The new king, Shah Shoja', ascended the throne in 1803. The chiefs had become powerful and unruly, and the outlying provinces were asserting their independence. The Sikhs of the Punjab were encroaching upon Afghan territories from the east, while the Persians were threatening from the west.

Napoleon, then at the zenith of his power in Europe, proposed to Alexander I of Russia a combined invasion of India. A British mission, headed by Mountstuart Elphinstone, met Shah Shoja' at Peshawar to discuss mutual defense against this threat, which never developed. A treaty of friendship was concluded (June 7, 1809), the shah promising to oppose the passage of foreign troops through his dominions. Shortly after the mission left Peshawar news was received that Kabul had been occupied by the forces of Mahmud and Fath Khan. Shah Shoja''s troops were routed, and he withdrew from Afghanistan and found asylum with the British at Ludhiana in 1815.