The geographical origins of the Bhatia caste are uncertain. Denzil Ibbetson, an ethnographer of the British Raj, noted that many were found in Sindh and Gujarat in the 19th century CE but that there were grounds to believe that they had migrated from Bhatner, Jaisalmer and the area then known as Rajputana (approximating to modern-day Rajasthan). A more recent study by André Wink traces a 12th-century connection between the Bhatias of Jaisalmer and the Caulukyas of Gujarat, while Anthony O'Brien almost-contemporaneous attempt to discover their homeland caused him to place them around Sindh from the 7th century. Wink, who is a professor with interests in medieval and early modern Indian history, records that many of the community in Sindh converted to Islam during the reign of Firoz Shah Tughluq, although Robert Vane Russell, another Raj ethnographer, was of the opinion that those engaged in foreign trade in the 19th century were exclusively Hindu. The Bhatias, who had been associated in particular with the Multan area in Sindh, were historically merchants and they probably formed part of the earliest Indian diaspora found in Central Asia, together with the Bhora and the Lohana communities. Their emergence as a significant merchant group pre-dates the 17th century and certainly by the time that India became subject to colonial rule, the Bhatias and the other two early diaspora communities had established trade and moneylending networks that, according to Scott Levi, who specialises in the history of Central Asia, "... extended across Afghanistan, Central Asia, and eventually reached even beyond the Arabian Peninsula and East Africa to the Caribbean islands in the west, and to Southeast Asia and China in the east.
Among the Bhatias, there are different sub-castes, such as Jakhar, Kutchi, Veha, Halai, Kanthi, Pavrai, Navgam, Pachisgaam, Thattai and Punjabi. Bhatias from Kutch are Kutchi Bhatias, those from around Jamnagar district are known as Halai Bhatia, those from Sindh in present day Pakistan are known as Sindhi Bhatias and those from Punjab in present day India and Pakistan are known as Punjabi Bhatias. A large number of Punjabi Bhatias, whose main clan is Rajput, settled in Pakistani Punjab in 1947. In Punjab, Bhatias are considered to be Mair Rajputs or Sikh Rajputs. Some of the major groups derived from the principal professions they follow or the crafts they practice.