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In the Andhra land Satavahana king Simuka overthrew the last Kanva king in 30 BC and according to the Puranas reigned for 23 years. For three centuries the kingdom of the Satavahanas flourished except for a brief invasion by the Shaka clan of Kshaharata led by Bhumaka and Nahapana in the early 2nd century CE. The latter was overthrown as the Satavahana kingdom with its caste system was restored by Gautamiputra Satakarni about 125 CE; his mother claimed he rooted out Shakas (Scythians), Yavanas (Greeks and Romans), and Pahlavas (Parthians), and records praised Gautamiputra for being virtuous, concerned about his subjects, taxing them justly, and stopping the mixing of castes. His successor Pulumavi ruled for 29 years and extended Satavahana power to the mouths of the Krishna River.

Trade with the Romans was active from the first century CE when Pliny complained that 550 million sesterces went to India annually, mostly for luxuries like spices, jewels, textiles, and exotic animals. Governors, who became independent when the Satavahana kingdom collapsed, ruled the Satavahana kingdom in small provinces. An inscription dated 150 CE credits Shaka ruler Rudradaman with supporting the cultural arts and Sanskrit literature and repairing the dam built by the Mauryans. Rudradaman took back most of the territory the Satavahana king Gautamiputra captured from Nahapana, and he also conquered the Yaudheya tribes in Rajasthan. However, in the next century the warlike Yaudheyas became more powerful. The indigenous Nagas also were aggressive toward Shaka satraps in the 3rd century. In the Deccan after the Satavahanas, Takataka kings ruled from the 3rd century to the 6th.

Probably in the second half of the first century BC Kharavela conquered much territory for Kalinga in southeastern India and patronized Jainism. He was said to have spent much money for the welfare of his subjects and had the canal enlarged that had been built three centuries before by the Nandas. In addition to a large palace, a monastery was built at Pabhara, and caves were excavated for the Jains.

Late in the 1st century BC a line of Iranian kings known as the Pahlavas ruled northwest India. The Shaka (Scythian) Maues, who ruled for about 40 years until 22 CE, broke relations with the Iranians and claimed to be the great king of kings himself. Maues was succeeded by three Shaka kings whose reigns overlapped. The Parthian Gondophernes seems to have driven the last Greek king Hermaeus out of the Kabul valley and taken over Gandhara from the Shakas, and it was said that he received at his court Jesus' disciple Thomas. Evidence indicates that Thomas also traveled to Malabar about 52 CE and established Syrian churches on the west coast before crossing to preach on the east coast around Madras, where he was opposed and killed in 68.

However, the Pahlavas were soon driven out by Scythians Chinese historians called the Yue-zhi. Their Kushana tribal chief Kujula Kadphises, his son Vima Kadphises, and Kanishka (r. 78-101) gained control of the western half of northern India by 79 CE. According to Chinese history one of these kings demanded to marry a Han princess, but the Chinese led by Ban Chao defeated the Kushanas at the end of the 1st century. Kanishka, considered the founder of the Shaka era, supported Buddhism, which held its 4th council in Kashmir during his reign. A new form of Mahayana Buddhism with the compassionate saints (bodhisattvas) helping to save others was spreading in the north, while the traditional Theravada of saints (arhats) working for their own enlightenment held strong in southern regions. Several great Buddhist philosophers were favored at Kanishka's court, including Parshva, Vasumitra, and Ashvaghosha; Buddhist missions were sent to central Asia and China, and Kanishka was said to have died fighting in central Asia. Kushana power decreased after the reign of Vasudeva (145-176), and they became vassals in the 3rd century after being defeated by Shapur I of the Persian Sasanian dynasty.

In the great vehicle or way of Mahayana Buddhism the saint (bodhisattva) is concerned with the virtues of benevolence, character, patience, perseverance, and meditation, determined to help all souls attain nirvana. This doctrine is found in the Sanskrit Surangama Sutra of the first century CE. In a dialog between the Buddha and Ananda before a large gathering of monks, the Buddha declares that keeping the precepts depends on concentration, which enhances meditation and develops intelligence and wisdom. He emphasizes that the most important allurement to overcome is sexual thought, desire, and indulgence. The next allurement is pride of ego, which makes one prone to be unkind, unjust, and cruel. Unless one can control the mind so that even the thought of killing or brutality is abhorrent, one will never escape the bondage of the world. Killing and eating flesh must be stopped. No teaching that is unkind can be the teaching of the Buddha. Another precept is to refrain from coveting and stealing, and the fourth is not to deceive or tell lies. In addition to the three poisons of lust, hatred, and infatuation, one must curtail falsehood, slander, obscene words, and flattery.

