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The relevance of theory of democratic peace to the case of Pakistan has been a topic of discourse in western academia, as Pakistan struggles to develop democratically and subsequently regarding its efforts to minimise the chances of war and maximising the possibilities of economic cooperation with its adversary India, therefore contributing towards possible regional economic development in South Asia. Considering the significant aspect at the core of these issues the focus of this article is primarily on the Pakistan’s domestic factors playing a significant role in its foreign policy making. Regarding foreign policy vis-a-vis India, the diplomatic and militarystrategic engagement over the issue of Kashmir remains pertinent. Broadly the analysis of these issues shall be accomplished by focussing on the governments of Pakistan Muslim League – Nawaz group PML (N) from the post-second martial law years (1985 onwards) till the most recent elections in 2013. Considering the history of electoral politics in Pakistan, PML (N) has been inclined towards introducing advanced economic and developmental reforms in Pakistan therefore may be regarded as favouring economically liberal reforms. In order to ascertain the role of democracy as a form of governance in affecting the foreign policy making and conflict resolution, the interactions of these PML (N) governments with their Indian counterparts, on the issue of Kashmir shall be examined. This also contributes to the assumption at the core of democratic peace theory that as Pakistan evolves democratically, the chances of peace and economic cooperation in South Asia may be maximised. Therefore this article engages with the themes of separation of powers and problems of governance, different types of governments and regimes, civil-military relations, and possibilities of peace between historical adversaries through domestic economic progress and regional trade and cooperation. Moreover, in the South Asian perspective, it includes the liberal and internationalist discourses that expect regional economic blocks to develop in South Asia supported and guided by economically, financially and strategically advanced states.