The main argument of this paper is that the ongoing peace process between India and Pakistan provides enough space to carry on development activities in the Indian state of Jammu and Kashmir (J&K). It further argues that development activities can continue in a conflict zone, thus letting the conflict situation gradually subside as, among many other factors, poverty and underdevelopment are a cause of violence. Violence has affected the development scenario in the state of J&K, thereby not only discouraging private investment, but also creating obstacles in effective implementation of the developmental policies initiated by public authorities. However, with the ongoing peace process between India and Pakistan and with concomitant initiatives such as opening of the traditional intra-Kashmir routes, the hope for a durable and sustainable development in the state has gained ground, along with a renewed hope for peace.