 Varanasi grew as an important industrial centre , famous for its muslin and silk <unk> , perfumes , ivory works , and sculpture . During the time of <unk> Buddha , Varanasi was the capital of the Kingdom of Kashi . The Buddha is believed to have founded Buddhism here around <unk> BC when he gave his first sermon , " The Setting in Motion of the Wheel of Dharma " , at nearby <unk> . The celebrated Chinese traveller <unk> , also known as <unk> <unk> , who visited the city around 635 AD , attested that the city was a centre of religious and artistic activities , and that it extended for about 5 kilometres ( 3 @.@ 1 mi ) along the western bank of the Ganges . When <unk> , visited Varanasi in the 7th century , he named it " <unk> " and wrote that the city had some 30 temples with about 30 monks . The city 's religious importance continued to grow in the 8th century , when Adi <unk> established the worship of Shiva as an official sect of Varanasi . 
