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Bene Israel traditions varies on it's origin. Some claim descent from the Ten Lost Tribes of Israel. Others believe that their ancestors fled by sea the persecution of Antiochus Epiphanes of the Hanukkah story. The Bene Israel adopted Hindu names, and took up the profession of oil production. They were known in Marathi as shaniwar teli (“Saturday oil pressers”), because they abstained from work on the Jewish Sabbath.

A Jew named David Rahabi, appeared and discovering them taught them the practices of Judaism which they had previously mostly forgotten. The Jews of Cochin Indian origin acted as cantors, ritual slaughterers, and teachers for the Bene Israel. Many Bene Israel migrated toward Bombay (now Mumbai) during this period. The first of numerous Bene Israel synagogues, all following the Sefardic (Spanish) liturgy, was built in Bombay in 1796. Till this day the Bene Israel follow Sefardic Jewish practice adopted after having been instructed in it by the Cochin Jews.

When, in 1948, the state of Israel was established, many Bene Israel began to emigrate.

In 1964 the chief rabbinate of Israel after learning of the conditions of Bene Istael practises through the centuries declared the Bene Israel “full Jews in every respect” although instructing to investigate whether their marriages were in all cases legitimately performed in India due to their isolation from other Jews throughout the world.

Edited a lot from the article in them in the Encyclopedia Brittanica online.