The Periplus of the Erythraean Sea, of the early 2nd century AD, mentions a marketplace named Poduke (ch. 60), which G.W.B. Huntingford identified as possibly being Arikamedu, about 2 miles from the modern Pondicherry. Huntingford further notes that Roman pottery was found at Arikamedu in 1937, and archeological excavations between 1944 and 1949 showed that it was "a trading station to which goods of Roman manufacture were imported during the first half of the 1st century AD".1
Before this period nothing is known with certainty. The "Bahur Plates", issued in the 8th century speak of a Sanskrit University which was here from an earlier period. Legend has it that the sage Agastya established his Ashram here and the place was known as Agastiswaram. An inscription found near the Vedhapuriswara Temple hints at the credibility of this legend.
History continues at the beginning of the fourth century A. D. when the Pondicherry area is part of the Pallava Kingdom of Kanchipuram. During the next centuries Pondicherry is occupied by different dynasties of the south: in the tenth century A.D. the Cholas of Thanjavur took over, only to be replaced by the Pandya Kingdom in the thirteenth century. After a brief invasion by the Muslim rulers of the North, who established the Sultanate of Madurai, the Vijayanagar Empire took control of almost all the South of India and lasted till 1638, when the Sultan of Bijapur began to rule over Gingee.
Pondicherry consists of four small unconnected districts: Pondicherry, Karaikal, and Yanam on the Bay of Bengal and Mahé on the Arabian Sea. Pondicherry and Karaikal are by far the larger ones, and are both enclaves of Tamil Nadu. Yanam and Mahé are enclaves of Andhra Pradesh, and Kerala respectively. The territory has a total area of 492 km²: Pondicherry (city) 293 km², Karaikal 160 km², Mahé 9 km² and Yanam 30 km². It has 900 000 inhabitants
Pondicherry's gross state domestic product for 2004 is estimated at $2 billion in current prices.