South Asia, comprising1 Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, has over the last decade been the subject of many discussions and debates, primarily for two reasons. One, owing to the region having been described by many as one of the most unstable in the world, and two, on account of the unexpected and unprecedented economic dynamism of its largest economy, India. The first revolves around the phenomenon of conflict that has been long-standing and varyingly intense through the history of the region and attracted renewed attention in the wake of global repercussions of terrorist attacks in the US in September of 2001. The second is an outcome of systemic economic reforms undertaken in India since 1991 that have altered its growth trajectory such that there is a shift in the centre of gravity of the global economy to Asia. A third more interesting but not as much analyzed characterization of South Asia is through the inter-linkages between conflict and economic exchange. As a unique exception to a well-proven ‘natural trading partner’ hypothesis,2 the South Asian region demonstrates how historically and geographically proximate countries, when caught in persistent conflict, lead to underperformance of a region in terms of its potential for economic exchange. This intriguing inter-linkage between conflict and economic exchange in South Asia is the subject of this book. Specifically, this book is an attempt to quantify the extent to which conflict has prevented the region from exploiting its trade potential.