Leh has for centuries been an important stopover on trade routes along the Indus Valley between Tibet to the east, Kashmir to the west and also between India and China. The main goods carried were salt, grain, pashm or cashmere wool, charas or cannabis resin from the Tarim Basin, indigo, silk yarn and Banaras brocade.
Although there are a few indications that the Chinese knew of a trade route through Ladakh to India as early as the Kushan period (1st to 3rd centuries AD), and certainly by Tang dynasty, little is actually known of the history of the region until the formation of the kingdom towards the end of the 10th century by the Tibetan prince, Skyid lde nyima gon (or Nyima gon), a grandson of the anti-Buddhist Tibetan king, Langdarma (r. circa 838 to 841). He conquered Western Tibet although his army originally numbered only 300 men. Several towns and castles are said to have been founded by Nyima gon and he apparently ordered the construction of the main sculptures at Shey. In an inscription he says he had them made for the religious benefit of the Tsanpo (the dynastical name of his father and ancestors), and of all the people of Ngaris (Western Tibet). This shows that already in this generation Langdarma's opposition to Buddhism had disappeared. Shey, just 15 km east of modern Leh, was the ancient seat of the Ladakhi kings.