It was the ancient phase of Hinduism, evidenced by the Vedas, the oldest books in the world, particularly the oldest Rig Veda. The second phase involved a diversification of Sanatana Dharma, with the development of many religions, philosophies, mythologies, monastic and spiritual movements through Hinduism, Buddhism and Jainism.

Its main movement was to the East with Buddhism spreading to Tibet, China, Korea, and Japan, and both Hinduism and Buddhism spreading to Burma, Thailand, Indochina, Indonesia, and even into Polynesia. There was at this time a secondary spread of dharmic teachings to the West into Central Asia, which was predominately Buddhist but had Hindu elements as well. A yet lesser diffusion occurred to Persia and Europe, mainly through various mystical movements.

This was the classical age of Hindu-Buddhist culture which came to dominate Asia. It began around 500 BC, overlapping with the first wave. It began to decline with the Islamic invasions of India around 700 AD and came to an end around 1500 AD with the Islamic conquest of India and Indonesia, which involved massive destruction of temples, and genocide of people, and a policy of forced conversion to Islam that caused the Hindu religion to contract in order to preserve itself and which eliminated Buddhism from India as it did from Central Asia.

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