In the grand tradition of studying orient and the occult , Oxford appointed Horace Hayman Wilson (1786-1860) as the first Boden Professor of Sanskrit and when Sir Monier Williams occupied the Chair he founded the Indian Institute for providing a training ground for the Indian Civil Service. Its doors first opened in 1884 while the construction of the building was completed in 1895. By 1903 the Institute’s Library had collected nearly about 200 manuscripts in Sanskrit and Prakrit to which in 1911 were added 368 Sanskrit manuscripts from Kashmir by Aurel Stein. In 1909, 6000 Indian manuscripts were donated to the Indian Institute by Maharaja Sir Chandra Shumshere the then Prime Minister of Nepal. In 1927 the Indian Institute Library became part of the Bodleian. “The combined Indian Institute and Bodleian collections today form one of the largest repositories of Sanskrit manuscripts outside Indian sub continent” .

In 1936 H N Spalding endowed the Spalding Chair of Eastern Religions and Ethics. The Chair was first occupied by Sarvepalli Radhakrishnan who later became the President of India. With the independence of India in 1947, the Indian Institute resources dispersed and its great Sanskrit manuscripts collection moved to new Bodleian Library. Amongst the collection held by the Department of Western Manuscripts and Modern Papers includes Sir Aurel Stein’s vast manuscript papers in the form of letters, documents and photographs which are accessible in the John Johnson Reading Room. A cumulated index to its collection acquired since 1916 is available for use.