Normally we assume that the EBT collections were compiled in the central regions of the Middle Country, around Rajagaha, etc. But the Suttanipāta is somewhat unusual, in that it has no counterpart in the northern collections. Certain portions of it are found, but as independent texts, and there seems to be no equivalent to the text as a whole.
One of the most striking portions of the text is the Vatthugatha of the final chapter, which is set in Assaka, which is further south than anywhere else in the EBTs. This then traces a journey back to the middle country, naming several places long the way, such as Ujjenī, the capital of Avantī. So we know that the most geographically prominent location is in the far south. The location is, however, only specified in the Vatthugatha introduction, which is known to be late. It seems likely that this text served as a conversion narrative for the region, showing that the prominent brahmin teachers all became Buddhists. The area is still known for its long association with brahmin sages.
The relation of the Aṭṭhakavagga to the south is less apparent. But it is cited twice elsewhere in the canon, once by Mahākaccāna and once by his student Soṇa. Now, Mahākaccāna was living in Avantī at the time, and it seems that he was the monk who introduced Buddhism to the area, and he used the Aṭṭhakavagga as a core text. Soṇa’s long journey from Avantī to see the Buddha perhaps served as a model for the journey of the sixteen brahmins in the Pārāyanavagga.
We find a couple of other southern connections as well. The Dhaniyasutta ([snp1.2]) is set on the banks of the Mahī river, which is presumably near the Mahissati mentioned in the Pārāyanavagga.
The Kasibhāradvājasutta is located in the “southern hills”, which while still within Magadha, lay towards the southern extreme of the Buddha’s normal domain, around 500 kilometres to the south-west of Rājagaha, along the road towards Avantī. The southern hills are also where the laywoman Nandamātā recited the Pārāyana in the early dawn before the visit of Sāriputta and Moggallāna. It should be noted that the southern hills were a remote and rare destination at that time, mentioned in only one other Sutta and three Vinaya passages. It was such an outlying district that the lay folk complained about how rarely it was visited by the Buddha and his mendicants ([pli-tv-kd1:53.1.3]).
There are, to be sure, plenty of other locations mentioned which lie within the normal middle country. Still, it seems to me that there is a definite tendency to emphasize the south. It even seems as if there is a somewhat systematic attempt to provide conversion narratives for the various stages along the southern road.
Could it be that the collection was compiled in the south, perhaps by Mahākaccāna’s students? And that it served as a primary text especially for brahmanical conversion? Further, since Mahinda lived in Avantī only a few generations later, could he have been educated in the same system, which is where he learned the text before introducing it to Sri Lanka?
The Suttanipāta is quoted a few times in the Milindapañha, which is of course of northern origin. However the core text was greatly expanded, and the quotes are in the expanded portions. Could this also be a sign that these passages were added in the south, either in Avantī or even later in Sri Lanka?