Puducherry, formerly known as Pondicherry, gained its significance as "The French Riviera of the East" after the advent of French colonialisation in India. Puducherry is the Tamil interpretation of "new town" and mainly derives from "Poduke", the name of the marketplace or "port town" for Roman trade in the 1st century, as mentioned in The Periplus of the Erythraean Sea. The settlement was once an abode of learned scholars versed in the Vedas, hence it was also known as Vedapuri.

The history of Puducherry can broadly be classified into two periods: pre-colonial and colonial. The pre-colonial period started with the reign of the Pallavas, who ruled the empire from 325 to 900, after which came the Chola dynasty, from 900 to 1279, and the Pandya dynasty, from 1279 to 1370. During the 14th century, the city was under the rule of Naikship of Gingee of the Vijayanagara Empire, from 1370 to 1614, when it was conquered by the Sultan of Bijapur, who ruled it from 1614 to 1638. It was during this period that Portuguese and Danish merchants used it as a trading center.

The colonial period began with the Portuguese, the first Europeans to conduct trade in textiles, in 1521, and subsequently, the Dutch and the Danes in the 17th century.

The prospering trade of Puducherry attracted the French, and the predominant feature of the town was laid by the French pioneer Francois Martin in the form of a French settlement, in 1674. In 1693, Puducherry was captured by the Dutch and subsequently restored in 1699, with the Treaty of Ryswick.