Interpretations of the Indian past were inevitably influenced by colonial concerns and interests, and also by prevalent European ideas about history, civilization and the Orient. Orientalist scholars studied the languages and the texts with selected Indian scholars, but made little attempt to understand the world-view of those who were teaching them. The readings therefore are something of a disjuncture from the traditional ways of looking at the Indian past.

Orientalism which we can understand broadly as Western perceptions of the Orient fueled the fantasy and the freedom sought by European Romanticism, particularly in its opposition to the more disciplined Neo-Classicism. The cultures of Asia were seen as bringing a new Romantic paradigm. Another Renaissance was anticipated through an acquaintance with the Orient, and this, it was thought, would be different from the earlier Greek Renaissance. It was believed that this Oriental Renaissance would liberate European thought and literature from the increasing focus on discipline and rationality that had followed from the earlier Enlightenment. The Romantic English poets, Wordsworth and Coleridge, were apprehensive of the changes introduced by industrialization and turned to nature and to fantasies of the Orient.

However, this enthusiasm gradually changed, to conform with the emphasis later in the nineteenth century on the innate superiority of European civilization. Oriental civilizations were now seen as having once been great but currently in decline. The various phases of Orientalism tended to mould European understanding of the Indian past into a particular pattern. There was an attempt to formulate Indian culture as uniform, such formulations being derived from texts that were given priority. The so-called 'discovery' of India was largely through selected literature in Sanskrit. This interpretation tended to emphasize non-historical aspects of Indian culture, for example the idea of an unchanging continuity of society and religion over 3,000 years; and it was believed that the Indian pattern of life was so concerned with metaphysics and the subtleties of religious belief that little attention was given to the more tangible aspects.

German Romanticism endorsed this image of India, and it became the mystic land for many Europeans, where even the most ordinary actions were imbued with a complex symbolism. This was the genesis of the idea of the spiritual east, and also, incidentally, the refuge of European intellectuals seeking to distance themselves from the changing patterns of their own societies. A dichotomy in values was maintained, Indian values being described as 'spiritual' and European values as 'materialistic', with little attempt to juxtapose these values with the reality of Indian society. This theme has been even more firmly endorsed by a section of Indian opinion during the last hundred years.

It was a consolation to the Indian intelligentsia for its perceived inability to counter the technical superiority of the west, a superiority viewed as having enabled Europe to colonize Asia and other parts of the world. At the height of anti-colonial nationalism it acted as a salve for having been made a colony of Britain.