Ashvaghosha was the son of a Brahmin and at first traveled around arguing against Buddhism until he was converted, probably by Parshva. Ashvaghosha wrote the earliest Sanskrit drama still partially extant; in the Shariputra-prakarana the Buddha converts Maudgalyayana and Sariputra by philosophical discussion. His poem Buddhacharita describes the life and teachings of the Buddha very beautifully.

The Awakening of Faith in the Mahayana is ascribed to Ashvaghosha. That treatise distinguishes two aspects of the soul as suchness (bhutatathata) and the cycle of birth and death (samsara). The soul as suchness is one with all things, but this cannot be described with any attributes. This is negative in its emptiness (sunyata) but positive as eternally transcendent of all intellectual categories. Samsara comes forth from this ultimate reality. Multiple things are produced when the mind is disturbed, but they disappear when the mind is quiet. The separate ego-consciousness is nourished by emotional and mental prejudices (ashrava). Since all beings have suchness, they can receive instructions from all Buddhas and Bodhisattvas and receive benefits from them. By the purity of enlightenment they can destroy hindrances and experience insight into the oneness of the universe. All Buddhas feel compassion for all beings, treating others as themselves, and they practice virtue and good deeds for the universal salvation of humanity in the future, recognizing equality among people and not clinging to individual existence. Thus the prejudices and inequities of the caste system were strongly criticized.

Mahayana texts were usually written in Sanskrit instead of Pali, and Lokakshema translated the Prajnaparamita into Chinese as early as 179 CE. This dialog of 8,000 lines in which the Buddha spoke for himself and through Subhuti with his disciples was also summarized in verse. The topic is perfect wisdom. Bodhisattvas are described as having an even and friendly mind, being amenable, straight, soft-spoken, free of perceiving multiplicity, and free of self-interest. Detached, they do not want gain or fame, and their hearts are not overcome by anger nor do they seek a livelihood in the wrong way. Like an unstained lotus in the water they return from concentration to the sense world to mature beings and purify the field with compassion for all living things. Having renounced a heavenly reward they serve the entire world, like a mother taking care of her child. Thought produced is dedicated to enlightenment. They do not wish to release themselves in a private nirvana but become the world's resting place by learning not to embrace anything. With a mind full of friendliness and compassion, seeing countless beings with heavenly vision as like creatures on the way to slaughter, a Bodhisattva impartially endeavors to release them from their suffering by working for the welfare of all beings.

Nagarjuna was also born into a Brahmin family and in the 2nd century CE founded the Madhyamika (Middle Path) school of Mahayana Buddhism, although he was concerned about Hinayanists too. He was a stern disciplinarian and expelled many monks from the community at Nalanda for not observing the rules. A division among his followers led to the development of the Yogachara school of philosophy. Nagarjuna taught that all things are empty, but he answered critics that this does not deny reality but explains how the world happens. Only from the absolute point of view is there no birth or annihilation. The Buddha and all beings are like the sky and are of one nature. All things are nothing but mind established as phantoms; thus blissful or evil existence matures according to good or evil actions.

Nagarjuna discussed ethics in his Suhrllekha. He considered ethics faultless and sublime as the ground of all, like the earth. Aware that riches are unstable and void, one should give; for there is no better friend than giving. He recommended the transcendental virtues of charity, patience, energy, meditation, and wisdom, while warning against avarice, deceit, illusion, lust, indolence, pride, greed, and hatred. Attaining patience by renouncing anger he felt was the most difficult. One should look on another's wife like one's mother, daughter or sister. It is more heroic to conquer the objects of the six senses than a mass of enemies in battle. Those who know the world are equal to the eight conditions of gain and loss, happiness and suffering, fame and dishonor, and blame and praise. A woman (or man), who is gentle as a sister, winning as a friend, caring as a mother, and obedient as a servant, one should honor as a guardian goddess (god). He suggested meditating on kindness, pity, joy, and equanimity, abandoning desire, reflection, happiness, and pain. The aggregates of form, perception, feeling, will, and consciousness arise from ignorance. One is fettered by attachment to religious ceremonies, wrong views, and doubt. One should annihilate desire as one would extinguish a fire in one's clothes or head. Wisdom and concentration go together, and for the one who has them the sea of existence is like a grove.

During the frequent wars that preceded the Gupta empire in the 4th century the Text of the Excellent Golden Light (Suvarnaprabhasottama Sutra) indicated the Buddhist attitude toward this fighting. Everyone should be protected from invasion in peace and prosperity. While turning back their enemies, one should create in the earthly kings a desire to avoid fighting, attacking, and quarreling with neighbors. When the kings are contented with their own territories, they will not attack others. They will gain their thrones by their past merit and not show their mettle by wasting provinces; thinking of mutual welfare, they will be prosperous, well fed, pleasant, and populous. However, when a king disregards evil done in his own kingdom and does not punish criminals, injustice, fraud, and strife will increase in the land. Such a land afflicted with terrible crimes falls into the power of the enemy, destroying property, families, and wealth, as men ruin each other with deceit. Such a king who angers the gods will find his kingdom perishing; but the king who distinguishes good actions from evil shows the results of karma and is ordained by the gods to preserve justice by putting down rogues and criminals in his domain even to giving up his life rather than the jewel of justice.

