The sultans' failure to hold securely the Deccan and South India resulted in the rise of competing southern dynasties: the Muslim Bahmani Sultanate (1347-1527) and the Hindu Vijayanagar Empire (1336-1565). Zafar Khan, a former provincial governor under the Tughluqs, revolted against his Turkic overlord and proclaimed himself sultan, taking the title Ala-ud-Din Bahman Shah in 1347. The Bahmani Sultanate, located in the northern Deccan, lasted for almost two centuries, until it fragmented into five smaller states in 1527. The Bahmani Sultanate adopted the patterns established by the Delhi overlords in tax collection and administration, but its downfall was caused in large measure by the competition and hatred between deccani (domiciled Muslim immigrants and local converts) and paradesi (foreigners or officials in temporary service). The Bahmani Sultanate initiated a process of cultural synthesis visible in Hyderabad, where cultural flowering is still expressed in vigorous schools of deccani architecture and painting.

Founded in 1336, the empire of Vijayanagar (named for its capital Vijayanagar, "City of Victory," in present-day Karnataka) expanded rapidly toward Madurai in the south and Goa in the west and exerted intermittent control over the east coast and the extreme southwest. Vijayanagar rulers closely followed Chola precedents, especially in collecting agricultural and trade revenues, in giving encouragement to commercial guilds, and in honoring temples with lavish endowments. Added revenue needed for waging war against the Bahmani sultans was raised by introducing a set of taxes on commercial enterprises, professions, and industries. Political rivalry between the Bahmani and the Vijayanagar rulers involved control over the Krishna-Tunghabadhra river basin, which shifted hands depending on whose military was superior at any given time. The Vijayanagar rulers' capacity for gaining victory over their enemies was contingent on ensuring a constant supply of horses--initially through Arab traders but later through the Portuguese--and maintaining internal roads and communication networks. Merchant guilds enjoyed a wide sphere of operation and were able to offset the power of landlords and Brahmans in court politics. Commerce and shipping eventually passed largely into the hands of foreigners, and special facilities and tax concessions were provided for them by the ruler. Arabs and Portuguese competed for influence and control of west coast ports, and, in 1510, Goa passed into Portuguese possession.

The city of Vijayanagar itself contained numerous temples with rich ornamentation, especially the gateways, and a cluster of shrines for the deities. Most prominent among the temples was the one dedicated to Virupaksha, a manifestation of Shiva, the patron-deity of the Vijayanagar rulers. Temples continued to be the nuclei of diverse cultural and intellectual activities, but these activities were based more on tradition than on contemporary political realities. (However, the first Vijayanagar ruler--Harihara I--was a Hindu who converted to Islam and then reconverted to Hinduism for political expediency.) The temples sponsored no intellectual exchange with Islamic theologians because Muslims were generally assigned to an "impure" status and were thus excluded from entering temples. When the five rulers of what was once the Bahmani Sultanate combined their forces and attacked Vijayanagar in 1565, the empire crumbled at the Battle of Talikot.

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