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There are various historical sources tracing the origins of the city of Sialkot. While many sources have not been confirmed, reliable and accurate historical source on the city of Sialkot dates back to 327 BC and is of Greek origin. The antiquities of Sialkot have also been discussed by Sir Alexander Cunnigham in his Archaeological Survey Reports, II, 21, 22, and XIV, 44 to 47.


According to the ancient Indian scriptures, Sialkot is believed to have been founded by Raja Sul or Sala, the uncle of the Pandavas. After his death, some 5000 years ago, the dynasty continued for some 1500 years. The seasonal stream, known as the Aik Nala, that still flows through the city, has been mentioned in the Upanishads.


In the late Vedic period (1500 - 200 B.C.), Sakala (Sialkot) was the capital of the Madras (Brihadaranyaka Upanishad).


Sakaladvipa (island of Sakala) was the name of the doab (land lying between two rivers) between Chandrabhaga (Chenab) and Iravati (Ravi). In those early days, Sakala was studded with thick forests and inhabited by a pastoral race called Yahars or Yirs. According to the Milinda Panha, the Bactrian-Greek king, Menander, ruled in Sialkot during the 2nd century BC. 


The most reliable and accurate historical source on the city of Sialkot dates back to 327 BC when the city was known as Sagala and it represented the eastern-most outpost and expansion of the Hellenic Empire created by Alexander the Great and has been cross-correlated to the Greek maps of the era and the monuments found in the Sialkot district. The Greek historians state that the city was one of the most productive and wealthiest regions of the Achaemenid Empire and the Punjab region which had earned a reputation as being the richest satrapy (province) of the then Persian Empire which had controlled it for an estimated 1100 years.


According to the Punjabi folk-lore, the early history of Sialkot is closely interwoven with the traditions of Raja Salivahan, his son, Raja Rasalu, and his foe, Raja Hudi. A popular belief is that the city was re-founded by Raja Salivahan or Salban when it became a part of Kashmir under King Sama Dutt. Raja Salivahan built a fort and the city and gave the place its present name. He was of Sia caste, and it is believed that the word "Sialkot" means the 'fort of the Sia'. Legend also says that Raja Salivahan had two sons: Puran and Rasalu. Puran got punished by his father, Raja Salivahan, due to the instrumentality of a wicked step-mother and thrown into a well, still the resort of pilgrims near Sialkot, called "Puran di Khui", (Puran's Well). A mohalla (town) in the city is also named "Puran Nagar". The other son of Raja Salivahan, Rasalu, became Raja after the death of Raja Salivahan. Attacks from the neighboring Raja of Jehlum ruined the city. Raja Rasalu got involved in wars with Raja Hudi. Being worsted in battle, Rasalu, as the price for peace, was forced to give his daughter in marriage to his conqueror, who gave the territory he had conquered to Rasalu's adopted son. After Rasaluís death in 400 AD, there are no significant accounts of Sialkot for the next 300 years.  A another legend narrated to Mr. Prinsep describes these 300 years as:


"After the death of Raja Rasalu, the country is said to have fallen under the curse of Puran, for 300 years lying totally devastated from famine and incessant plunder."


After the invasion of the Hunas (Huns or Hephthalites) in the last quarter of the 5th century AD, Sialkot became the capital of Toramana and his son Mihirakula until he was defeated by a native subcontinent Prince, Yeshodharman.  


In 790 AD, Raja Nairut, supported by the Yousafzai Pashtun tribe, attacked and demolished the city. There is again no mention of Sialkot in the historical texts for a fairly long period after that except that it remained a part of Jammu under the rule of Raja Braham Deo.


Sialkot became a part of the Muslim Sultanate of Delhi when Shahab-ud-Din Muhammad Ghauri conquered Punjab in 1011. He was unable to conquer Lahore but left a garrison in Sialkot. Later, Sultan Khusro Malik tried to capture the city but failed to do so. Sialkot then became a part of the Muslim Mughal Empire of India. The Mughal commander, Usman Ghani Raza, advanced towards Delhi by way of Sialkot which capitulated to his armies. During the era of the Mughal Emperor, Jalal-ud-Din Muhammad Akbar, the present district of Sialkot formed a part of the Rachna-Bar Sarkar of the Lahore province. Under the reign of the Mughal Emperor, Shahab-ud-Din Muhammad Shah Jahan, Ali Mardan Khan held the charge of Sialkot.


At the end of the Mughal dynasty, the suburbs and the outlying districts and areas of Sialkot were left to themselves. Sialkot itself was appropriated by a powerful family of Pashtuns, and the sub-mountainous tracts were in the hands of Raja Ranjit Deo of Jammu. In 1748, the four districts of Gujrat, Sialkot, Pasrur and Daska were given to the Afghan ruler, Ahmed Shah Durrani. After 1751, Ahmed Shah Durrani left his son, Taimur, to rule Lahore and these districts. During that time, Raja Ranjit Deo of Jammu expanded his domination over this area, but the city of Sialkot was not included in it. The city was held strongly by a Pastun family till the occupation of the Sikhs.


During the decline of the Durrani regime, Sialkot was occupied from the Pashtuns by the Sikhs. Between 1797 to 1810, Raja Ranjit Singh occupied the Sialkot district. After the death of Raja Ranjit Singh, the British officers were appointed in Sialkot. Sialkot was annexed by the British after the Second Anglo-Sikh War in 1849. During the Mutiny of 1857 it was the scene of heavy fighting, and the Sialkot Fort was used by the Europeans for protection. The native troops plundered the treasury and destroyed all the records.


After the independence of Pakistan from the British rule in 1947, thousands of Muslim refugees, settled in Sialkot. Ever since, Sialkot has gradually become one of the major industrial centers of Pakistan and is well-known for its manufacture and export of surgical instruments, musical instruments, sports goods, leather goods, textile products and other light manufactures.