On the island of Lanka (Ceylon) Vattagamani recovered his kingdom from the Tamil invasion in 29 BC and ruled for twelve years during which the extensive Buddhist Tripitaka was written down along with the Atthakatha. Vattagamani was succeeded by two sons, but the second had Buddhist sanctuaries destroyed. His wife Anula poisoned him and several succeeding kings; then she was killed by Kutkannatissa (r. 16-38 CE). Many kings ruled Lanka during a series of succession fights until Vasabha (r. 127-171) of the Lambakanna sect established a new dynasty that would rule more than three centuries. His son and his two brothers divided the island briefly, as the Chola king Karikala invaded; but Gajabahu (r. 174-196) united the country and invaded the Chola territory.

A treaty established friendly relations, and Hindu temples were built on Lanka, including some for the chaste goddess immortalized in the Silappadikaram. Lanka experienced peace and prosperity for 72 years, and King Voharikatissa (r. 269-291) even abolished the punishment of mutilation. However, when the Buddhist schism divided people, the king suppressed the new Mahayana doctrine and banished its followers. Caught in an intrigue with the queen, his brother Abhayanaga (r. 291-299) fled to India, and then with Tamils invaded Lanka, defeated and killed his brother, took the throne, and married the queen. Gothabhaya (r. 309-322) persecuted the new Vetulya doctrine supported by monks at Abhayagirivihara by having sixty monks branded and banished. Their accounts of this cruelty led Sanghamitta to tutor the princes in such a way that when Mahasena (r. 334-362) became king, he confiscated property from the traditional Mahavihara monastery and gave it to Abhayagirivihara.

The Tamil epic poem called The Ankle Bracelet (Silappadikaram) was written about 200 CE by Prince Ilango Adigal, brother of King Shenguttuvan, who ruled the western coast of south India. Kovalan, the son of a wealthy merchant in Puhar, marries Kannaki, the beautiful daughter of a wealthy shipowner. The enchanting Madhavi dances so well for the king that he gives her a wreath that she sells to Kovalan for a thousand gold kalanjus, making her his mistress. They sing songs to each other of love and lust until he notices hints of her other loves; so he withdraws his hands from her body and departs. Kovalan returns to his wife in shame for losing his wealth; but she gives him her valuable ankle bracelet, and they decide to travel to Madurai. Kannaki courageously accompanies him although it causes her feet to bleed. They are joined by the saintly woman Kavundi, and like good Jains they try not to step on living creatures as they walk. They meet a saintly man who tells them that no one can escape reaping the harvest grown from the seeds of one's actions.

In the woods a charming nymph tries to tempt Kovalan with a message from Madhavi, but his prayer causes her to confess and run away. A soothsayer calls Kannaki the queen of the southern Tamil land, but she only smiles at such ignorance. A priest brings a message from Madhavi asking for forgiveness and noting his leaving his parents. Kovalan has the letter sent to his parents to relieve their anguish. Leaving his wife with the saint Kavundi, Kovalan goes to visit the merchants, while Kavundi warns him that the merits of his previous lives have been exhausted; they must prepare for misfortune. Reaping what is sown, many fall into predicaments from pursuing women, wealth, and pleasure; thus sages renounce all desire for worldly things. A Brahmin tells Kovalan that Madhavi has given birth to his baby girl; he has done good deeds in the past, but he warns him he must pay for some errors committed in a past existence. Kovalan feels bad for wasting his youth and neglecting his parents. He goes to town to sell the ankle bracelet; a goldsmith tells him only the queen can purchase it, but the goldsmith tells King Korkai that he has found the man who stole his royal anklet. The king orders the thief put to death, and Kovalan is killed with a sword.

Kannaki weeping observes the spirit of her husband rise into the air, telling her to stay in life. She goes to King Korkai and proves her husband did not steal the anklet by showing him their anklet has gems not pearls. Filled with remorse for violating justice at the word of a goldsmith, the king dies, followed quickly in this by his queen. Kannaki goes out and curses the town as she walks around the city three times. Then she tears her left breast from her body and throws it in the dirt. A god of fire appears to burn the city, but she asks him to spare Brahmins, good men, cows, truthful women, cripples, the old, and children, while destroying evildoers. As the four genii who protect the four castes of Madurai depart, a conflagration breaks out. The goddess of Madurai explains to Kannaki that in a past life as Bharata her husband had renounced nonviolence and caused Sangaman to be beheaded, believing he was a spy. His wife cursed the killer, and now that action bore fruit. Kannaki wanders desolate for two weeks, confessing her crime. Then the king of heaven proclaims her a saint, and she ascends with Kovalan in a divine chariot.

