The economic resources and strategic location shape the dynamics of a region. Jammu & Kashmir’snatural location at the verge of China, South, and South Central Asia makes it an important terminal and transit route for future trade and economic activities in the region and beyond. China-Pakistan Economic Corridor (CPEC) passing through its northern part gives China; the shortest access to Arabian Sea which has enhances its geo-strategic importance manifold. Jammu & Kashmir is a land-locked region which reduces its prospects for international trade; however, it maintains a great potential for tourism and hydro-electric & solar energy generation. Unfortunately, this region has been a nucleus of India-Pakistan rivalry since 1947. The regional peace and stability, therefore, will largely depend on the peaceful resolution of the Kashmir Conflict. Given the resolution of Kashmir conflict and inclusion of India into the CPEC, the region will be transformed from Conflict Zone into a Trade Zone. This paper will focus on the geo-economic importance of Jammu & Kashmir, the role of geography in shaping the economic potential of the region and Jammu & Kashmir in contemporary regional and global settings