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The second edition of the Year Book provides a comprehensive overview of the security environment in South Asia. The geostrategic significance of the region and its emergence as a global power centre is indicated by the increasing attention and engagement of South Asia by the comity of nations. The region continues to grow in economic, industrial and military production, even though its peculiar security environment and inter and intra state disputes continue to intrigue the world. The definition of South Asia has got diffused over the years due to strategic linkages and interdependence of nation states. The Year Book, therefore, includes China and other Southeast Asian Nations, in order to provide a holistic approach towards analysis of the region. South Asia's centrality to the global war on terrorism is undeniable. Western powers led by the USA have engaged the region aggressively with a large number of initiatives. India and China are driving transformation of trends on the international economic horizon. Other factors, too, continue to contribute to the region's rising importance. The need for information on the region is thus keenly felt. Issues addressed in this edition are relevant for conflict resolution as well as overall growth in the region. Country profiles and military balance have been revised in accordance with the latest available data.