How would Portugal and her colonies develop without this conflict?
For a POD I can think of two immediately that work.
1. No Iberian Union, either Sebastian does not perish in a war with Morocco, or someone other than Phillip manages to inherit the kingdom.
2. The Netherlands is not inherited by Philip, either the Austrians or another Habsburg relative of Charles should work.

So how would Portugal itself be affected, having not lost most of its revenue sources? Secondly, how about their eastern colonies? How does Portuguese rule in the much longer run affect India, the East Indies, and Ceylon? Would the latter two perhaps become Catholic or at least grow a sizeable minority? Tertiarily how about Brazil? The Portuguese were rather neglectful towards their chunk of South America prior to the loss of their spice colonies. So would they still hold onto it, or at least put it to better usage later on?
Then there's the Dutch. How would they and the rest of Europe be affected by the probable lack of their empire? Would we ever see major companies like the VOC?
If there are any other changes that you know of, I'd love to hear them.
 
Both PODs give a pretty large margin for butterflies so it’s hard to predict what would happen and it depends on what the Dutch do. I’m more than sure they or someone else (French, English, Danish, etc.) would try their luck on building empires by the 17th Century because why wouldn’t they try to cut costs or even get larger profits? And if a different Habsburg gets the Netherlands what’s to say he wouldn’t try to get his share of a colonial empire? Now if a commercial war like the one you want to avoid or the English-Dutch Wars starts later, Portugal will likely be in a better position to fight it, especially when the Iberian Union never happened.

My guess is that Ceylon can very well be fully controlled by Portugal, I think in the 17th Century there are plenty of opportunities to do so and if they control the whole coast, they control the island. It’s likely that Catholicism becomes the main religion on the island. I also believe Portugal could secure the control of the Moluccan Islands directly or indirectly but they might lose this area when a colonial war begins. The Straits of Malacca are also pretty bitter and will keep attacking Malacca.

Portugal’s hold in India will likely be firmer too, it would keep large chunks of lands under its control to at least the 19th or 20th Century and maybe be able to better face the Marathas and Mysore. Would they get the whole subcontinent? I’m not sure but if they do it’s likely ending like the British Raj. I think Goa, Mumbai, Cochim would have large Catholic populations if they are not lost.

With Brazil I see them keep searching for precious metals and take more interest once they find the mines which if I’m not mistaken are still Portuguese according to Tordesilhas but it’s likely that they will not expand beyond it.

If the Spanish do not have to fight the 80 Years War then they will remain powerful throughout two more centuries maybe? That’s something to consider on its own if the second POD is chosen but I’m not going to delve too deep into it. I also think that companies like VOC would appear, the English had lookalikes for quite some time if I’m not mistaken and the company in question could appear anyway.
 
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