ruler of Peritally against Travancore, even though the ruler had offered his whole land to the Dutch for such support. In August 1736, Marthanda Varma agreed to send his envoys to meet the Dutch representatives, but refused to do so after these representatives reached the meeting place. Travancore continued to supply the black pepper from Peritally to other foreign traders. In September 1736, van Gollenesse requested the queen of Maruthurkulangara to honour her monopoly contract with the Dutch, but the queen refused to do so now that her state was under Travancore's suzerainty.
In January 1739, Gustaaf Willem van Imhoff, the Dutch Governor of Ceylon, visited Kochi to study the affairs of the Dutch command in Malabar on behalf of the Dutch East India Company's supreme government at Batavia. In his July 1739 report, van Imhoff noted that Marthanda Varma favoured the Company's competitors, and that his increasing power threatened the Dutch trade interests in the region. In another report, van Imhoff rejected a plan to pay market price for procurement of pepper, calling it unprofitable, and instead favoured military action to force the coastal rulers to fulfill their contract obligations. In a December 1739 report, van Imhoff wrote that the Dutch business in the region was in "complete ruin", and would have to be saved through "violent redress".
In 1739, the Dutch organised an alliance of the rulers of Kochi, Thekkumkur, Vadakkumkur, Purakkad, Kollam, and Kayamkulam. Meanwhile, the princess of Eledattu Svarupam escaped from imprisonment at Travancore, and reached Thekkumkur. Van Imhoff personally met Marthanda Varma, urging him to reinstate the princess, but Marthanda Varma refused the demand. Van Imhoff threatened to invade Travancore, but Marthanda Varma dismissed the threat, and replied that he had been thinking about invading Europe some day.