 In 1935 , Indiana Jones narrowly escapes the clutches of Lao Che , a crime boss in Shanghai in the Republic of China . With his 11 @-@ year @-@ old Chinese sidekick Short Round and the nightclub singer Willie Scott in tow , Indy flees Shanghai on an airplane that , unknown to them , is owned by Lao . While the three of them sleep on the plane , the pilots parachute out , and they leave the plane to crash over the Himalayas while dumping its fuel . Indy , Shorty , and Willie discover this and narrowly manage to escape by jumping out of the plane on an inflatable raft , and then riding down the slopes into a raging river . They come to <unk> , a desolate village in northern India , where the poor villagers believe them to have been sent by the Hindu god Shiva and enlist their help to retrieve the sacred <unk> stone stolen from their shrine , as well as the community 's children , from evil forces in the nearby Pankot Palace . During the journey to Pankot , Indy hypothesizes that the stone may be one of the five fabled Sankara stones that promise fortune and glory . 
