What all this means is that almost all the Kingdoms and City-states that I detail in Arrows of Indra are actual places, that actually existed. They didn't ever quite look exactly like they do in the Bharata Kingdoms of the setting, not exactly at least, but they were all real places.
All except one. The Island Kingdom of Dwaraka, found far to the south of the rest of the Bharata kingdoms, off the coast of the main landmass, was never a real place (as far as we know). It is, rather, the Indian version of the story of Atlantis. Of course, Hindu fundamentalists have gone to great lengths in their efforts to try to "prove" that the place really existed, mounting under-water 'archeological expeditions' that are reminiscent of the poor Mormons' expeditions to central america desperately trying to find any scrap of evidence of the lost tribes of Israel in mesoamerica; the Hindu version usually finds some underwater rock formations that everyone agrees are geological except the fundamentalists (who claim it's "proof" of some sunken city).
In any case, in game terms, Dwaraka is a pretty cool part of the setting. Here's what we know: Dwaraka means "city of many gates", and in the setting it would be the richest kingdom in the entire world. Its buildings were decorated with gems. The buildings are covered in gold, and built as high as the clouds. It features spectacular temples.
The volcanic island the city is built upon is rich and lush in agriculture. The Dwarakans are masters of sailing ships and navigate all over the world, going to distant lands (like the Golden lands far to the east) and bringing back goods and curiosities. They also exploit all the coastal area around them which is largely uninhabited. The city is protected, both in the sense of favorable climate and spiritual protection, by the mountain Govardhana, which is also a god. The local population engage in a great annual festival to the mountain-god that is unlike anything else in the world.
Ancient legend holds that Dwaraka was raised up from the ocean, and the city was built along perfect and orderly lines in a single day by the Engineer-god Vishwakarma. What few people know, however, is that the island is doomed by prophecy to sink back into the sea at the end of the Third Age, when the great Avatara of the age (eventually revealed to be Krishna) finally dies in his mortal form. The wise and Holy-aligned sages of the island accept and prepare for this eventuality; some of them may seek to try to prolong the age for Dwaraka's sake. But there are a few who may also be too fond of Dwaraka and its opulence and may try to find a way to sabotage this prophecy, even if it means turning against the will of the Gods.
At the default start point of the Arrows of Indra campaign, the city of Dwaraka is governed by a council, as a kind of republic, ruled by the brahmin nobility who are generally wise and good rulers. Later on in the chronology of the setting, Krishna will evacuate his home city of Mathura in the face of the great invasion of the emperor Jarasandha, who is set upon conquering the entire world. The nobles of Dwaraka invite Krishna to bring his people there, and to rule over the island as its King.
In a standard Arrows of Indra campaign, the city-state/island of Dwaraka doesn't itself offer tremendous opportunities for conflict, except maybe when the emperor Jarasandha lays siege to it. But if you have Dwaraka as a home-base for the campaign, you could have sea-faring adventures that would allow the PCs to travel to all kinds of unusual places: the depths of the Dandaka jungle, strange kingdoms to the south and west, magical islands of all sorts, and even to the distant lands far to the east of Bharata (potentially allowing you to incorporate material from other OSR products, like Red Tide or Qelong, or for that matter Oriental Adventures, depending on just how weird you wanted to get).
Dwaraka could also allow you to play at a whole other power-level from a more standard third-age Arrows of Indra campaign. Its clearly implied that Dwaraka is a vastly more advanced civilization than the other Bharata Kingdoms, retaining many of the qualities of the Second Age; it would not be by any means a stretch to suppose that magic and magic items, even of epic level, are far more common there than elsewhere. Superweapons and flying Vimana chariots would not be as rare in Dwaraka (whereas in the rest of the Bharata kingdoms they are truly rare artifacts, uncommon remnants of the previous age).
If you really wanted to go wild, Dwaraka would even be the obvious place to incorporate 'super-science' to your AoI campaign, bringing in material from sci-fi OSR products. Its the sort of thing that has been dealt with in Grant Morrison's "18 days", for example:
In any case, if you want to weird-up your AoI game, Dwaraka is a great place to go.
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