The Bahlikas (Sanskrit: बाह्लिक; Bāhlika) were the inhabitants of Balikha (Sanskrit: बलिख), mentioned in Atharvaveda, Mahabharata, Ramayana, Puranas, Vartikka of Katyayana, Brhatsamhita, Amarkosha etc. and in the ancient Inscriptions. The other variations of Bahlika are Bahli, Balhika, Vahlika, Valhika, Bahlava, Bahlam/Bahlim, Bahlayana and Bahluva.
Some hymns of Atharvaveda invoke the fever to go to the Gandharis, Mahavrsas (a tribe of Punjab), Mujavants and, further off, to the Bahlikas. Mujavant is the name of a hill (and a people) located in Hindukush/Pamir.
Besides Atharvaveda Parisista, several other ancient texts also associate the Bahlikas with the Kambojas.
The fact that Puranic evidence locates the Bahlikas in Uttarapatha and further the close association of the Bahlikas with the Kambojas as well as with Tusharas, Sakas and Yavanas in the Atharvaveda Parisista and in some other ancient sources suggests that the Bahlikas were located as a close neighbor to the Tusharas, Sakas, Yavanas and the Kambojas etc. Since the Kambojas were located in Badakshan and Pamirs, the Tusharas on the north of Pamirs and the Sakas on the river Jaxartes and beyond, the Bahlikas or Bahlams, as neighbors to these people should be placed in Bactria.
The Iron pillar of Delhi inscription by King Chandra (4 CE), also makes mention of Bahlikas as living on the west side of the Indus River (Sindhu). After crossing the seven mouths of the Indus, King Chandra is stated to have defeated the Bahlikas.
These above several references attest that the Bahlikas were originally located beyond the seven mouths of river Indus in the country of Bactria and the land was watered by the river Oxus. But later, a section of these people had moved from Balkh to Punjab while still others appear to have moved to south-western India as neighbors to the Saurashtras and Abhiras of Sauviras.
The people having surname of Behal,Bahal,Bahl in Punjab are the direct descendant of Bahalikas. Salya, the king of Madra referred to in the Mahabharata has been called a Bahlika Pungava i.e. foremost among the Bahlikas.
In the digvijay expedition of Pandava Arjuna, there is a reference to a people called Bahlikas whom Arjuna had to fight with. They are stated to be located on the southern side of Kashmir as neighbors to the Ursa and Sinhapura kingdoms.
A passage in Ramayana attests that on the way from Ayodhya to Kekaya, one had to pass through the country of Bahlikas, located somewhere in Punjab. This shows that ancient Bahlikas had moved to and planted a settlement in Punjab too. This is also verified from the epic Mahabharata.
This shows that there was yet another Bahlika country besides the one located in Bactria.
A third settlement of the Bahlikas is attested in western India as neighbors to the Saurashtras. Ramayana refers to (Saurashtrans.bahlikan.chandrachitranstathaivacha). There is also a similar expression in the Padma Purana i.e. (Surashtransa.bahlika.ssudrabhirastathaivacha). These ancient references attest that the Bahlikas were living as neighbors to the Saurashtras and the Abhiras. According to the Puranas, a branch of this people ruled in Vindhyas.
According to the Puranic traditions, Dhrshta was one of the nine sons of Manu. From him came a number of clans called Dharshtakas who were reckoned as Kshatriyas. According to Shiva Purana the Dharshtaka princes became rulers of Bahlika.
Satapatha Brahmana knows of a king named Bahlika Pratipeya whom it calls Kauravya (=Kaurava). It has been pointed out that this Kaurava king is identical with Bahlika Pratipeya of Mahabharata.
According to Mahabharata evidence, the king of Bahlika was present at Syamantapanchaka at Kurukshetra on the occasion of a solar eclipse. Also the name 'Bahlika Desa' originates from the name of the middle son of King Pratipa of Hastinapura, Vahlika, abandoned his paternal kingdom and started living with his maternal uncle in Bahlika and inherited the kingdom from him.. Hence, being the elder to King Shantanu, Bahlika was the paternal uncle of Bhishma and pre-dates him.
The people of Balhika had presented to Yudhishthira as a tribute ten thousand asses (donkeys), numerous blankets of woollen texture, numerous skins of the Ranku deer, clothes manufactured from jute and woven with the threads spun by insects. And they also gave thousands of other clothes possessing the colour of the lotus, soft sheep-skins by thousands, sharp and long swords and scimitars, and hatchets and fine-edged battle-axes, perfumes and gems of various kinds (2.50)
Karna had fought with and vanquished Bahlikas along with the Kambojas of Rajpura, the Amvashthas, the Videhas, and the Gandharvas, the fierce Kiratas of the fastness of Himavat, the Utpalas, the Mekalas, the Paundras, the Kalingas, the Andhras, the Nishadas and the Trigartas (7.4.5-6).
