Arrian, Indica 1.4-7
 the Nysaioi are not an Indian race, but part of those who came with Dionysos to India, perhaps Greeks who became unfit for service in the wars Dionysos waged with the Indians,  perhaps also volunteers of the neighboring tribes whom Dionysos settled there together with the Greeks. He called the country Nysaia from the mountain (wet-nurse?) Nysa, and the city itself Nysa.  The mountain near the city, on whose foothills Nysa is built, is also called Meros because of the incident at the moment of Dionysos’ birth. All this the poets sang of Dionysos; and I leave interpretation to learned Greeks or barbarians.
(Brunt 1976-83, 5, n.) conjectures that Ind. 1.6 is derived from Megasthenes, in which case the confusion occurred already among contemporaries of Alexander.) Note that this comes in a speech by the Indian king Akouphis (Brunt has an appendix on this speech).