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The one exception to this picture of conflict amongst the southern powers was the relationship between the Pallavas and the Cheras, the latter being the people of the Malabar coast (modern Kerala). The Cheras were ruled by the Perumal dynasty. There is evidence of close contact between the Cheras and the Pallavas. Mahendra-Varman's play Mattavilasa was well known and frequently performed by the actors of Malabar. Sanskrit works of the period written for the Pallavas show considerable knowledge of Kerala. The Malabar coast at this time (from the eighth century onwards) was acting host to another influx of traders from the west - the Arabs. Unlike the Romans, the Arabs settled permanently in the coastal regions of south India, where they were welcomed as traders and given land for their trading stations. They were free to practise their religion, as had been the Christians in earlier centuries. The present-day Mappillas or Malabar Muslims are descendants of these settlers. The Malabar Muslims, being mainly traders, were not actively concerned with large-scale conversions to Islam, and therefore adjustment with local society was easier.

In the previous century, the Arab armies had overrun Persia and had forcibly converted large numbers of Zoroastrians. Many, however, in the early eighth century fled by sea and by the coastal route from Persia to western India, where they settled after having been given asylum by the Chalukyas, and took to trade and were the founders of a community later known as Parsis, after the land of their origin, Persia.

Meanwhile, the western possessions of the Chalukyas were being threatened by the very people from whom the Parsis had fled. The Arabs had occupied Sind in the eighth century and were advancing towards Chalukya territory. The Lata Chalukyas managed to hold the Arabs back and thus allow time for their southern neighbours to arm themselves. The immediate danger from the Arabs passed, but, the Chalukyas were faced with an even more formidable threat. One of their feudatories, Dantidurga, claimed independence and by slow stages his family overthrew the Chalukyas and established a new dynasty - the Rashtrakutas. The Pallavas survived the Chalukyas by about a century, but their authority during the ninth century was no longer that of a major power, The last of the Pallavas was assassinated by the son of a feudatory and the 'Imperial' Pallava line came to an end.

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