King Bahlika had participated in the Kurukshetra War. Mahabharata calls him a mighty (mahabali) king. Along with his son Somadatta and grandson Bhurisravas, King Bahlika had participated in the Mahabharata war with one Akshauhini (division) army of Bahlika soldiers and had sided with the Kauravas against the Pandavas. Bahlika and his grandson Bhurisravas were amongst the eleven distinguished Generals or Senapatis of the Kaurava army appointed by Duryodhana.
The Ramayana seems to localize the Uttarakurus in Bahlika country. According to it, Ila, son of Prajapati Karddama, king of Bahli (Bahlika) country, gave up Bahli in favor of his son Sasabindu and founded the city of Pratisthana in Madhyadesa. The princes of the Aila dynasty (which is also the dynasty of Kurus) have been called Karddameya. The Karddameyas obtained their names from river Kardama in Persia and therefore, their homeland is identified with Bahlika or Bactria. This indicates that Bahlika or Bactria was the original home of the Kuru clans.
Vatsyayana in his Kamasutra records a peculiar custom prevalent among the Bahlikas i.e. several young men marry a single woman in Bahlika country and in Strirajya. It is said in the Mahabharata that the Pandava brothers (i.e. Kurus) were married to one woman, Draupadi. This again implies that the Kurus were originally a people of Bahlika which was identical with Uttarakuru (Dr M. R. Singh). Since Uttarakuru of the Aitareya Brahmana is said to lie beyond Himalaya, the Bahlika or Bactria is also beyond Hindukush (i.e. Himalayan range).
Besides the Kurus, the Madra (IAST: Mādra; IPA/Sanskrit: [maːdɽɐ]) were also originally a people living in/around Bahlika as is suggested by Vamsa Brahmana  of the Sama Veda which text refers to one Madragara Shaungayani as a teacher of Aupamanyava Kamboja. Dr Zimmer as well as authors of Vedic Index postulate a possible connection between the Iranian Uttaramadras and the Kambojas. Both these people were close neighbors in the north-western part of ancient India. According to Jean Przylusky, the Bahlika (Balkh) was an Iranian settlement of the Madras who were known as Bahlika-Uttaramadras.
This suggests that in the remote antiquity (Vedic age), the (Iranian settlement of) the Madras was located in parts of Bahlika (Bactria)--the western parts of the Oxus country. These Madras were, in fact, the Uttaramadras of the Aitareya Brahmana (VIII/14). However, in the 4th century BC, this Bahlika/Bactria came under Yavana/Greek political control and thus the land started to be referenced as Bahlika-Yavana in some of ancient Sanskrit texts.
Thus, the foregoing discussion suggests that the Uttarakurus, Uttaramadras and Kambojas—all were located beyond the Himalaya/Hindukush ranges. Probably, the Uttarakurus were located in the northern parts of Bahlika, the Uttaramadras were in the southern parts of it and the Kambojas (=Parama Kambojas) were to the east of Bahlika, in the Transoxiana region. The ancient Bahlika appears to have spanned a large expanse of territory. The commentator of Harsha-Carita of Bana Bhatta also defines the Kambojas as Kambojah-Bahlika-Desajah i.e. the Kambojas originated in/belonged to Bahlika. Thus, it seems likely that in the remote antiquity, the ancestors of the Uttarakurus, Uttaramadras and the Parama Kambojas were one people or otherwise were closely allied and had lived in/around Bahlika (Bactria).
Amarakosha makes references to the Saffron of Bahlika and Kashmira countries. Similar reference to Bahlika saffron has also been noticed in the 4th century AD Raghuvamsa play of poet Kalidasa. Raghuvamsa states that saffron got adhered to Raghu's horses which they had to shed off by rolling on the banks of Oxus before Raghu undertook to attack the forces of the Hunas and the Kambojas located on either side of Oxus.
Kavyamimamsa of Rajshekhar (10th century AD) lists the Bahlikas with the Sakas, Tusharas, Vokanas, Hunas, Kambojas, Pahlavas, Tangana, Turukshas, etc. and states them as the tribes located in the Uttarapatha division.
The Buddhist play Mudrarakshas of Visakhadutta as well as the Jaina works Parishishtaparvan refers to Chandragupta's alliance with Himalayan king Parvatka. The Himalyan alliance gave Chandragupta a composite army made up of the Yavanas, Kambojas, Sakas, Kiratas, Parasikas and Bahlikas as stated in the Mudra-rakashas.
The Bahlikas have been equated to Mlechchas in the later Brahmanical literature. There is a distinct prophetic statement in the Mahabharata that the mlechcha kings of Sakas, Yavanas, Kambojas, Bahlikas etc. will rule unrighteously in Kali yuga. (3.188.34-36).
Like Kamboja, Bahlika region was famous for its horses. They were used by kings in wars.
Brahmanda Purana refers to the horses from Bahlika. Similarly, Valmiki Ramayana refers to the horses of Bahlika, Kamboja and Vanayu countries as of excellent breed. Upamitibhavaprapanchakatha singles out horses from Bahlika and those from Kamboja and Turuksha as the best. The Abhidhanaratnamala also mentions examples of excellent horses from Bahlika, Persia, Kamboja, Vanayu, Sindhu and the land bordering on Sindhu.