King Shenguttuvan, who had conquered Kadambu, leaves Vanji and hears stories about a woman with a breast torn off suffering agony and how Madurai was destroyed. The king decides to march north to bring back a great stone on the crowned heads of two kings, Kanaka and Vijaya, who had criticized him; the stone is to be carved into the image of the beloved goddess. His army crosses the Ganges and defeats the northern kings. The saintly Kavundi fasts to death. The fathers of Kovalan and Kannaki both give up their wealth and join religious orders, and Madhavi goes into a Buddhist nunnery, followed later in this by her daughter. Madalan advises King Shenguttuvan to give up anger and criticizes him for contributing to war, causing the king to release prisoners and refund taxes. The Chola king notes how the faithful wife has proved the Tamil proverb that the virtue of women is of no use if the king fails to establish justice. Finally the author himself appears in the court of his brother Shenguttuvan and gives a list of moral precepts that begins:

Seek God and serve those who are near Him.
Do not tell lies.
Avoid slander.
Avoid eating the flesh of animals.
Do not cause pain to any living thing.
Be charitable, and observe fast days.
Never forget the good others have done to you.1

In a preamble added by a later commentator three lessons are drawn from this story: First, death results when a king strays from the path of justice; second, everyone must bow before a chaste and faithful wife; and third, fate is mysterious, and all actions are rewarded. Many sanctuaries were built in southern India and Lanka to the faithful wife who became the goddess of chastity.

The Jain philosopher Kunda Kunda of the Digambara sect lived and taught sometime between the first and fourth centuries. He laid out his metaphysics in The Five Cosmic Constituents (Panchastikayasara). He noted that karmic matter brings about its own changes, as the soul by impure thoughts conditioned by karma does too. Freedom from sorrow comes from giving up desire and aversion, which cause karmic matter to cling to the soul, leading to states of existence in bodies with senses. Sense objects by perception then lead one to pursue them with desires or aversion, repeating the whole cycle. High ideals based on love, devotion, and justice, such as offering relief to the thirsty, hungry, and miserable, may purify the karmic matter; but anger, pride, deceit, coveting, and sensual pleasures interfere with calm thought, perception, and will, causing anguish to others, slander, and other evils. Meditating on the self with pure thought and controlled senses will wash off the karmic dust. Desire and aversion to pleasant and unpleasant states get the self bound by various kinds of karmic matter. The knowing soul associating with essential qualities is self-determined, but the soul led by desire for outer things gets bewildered and is other-determined.

Kunda Kunda discussed ethics in The Soul Essence (Samayasara). As long as one does not discern the difference between the soul and its thought activity, the ignorant will indulge in anger and other emotions that accumulate karma. The soul discerning the difference turns back from these. One with wrong knowledge takes the non-self for self, identifies with anger, and becomes the doer of karma. As the king has his warriors wage war, the soul produces, causes, binds, and assimilates karmic matter. Being affected by anger, pride, deceit, and greed, the soul becomes them. From the practical standpoint karma is attached in the soul, but from the real or pure perspective karma is neither bound nor attached to the soul; attachment to the karma destroys independence. The soul knowing the karma is harmful does not indulge them and in self-contemplation attains liberation. The soul is bound by wrong beliefs, lack of vows, passions, and vibratory activity. Kunda Kunda suggested that one does not cause misery or happiness to living beings by one's body, speech, mind, or by weapons, but living beings are happy or miserable by their own karma (actions). As long as one identifies with feelings of joy and sorrow and until soul realization shines out in the heart, one produces good and bad karma. Just as an artisan does not have to identify with performing a job, working with organs, holding tools, the soul can enjoy the fruit of karma without identifying.

In The Perfect Law (Niyamsara), Kunda Kunda described right belief, right knowledge, and right conduct that lead to liberation. The five vows are non-injury, truth, non-stealing, chastity, and non-possession. Renouncing passion, attachment, aversion, and other impure thoughts involves controlling the mind and speech with freedom from falsehood and restraining the body by not causing injury. The right conduct of repentance and equanimity is achieved by self-analysis, by avoiding transgressions and thoughts of pain and ill-will, and by self-contemplation with pure thoughts. Renunciation is practiced by equanimity toward all living beings with no ill feelings, giving up desires, controlling the senses, and distinguishing between the soul and material karma. A saint of independent actions is called an internal soul, but one devoid of independent action is called an external soul. The soul free from obstructions, independent of the senses, and liberated from good and bad karma is free from rebirth and eternal in the nirvana of perfect knowledge, bliss, and power.